BRIDGETOWN, Barbados, CMC – The Development Bank of Latin America and the Caribbean (CAF) said on Wednesday that the Caribbean’s risk landscape is not static and that disasters are becoming more frequent and more costly.
“These impacts are being compounded by new financial, social, and technological risks, from cyberattacks and misinformation to shifting geopolitical dynamics. For small island and coastal states, the convergence of these risks is not just daunting; it can cripple fragile economies,” said Dr. Stacy Richards-Kennedy, CAF’s Regional Manager for the Caribbean.
Addressing the second Wider Caribbean Regional Risk Conference, she told delegates that resilience today extends far beyond physical defenses and that liquidity is a key component in this discussion. She said whether a storm sets a country back by months, years, or decades often depends on how quickly governments can access flexible and affordable financing.
Richards-Kennedy told the two-day conference, organized by the Caribbean Development Bank (CDB), the Caribbean Catastrophic Risk Insurance Facility (CCRIF), and CAF, that her financial institution is adapting its operations to support the region even further.
“As we all know, resilience cannot be left to chance. It must be built deliberately into the way we finance, manage, and govern the region’s development. That is why we have taken steps that go even further – beyond strengthening project design, to also re-visiting and re-calibrating financial instruments to ensure that they meet the realities of our shareholder countries, so that they can be more tailored, more flexible and more agile”.
She says that when a disaster strikes, speed and precision matter, and that is why, in addition to the bank’s rapid response humanitarian grant funding, CAF created national contingent credit lines for emergencies.
She stated that in 2021, the CAF board approved a regional contingent facility of US$500 million, enabling shareholder countries to access fast-disbursing financing of US$10 to US$50 million for immediate response to restore basic services and even to support preventive action when an extreme event is imminent.
She said that these facilities were set up to directly address the gaps CAF observed in the region’s ability to mobilize resources quickly.
The senior CAF official stated that her financial institution has also incorporated climate contingency clauses into its financing instruments.
“What this means for small island developing states is simple, but its impact is powerful. When a major climate shock strikes a country, debt service can be paused. Governments will be able to channel scarce resources into what matters most, helping to focus on recovery, restoring livelihoods, and rebuilding communities affected by the disaster.
“This is in keeping with the calls by regional leaders to make this a standard practice. For Caribbean nations, where a single storm can erase decades of fiscal progress, we truly believe continuous financial innovation is essential,” she said.
Richards-Kennedy said the bank is also mobilizing resources from global funds such as the Green Climate Fund and working closely with partners to support regional early warning system platforms.
“ In addition, CAF provides significant technical assistance to our shareholder countries through various Funds and also the wider CARICOM region through our dedicated Caribbean Facility. We are also working closely with countries in boosting their technical capacity on issues related to Loss and Damage,” she added.
She said Ecuador is a good example, because it has been implementing a comprehensive readiness project on Loss and Damage..
“This initiative is helping to build the country’s technical and institutional capacity to track the actual costs of climate events, strengthen its data systems, and develop the governance tools and human capital needed to channel climate finance more effectively.
“It is one of the most ambitious efforts of its kind in the region and a model that we hope can serve to inform and guide other countries, particularly Caribbean SIDS, where data gaps and fragmentation can delay recovery, even when the will and resources exist.”
She said that as the CAF looks ahead, one of the clear lessons is that no single country or institution can tackle these risks alone.
“The Caribbean’s vulnerabilities are shared and therefore, so must be our solutions. This is why CAF firmly believes in the power of partnerships. This conference is a clear example.
“We stand ready to continue deepening our collaboration with development partners across the region. We have a very special relationship with the CDB and CCRIF, as well as development partners … all very important actors equally committed to strengthening resilience and leveraging our pooled resources, expertise, and networks to co-create agile and practical solutions at scale, working closely with governments, the private sector, and civil society. “
She said that the logic is simple:
“If we all face similar risks, then our financial ecosystem must reflect this reality. At CAF, we are firmly committed to ensuring that shocks do not immediately translate into debt crises and lost years of development.
“Not only through support for financial recovery, but also through strengthened financial resilience that allows recovery to be faster and more sustainable. You can count on us,” she told the more than 1,400 delegates attending the event both in person and virtually.
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