07 March 2025

The Caribbean Community (CARICOM) is making strides in regional integration, as leaders push forward with plans for free movement, treaty amendments, and deeper international cooperation.

The 48th Regular Meeting of the Conference of Heads of Government, held in Barbados from 19 to 21 February 2025, reaffirmed the bloc’s commitment to unity and sustainable development amid global uncertainties.

One of the most notable outcomes of the meeting was the decision to finalise plans for the free movement of CARICOM nationals by 1 June 2025 for willing countries. The initiative includes access to primary and secondary education, emergency healthcare, and primary healthcare for migrating individuals.

“With respect to the free movement of people, the Conference agreed that Member States that have not yet done so, should sign and ratify the Protocol on Enhanced Cooperation by 31 March to enable Member States that are willing to move ahead with free movement to do so by 1 June 2025,” said the final communique.

Barbados Prime Minister and current CARICOM Chairman, Mia Mottley highlighted the urgency of the move, stating that most CARICOM nations, face aging and declining populations. “Because of this, it is necessary to speed up freedom of movement rather than continue with a gradual approach,” she said, adding that 2025 will be the year when this long-sought goal of regional integration finally becomes a reality.

Leaders also agreed to amend the Revised Treaty of Chaguaramas to enable some CARICOM countries to proceed with integration efforts without waiting for unanimous approval from all member states.

“Not to destroy the treaty, not to expose ourselves to capricious action, but to say that on matters where some countries are ready to go forward and others are not ready, that that small subgroup that is ready to go forward must be allowed to go forward within the ambit of the revised treaty,” said Trinidad and Tobago Prime Minister, Keith Rowley.

The treaty amendment aims to remove barriers slowing the implementation of the CARICOM Single Market and Economy (CSME), including the harmonisation of customs and trade regulations. Leaders committed to addressing 57 non-tariff barriers identified by the Caribbean Private Sector Organisation that hinder the movement of goods, and mutual recognition of driver’s licenses and vehicle insurance.

CARICOM leaders also tackled critical issues such as crime and security, trade reform, and telecommunications costs. The body is reviewing the impact of major US-based tech firms like Netflix and WhatsApp on the region’s digital economy. “Many of us use WhatsApp, Netflix—yet they pay no taxes and make no contribution in any way to the regional economy,” Mottley remarked, adding that fairer pricing and investment in the region’s telecommunications infrastructure must be explored.

Additionally, efforts to boost regional food security were reinforced with an investment of US$14mn into a regional food hub in Guyana. The 25 by 2025 initiative, which aims to reduce food imports by 25% by 2025, was extended to 2030 to allow for further stakeholder participation and investment.

CARICOM reaffirmed its support for regional candidates in upcoming international elections. Leaders unanimously backed Muhammad Ibrahim of Guyana for the position of Director General of the Inter-American Institute for Cooperation on Agriculture (IICA). Additionally, the bloc threw its full support behind Albert Ramdin of Suriname in his candidacy for Secretary-General of the Organisation of American States (OAS), emphasising the importance of Caribbean leadership on the global stage.

The meeting saw engagements with international leaders, including United Nations Secretary-General António Guterres, who acknowledged CARICOM’s leadership on global issues. “The irrepressible strength of a unified Caribbean and commitment to multilateralism—which have done so much to advance global progress—are vital to achieving that aim,” said Guterres.

European Commission President Ursula von der Leyen underscored the EU’s commitment to working with the Caribbean, particularly on climate action. “Europe understands how the fight against climate change is paramount to the Caribbean states because it is intrinsically linked to your very existence,” she said.

The regional bloc also took a firm stance against Venezuela’s plans to hold elections in Guyana’s Essequibo region, a territory long claimed by Caracas. CARICOM leaders underscored that such actions violate international law, the United Nations Charter, and reaffirmed their unwavering support for Guyana’s sovereignty and the ongoing judicial resolution of the border dispute at the International Court of Justice.

Several financing agreements were signed, including a US$200mn agreement between The Bahamas and the African Export-Import Bank (Afreximbank) for climate-resilient and trade-enhancing infrastructure, and a US$75mn agreement between Barbados and the Development Bank of Latin America and the Caribbean (CAF) to support heritage tourism and infrastructure modernisation.

