Clarke begins process to access disaster response funds

Finance Minister Dr Nigel Clarke says the Government will have to draw on the resources available in at least two financial instruments it put in place for emergency response and recovery costs of natural disasters.

These are the Contingency Fund and the Natural Disaster Fund, totalling $4.5 billion. 

He says the Government might also have to access the next layer of protection which consists of the Contingent Credit Claim with the Inter-American Development Bank (IDB). Clarke says he has initiated the process for this access.

"While the maximum amount under this layer, for the most severe natural disaster events, is approximately $46 billion, it will take a few days to ascertain exactly how much of this Beryl will trigger as well as how much we will need," he explains.

Clarke says the Government will also know by the end of today whether a payout is possible from the from the tropical cyclone policy with the Caribbean Catastrophe Reinsurance Facility. However, he says the Government will have to wait until next week to receive feedback regarding the excess rainfall policy with the facility.

He says the path and intensity of Hurricane Beryl did not trigger Jamaica's Catastrophe Bond, which essentially serves the purpose of providing financial protection against a Category 5 or very intense Category 4 hurricane making landfall in Jamaica.

"Had Hurricane Beryl made landfall in Jamaica or had Hurricane Beryl retained its intensity as observed on Tuesday (as measured by centralised air pressure) it would have certainly triggered the Catastrophe Bond," he adds.

In the meantime, Clarke states that the Government is unlikely to draw down on the $140 billion precautionary and liquidity line (PLL) with the International Monetary Fund, as he does not anticipate that Hurricane Beryl has led to, or will lead to, liquidity issues for the Government.

The PLL is intended for countries with strong fundamentals and can be drawn in the event of liquidity problems that emerge.

He says over the next few days the Government will aggregate the estimates of damage and interventions required and finalise the total resources from disaster risk financing sources. 

"Finally it is important for us to bear in mind that Hurricane Beryl is only the first hurricane in the 2024 hurricane season. We will therefore need to continue to be prudent with resources, including the disaster risk financing resources, to ensure that we are also prepared for storms or hurricanes that may come later in this year's hurricane season," he says.

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