July 5, 2024
The Jamaica Observer highlighted, Finance Minister Dr. Nigel Clarke announced that Jamaica will utilize the Contingency Fund and Natural Disaster Fund, totaling $4.5 billion, to finance recovery efforts following Hurricane Beryl. Despite the hurricane not making landfall, significant damage occurred.
Clarke highlighted Jamaica’s proactive multi-layered financial strategy, which includes these funds, contingent credit claims with the IDB with the maximum amount being approximately $46 billion, and insurance policies with the Caribbean Catastrophe Reinsurance Facility (CCRIF) which Jamaica paid a premium of $1.5 billion into the CCRIF which provides insurance coverage for natural disasters to regional countries.
It was also noted that, “these sources are being turned to after a report from Swiss-based catastrophe bond fund management specialist Plenum Investments on Thursday said the passage of Hurricane Beryl Wednesday makes it unlikely that a payout will be triggered from the World Bank-facilitated US$150 million ($23.4 billion) catastrophe (CAT) bond for Jamaica.”
“Regarding the top layer in our disaster risk framework, the path and intensity of Hurricane Beryl did not trigger Jamaica’s Catastrophe Bond,” Clarke acknowledged. The CAT bond serves to provide financial protection against a Category 5 hurricane making landfall in Jamaica.
If necessary, additional funds might be accessed through a $140 billion precautionary and liquidity (PLL) line with the IMF. Clarke emphasized that these measures prevent economic instability and ensure swift emergency response and recovery without financial scrambling.
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