The conference concluded with a commitment to continued cooperation, with Jamaica set to host the next Heads of Government Meeting in July 2025. As CARICOM advances in its integration agenda, the region stands poised for enhanced economic growth, social development, and stronger global partnerships, notwithstanding significant geopolitical downside risks.

21 February 2025

Jamaica and Barbados have taken different fiscal paths for the upcoming financial year, with the former announcing significant spending cuts while the latter plans to embark on its most ambitious expenditure programme yet.

In Jamaica, the government has announced plans to reduce its budget by JM$126bn (US$810mn), bringing total spending for the 2025/26 fiscal year to JM$1.26tn (US$8.1bn).

Newly appointed Finance Minister Fayval Williams presented the budget estimates in Parliament, confirming that Jamaica’s economy has officially entered a recession.

The economy contracted by 3.5% in the July-September quarter and an estimated 0.5% in the October-December quarter, with full-year contraction now projected at 0.7%. This represents a significant reversal from the previous year’s growth projection of 2%, though recovery is expected in 2025.

Williams later refuted media reports about the nature of the spending cuts.

“There are indeed spending cuts that are specifically related to Jamaica’s debt servicing (amortisation and interest payments). As a point of information, these declined significantly for FY 2025/26 versus FY 2024/25 by JM$159.4bn [US$1.01bn],” she asserted.

“This is a good thing for Jamaica’s economic health especially because in the past, our national budget would reflect major payments towards interest payments. This is no longer the case,” continued Williams. The country’s debt-to-GDP ratio is expected to decline to 63.7% by the end of the next fiscal year, a significant improvement from over 150% a decade ago.

Despite the reductions, the government has prioritised funding for infrastructure and elections. Public sector compensation remains the largest expenditure, with JM$496bn (US$3.22bn) allocated for salaries and back pay. The Ministry of Economic Growth and Job Creation will receive JM$14bn (US$90.9mn) for the Montego Bay Perimeter Road and JM$8bn (US$51.9mn) for the Shared Prosperity through Accelerated Improvement to our Road Network (SPARK) Programme.

Health and education also see notable allocations, including JM$10.2bn (US$66mn) for the Ministry of Health and Wellness and JM$4.2bn (US$27.3mn) in additional funds for the Ministry of Education, Skills, Youth, and Information.

Meanwhile, in Barbados, the Mia Mottley Administration is set to embark on its most expansive spending plan in history, with projected expenditures exceeding US$2.5bn. Despite revenue projections of US$1.95bn, the country faces a revenue shortfall of approximately US$500mn, raising concerns about future borrowing.

Opposition Leader Ralph Thorne has sharply criticised the government’s fiscal approach, calling it “a cycle of reckless borrowing and high taxes.” He further argued that “the result of this debt repayment obligation will be fewer tax dollars available for vital public services such as healthcare, road repair, water distribution, and general social development.”

Barbados’ debt payments, including principal and interest, will rise to US$880mn from the previous year’s US$795mn. “There is a conspicuous lack of creativity in government’s policy, and it is clear that the economy has not been performing in the robust manner as government’s spokespersons have been suggesting,” asserted Thorne, noting that the government had successfully written off billions in debt in 2018 and 2019.

The budget includes allocations of US$60mn for the Queen Elizabeth Hospital and US$59mn for the University of the West Indies, with additional funds directed towards the Social Empowerment Agency, road rehabilitation, and the construction of female dormitories at the Regional Police Training Centre.

However, University of the West Indies economist, Antonio Alleyne questioned the government’s revenue projections, noting that Barbados has historically failed to meet its revenue targets. “The government has never collected 100% of its budgeted revenue, and I don’t foresee it doing that either,” he cautioned.

The contrasting budgetary approaches reflect differing economic priorities. Jamaica’s government appears focused on fiscal restraint, aiming to reduce debt while sustaining critical investments in infrastructure, education, and healthcare.

“By reducing our debt burden, we are strengthening Jamaica’s economic stability, improving our ability to respond to global financial changes and external shocks,” said Finance Minister Williams in a passionate defence of the government’s strategy.

On the other hand, Barbados is increasing its spending despite concerns about its ability to generate sufficient revenue. While the government projects growth, economic experts remain cautious about whether this spending trajectory is sustainable in the long term.

The budget estimates of both countries are to be followed by budget debates in the coming weeks where governments will further elaborate on spending for 2025/2026. With both countries facing economic challenges and growing global geopolitical uncertainty, their budgetary decisions will play a crucial role in shaping their respective fiscal futures.

07 February 2025

The Dominican Republic has solidified its standing as a premier global tourism destination by securing an impressive US$6.75bn in investments at the FITUR 2025 international tourism fair in Madrid, Spain.

This marks a significant increase from last year’s US$3.5bn and underscores the country’s growing appeal among investors and international stakeholders.

Tourism Minister David Collado hailed the country’s participation as a resounding success. Speaking at his traditional breakfast with the press following the event, he detailed the substantial agreements secured at the fair.

“These US$6.75bn will represent 7,400 new rooms, 713,000 tourists, 47,800 jobs, and US$477mn in foreign currency,” Collado stated, highlighting the economic impact of the investments.

A significant portion of the funding came from the Dominican financial sector. Banco Popular Dominicano led the way, securing agreements worth US$2.5bn. Banreservas and Banco BHD each closed deals valued at US$2bn, while Promerica, in its first FITUR participation, contributed an additional US$250mn.

These investments are expected to fuel the expansion of the country’s tourism infrastructure, including the construction and renovation of hotels and resorts. One of the standout projects announced at the event was Banco Popular’s US$71mn investment in Uvero Alto. The project, managed by Advanced Asset Management (AAM), will see the purchase and redevelopment of the Playa Hotels & Resorts under the Wyndham Alltra brand, featuring 620 rooms and a new 7,500 m² water park.

Banco Popular Senior Executive Vice President, René Grullón Finet reaffirmed its commitment to strengthening the Dominican Republic’s tourism sector by supporting projects that enhance its competitiveness, arguing the significance of such initiatives.

In addition to financial agreements, the Dominican Republic made significant strides in improving air connectivity, a priority for the tourism cabinet in 2025. Collado announced that agreements with major airlines, including Iberia, Air Europa, Aeroméxico, and Air Transat, will bring an additional 500,000 seats to the European market this year alone.

“The main objective of the tourism cabinet this year will be air connectivity,” stressed Collado. This increased connectivity is expected to facilitate a surge in international tourist arrivals and further solidify the Dominican Republic’s position as a top travel destination.

Adding to the achievements at the fair, the Dominican Republic was awarded the Best Stand at FITUR 2025. This marks the second consecutive year the country has received this prestigious recognition for its visually striking and interactive stand showcasing the nation’s diverse tourism offerings.

Another notable development from FITUR 2025 was the announcement of a multi-destination partnership between the Dominican Republic and Puerto Rico. Minister Collado and Puerto Rican Governor Jennifer González revealed that a formal agreement would be signed in February to promote joint travel packages and strengthen air connections between the two nations.

“The Governor of Puerto Rico wanted to visit the stand of the Dominican Republic, a detail that our country will not forget,” Collado remarked. “She being the governor of Puerto Rico, decided to come to visit us to talk, and soon we will have announcements in the month of February of alliances between Puerto Rico and the country.”

“We are going to formalise an agreement so that for the first time, options from multiple destinations [are available]. I am very grateful to President Luis Abinader, Dominicans nourish the culture of Puerto Rico,” said Governor González as she expressed her enthusiasm for the partnership.

This alliance aims to attract more European travelers by offering seamless travel experiences between the two territories. While logistical challenges, such as high airfares due to taxes and tariffs, remain an issue, both leaders are optimistic about the potential of the collaboration.

The Dominican Republic continues to reinforce its position as the Caribbean’s tourism leader. The country, which welcomed a record-breaking 11mn visitors in 2024, expects 2025 to surpass this milestone, driven by increased investments and strategic initiatives.

With robust financial backing, improved air connectivity, and innovative partnerships, the Dominican Republic is poised for another landmark year in tourism development. The investments and agreements secured at FITUR 2025 reflect the country’s commitment to sustainable growth and its ambition to remain a global tourism powerhouse.

24 January 2025

The Government of Guyana has unveiled an ambitious US$6.6bn (GY$1.382tn) National Budget for 2025, marking a historic 21% increase from the previous year.

Tabled by Finance Minister Ashni Singh, the budget aims to propel economic growth, address social needs, and stimulate private sector investment under the theme, “A secure, prosperous and sustainable Guyana.”

Despite a moderated economic growth forecast of 10.6% for 2025, Guyana remains one of the fastest-growing economies globally. Singh emphasised that the non-oil sector is set to grow by an impressive 13.8%, showcasing the success of economic diversification efforts.

“Agriculture is forecast to grow by 11.4%, with sugar production expected to surge by 115.4% and rice by 12.4%. Meanwhile, the mining sector will see a 17.2% increase in gold output and over 70% growth in bauxite production,” Singh announced.

The budget prioritises several key sectors, with record-breaking allocations aimed at improving infrastructure and social services.

A US$686mn (GY$143.2bn) will fund a dramatic expansion of healthcare, including the completion of a Paediatric and Maternity Hospital and six regional facilities, as well as US$14mn (GY$2.9bn) for a neurological rehabilitation centre and a cancer treatment centre of excellence. “This budget places Guyana well on its way to realising a modern, world-class healthcare system,”  said Singh.

Over US$540mn (GY$112.6bn) has been allocated to continue the government’s aggressive housing programme, with the goal of surpassing its manifesto promise of 50,000 house lots by adding an additional 25,000.

Agriculture receives US$500mn (GY$104.6bn) which will support robust growth in sugar, rice, livestock, and fisheries, furthering diversification in the economy. Meanwhile US$34.48mn (GY$7.2bn) will support initiatives to enhance the wellbeing and development of indigenous communities, including infrastructure, education, and healthcare investments.

The 2025 budget also introduces several measures to ease the cost of living and boost disposable incomes. The threshold for income tax has been raised to US$623 (GY$130,000) from US$479 (GY$100,000), with the first US$240 (GY$50,000) from second jobs or overtime now tax-free. “The concept of working longer, and in particular, working longer hours is one that we have to embrace, given the recognition that the size of the supply of labour is not growing in Guyana at the pace at which the demand for labour is growing” said Singh.

Additionally, direct support initiatives include US$240 (GY$50,000) school grants, US$24 (GY$5,000) health vouchers, and US$479 (GY$100,000) for every newborn are aimed at providing direct financial support to families. While Old Age Pensions have been increased to US$197 (GY$41,000), and public assistance has risen to US$105 (GY$22,000).

With continued electricity woes in 2024, the budget allocates US$423mn (GY$88bn) to energy projects, including the Gas to Energy (GtE) Project, which will deliver 300 MW to the national grid and reduce electricity costs by 50%. Investments in roads and bridges also remain central to the government’s strategy to support economic growth.

“This budget isn’t just about growth; it’s about ensuring that growth benefits every Guyanese,” remarked Komal Singh, Chairman of the Private Sector Commission (PSC).

For 2025, oil revenues are expected to fund 37% of the budget, with US$2.5bn withdrawn from the Natural Resources Fund. Production from the Stabroek Block, which will reach 900,000 barrels per day by year-end, is a key contributor to the country’s development plans.

“The size of this budget signals a growing and robust economy, key to attracting both local and international investments,” Komal Singh noted, adding that over US$2.5bn in private sector investment outside the oil sector has been recorded in the past four years.

While the budget has been praised for its transformative potential, opposition leaders have raised concerns. Former Finance Minister Winston Jordan labelled it a “hodgepodge,” arguing it lacks targeted measures to reduce poverty, which is estimated at 48%.

“The child allowance does nothing for those already covered by the income tax threshold,” Jordan remarked, while Opposition Leader Aubrey Norton critiqued the absence of substantial benefits for low-income earners.

Guyana’s 2025 budget represents its boldest step yet as an oil-driven economy, with record allocations for health, housing, agriculture, and indigenous communities. However, balancing growth with social equity remains a pressing challenge.

“This milestone budget empowers citizens with more disposable income and creates an enabling environment for private sector growth,” Komal Singh asserted. Whether it delivers on its promises will be pivotal for Guyana’s economic trajectory in 2025 and beyond.

10 January 2025

The Dominican Republic is poised to embark on an ambitious development agenda in 2025, with the government authorised to secure over US$6.5bn in international financing.

This decision, embedded in Article 71 of the 2025 National Budget, signals a significant commitment to addressing critical needs in transportation, water, sanitation, energy, and education through the implementation of 37 major infrastructure projects.

The budget, approved as law by the Senate, includes a bold financing strategy that paves the way for the executive branch, through the Ministry of Finance, to accelerate the rate of borrowing from international organisations in 2025.

The financing strategy relies on partnerships with international financial institutions, including the Inter-American Development Bank (IDB), the Japan International Cooperation Agency (JICA), the Spanish Agency for International Development Cooperation (AECID), the Andean Development Corporation (CAF), and the Central American Bank for Economic Integration (CABEI).

Among these, a US$500mn loan is earmarked for the construction of a monorail in Santiago de los Caballeros, while US$371.5mn will fund the expansion of Santo Domingo’s Metro Line 2.

Other significant projects requiring financing include the construction of additional sections of the border fence with Haiti which is estimated to cost US$239.9mn, and the country’s nationwide bridge rehabilitation and maintenance programme estimated at US$200mn, to be executed with support from the IDB.

The heavily touted National Plan for Connectivity and Transformation of Road Infrastructure (Planacovial) is also expected to move forward once the government can secure the required  US$600mn investment which is being negotiated with CABEI.

All loans and financing must be negotiated at market-compatible interest rates and fees applicable to the Dominican Republic, with a minimum repayment term of seven years.

This aggressive borrowing strategy comes amid significant growth in the Dominican Republic’s public debt. As of November 2024, the Non-Financial Public Sector (NFPS) debt reached US$57.48bn, up from US$30.7bn in 2020. External debt accounts for 70.4% of this total, equivalent to US$40.43bn.

The rising indebtedness reflects increased reliance on international markets. Private creditors, mainly through bond issuance, have grown their share of external debt from US$22.16bn (72.2%) in 2020 to US$31.04bn (76.8%) in 2024. Meanwhile, multilateral organisations like the IDB and World Bank remain significant players, albeit with a shift in their relative contributions. The IDB’s share declined from 13.4% of total external debt in 2020 to 9.8% in 2024, while the World Bank’s increased from 3.8% to 4.8% during the same period.

Despite the ballooning debt, the debt-to-GDP ratio dropped from 56.6% in 2020 to 46.1% in 2024, driven by robust economic growth. However, experts warn of vulnerabilities associated with the heavy reliance on international private financing.

“The increase in external debt, especially through bond issuance, suggests a greater dependence on international private financing,” observed El Caribe financial writer, Martín Polanco, adding that “although this allows for diversifying the sources of resources, it also increases the country’s exposure to the risks associated with global interest rates and market volatility.”

The 2025 budget reflects President Luis Abinader’s focus on infrastructure, but critics argue it continues a longstanding trend of prioritising current spending. The administration has followed the precedent set by previous governments, dedicating the majority of revenues to current expenditures, including significant increases in public sector employment, employee benefits, and interest payments on existing debt.

This fiscal strategy has sparked debate about the balance between investment and sustainability. While supporters highlight the transformative potential of these projects, detractors raise concerns about the long-term implications of increased debt servicing costs.

The Dominican Republic’s ambitious borrowing and development plans aim to propel the nation’s infrastructure into a new era of modernisation. As the government navigates the complexities of securing and managing these funds, it faces the dual challenge of fostering growth while safeguarding fiscal stability. With US$6.5bn on the line, the year ahead will test the administration’s ability to execute its vision effectively.

13 Decemeber 2024

The Bahamas is grappling with a storm of allegations and political upheaval following a US indictment that accuses high-ranking Bahamian police and government officials of enabling massive cocaine shipments to the US.

The indictment, unsealed by US Attorney Damian Williams and DEA Administrator Anne Milgram, charges 13 individuals, including high-ranking officials of the Royal Bahamas Police Force (RBPF) and the Royal Bahamas Defence Force (RBDF), with cocaine importation and related weapons offenses.

“For years, drug traffickers have smuggled tonnes of cocaine through The Bahamas with the support and protection of corrupt Bahamian government officials who control airports throughout the country and provide sensitive information about US Coast Guard movements to drug traffickers,” said Williams.

The indictment paints a damning picture of systemic corruption, accusing Bahamian officials of accepting bribes of up to US$2mn in exchange for facilitating the safe passage of cocaine shipments.

The fallout in The Bahamas has been swift and dramatic. Commissioner of Police Clayton Fernander resigned, with Prime Minister Philip Davis confirming his departure and recommending ACP Shanta Knowles as his successor. If appointed, Knowles would become the first female Commissioner of Police in Bahamian history.

“We are taking important steps to restore trust and accountability,” said Prime Minister Davis, noting that there would be more changes to the leadership of the country’s security forces.

During a heated parliamentary session, St. Barnabas MP Shanendon Cartwright added to the turmoil by grabbing the ceremonial mace—a symbol of parliamentary authority—and throwing it out of a window in protest. This was followed by the forceful ejection of opposition lawmakers from parliament.

The chaos within Parliament spilled into the streets, where opposition supporters gathered to protest the corruption allegations. Opposition Leader Michael Pintard criticised the government for attempting to “silence the Bahamian people” and called for a broader commission of inquiry to investigate systemic corruption.

“We know that the transshipment of drugs and arms through The Bahamas cannot be facilitated by law enforcement alone,” said Pintard. “It has to be facilitated by a wider group of persons who have authority in different sectors of our society.”

In the first sitting of parliament since the mace incident, House Speaker Patricia Deveaux announced the suspension of the entire official opposition except former Prime Minister Hubert Minnis following a motion moved by the government.

“It is so moved that for the next two sittings, the honourable members mentioned will not be allowed to sit in this honourable assembly,” said Deveaux. Following this, the six members, led by Opposition Leader Pintard left parliament and staged a concurrent press conference.

Adding to the intrigue is the indictment’s reference to an unnamed high-ranking Bahamian politician who allegedly agreed to authorise law enforcement support for drug traffickers in exchange for US$2mn. Prime Minister Davis has expressed frustration with US officials for withholding the identity of this individual.

“I told them to disclose to me the named politician,” Davis said. “They haven’t done it yet… They’re painting The Bahamas as a bunch of corrupt government officials. I asked them to identify who they are. Are they public servants? We do have bad apples amongst ourselves, and we got to root them out where we find them,” he added.

In an interview, Former Prime Minister Hubert Minnis suggested that if Prime Minister Davis was not informed by the US about the indictment, it may be an indication that they do not trust the current government.

He recalled that when he was in office he was informed by the US about investigations involving a high-ranking public figure in The Bahamas and had no objections to the actions of US investigators.

The Davis administration has sent a formal diplomatic note to the US, requesting further details about the allegations. Minister of Foreign Affairs Fred Mitchell has also called for clarity, while the Bahamian public grows increasingly restless.

Meanwhile, the government is pushing forward with an Independent Commission of Investigations Bill to address misconduct by law enforcement and public officials. Minister of National Security Wayne Munroe described the bill as a step toward restoring trust, but Pintard dismissed it as inadequate.

“This is no substitute for a broader commission of inquiry,” Pintard said. “We need to examine the relationships between local and international criminal organisations, security forces, and members of Parliament,” he maintained.

As The Bahamas navigates this crisis, the implications for its international reputation and governance remain uncertain. The scandal has laid bare deep-rooted issues within its institutions, raising urgent questions about accountability and reform. For now, the country’s political and law enforcement leadership faces an uphill battle to restore trust both at home and abroad.

29 November 2024

Barbados has secured a groundbreaking US$300mn debt-for-climate swap to finance critical infrastructure upgrades while reducing the country’s public debt stock.

Prime Minister Mia Mottley hailed the initiative as a global first, describing it as a transformative model for tackling climate resilience while avoiding an increase in national debt.

“This is the first debt-for-climate swap that will get back a capital sum upfront to build a project upfront. What is here is the ability to repurpose debt in a way that not only meets our obligations but provides immediate financing for critical infrastructure,” declared Mottley during a session in the House of Assembly.

The arrangement restructures existing debt at a lower fixed interest rate of 3.25%, compared to previous rates as high as 8%, enabling Barbados to redirect savings into infrastructure projects.

State Minister of Finance Ryan Straughn elaborated on the financial terms, highlighting that the loan was secured from three Canadian-owned banks—CIBC, Royal Bank, and Scotiabank— which will lend US$180mn, US$70mn, and US$50mn, respectively.

The syndicated 20-year loan is the country’s largest local financing effort and includes a five-year grace period and fixed quarterly payments of approximately US$5mn beginning in 2030. The savings from refinancing existing high-interest loans are expected to amount to US$150mn over the loan term by paying off higher-interest loans from the Inter-American Development Bank (IDB) and the Green Climate Fund (GCF).

The  government has defended the move, arguing that it is not increasing debt, but rather restructuring in a way that gives the country financial breathing room while achieving tangible infrastructure upgrades and alllowing them to tackle critical challenges like water leakage and disaster risk mitigation.

Part of the funds from the loan will be used to build a US$60mn sewage treatment plant and a seven-megawatt solar energy system with battery storage, as well as Barbados Water Authority enhancements such as pipeline installations, and water infrastructure upgrades to build resilience.

“Not a dollar, not a cent. It is coming out purely of taking our existing debt and instead of paying eight per cent… we pay only 3.25% and get a treatment plant… a pipeline… [and] a seven-megawatt solar system with battery storage,” stressed Prime Minister Mottley.

However, while the government touted the initiative as a model for innovative climate financing, Opposition Leader Ralph Thorne critiqued the deal, calling it “just another loan”. He questioned its originality and suggested it might increase national indebtedness, contradicting the administration’s stated goals.

“Is the government replacing local debt with foreign debt?” Thorne queried, accusing the government of misleading the public into believing it was unprecedented.

Thorne also raised alarms about unresolved environmental issues, particularly allegations of untreated sewage being pumped into the sea, which the government aims to address through the project. Mottley dismissed the critiques as baseless, arguing the swap provides essential resources for modernising Barbados’ water and waste systems.

“This is a capital project intended to protect the water resources of Barbados, augment the water available to farmers, bring down the cost of food, and allow those ploughing the food to earn a living to support their families,” she said.

Mottley underlined the international recognition the swap has garnered, with praise from institutions like the International Monetary Fund (IMF) and the Inter-American Development Bank (IDB). She positioned Barbados as a trailblazer in climate finance, showcasing the country’s commitment to addressing climate change through innovative solutions.

In the Upper House, Independent Senator Crystal Drakes and Opposition Senator Ryan Walters voiced concerns about transparency and the broader impact of the deal on Barbadians. Drakes stressed the need for clarity on how the upgrades would expand sewage services and improve water supplies.

“This resolution is critical to the survival of Barbadians…but as good as the policy innovation may be, there are more details that need to be shared,” said Drakes.

Walters echoed these concerns, highlighting the financial uncertainties tied to the transaction. “There are great unknowns about what the financial impact of this restructuring will be,” he said, pointing to the long-term implications for pensioners and future generations.

Meanwhile, University of the West Indies Economist, Professor Justin Robinson commended the debt-for-climate swap as a pioneering initiative in regional financing. He noted that the deal’s sustainability-linked terms reflect Barbados’ commitment to environmental goals and global governance standards. However, he warned of potential risks, including additional loan costs if performance targets are unmet.

“Our people deserve infrastructure that works, water that is secure, and an environment that is protected. This swap delivers on all fronts without burdening the taxpayer,” said Prime Minister Mottley as she concluded her contribution in Parliament, urging Barbadians to see the deal as a long-term investment in the country’s future.

15 November 2024

Regional conglomerate ANSA McAL has completed its largest acquisition in its 143-year history, purchasing US-based chlor-alkali producer Bleachtech LLC for US$327mn.

The acquisition, finalised through ANSA’s subsidiary ANSA Chemicals US LLC, marks a significant step in the group’s ambition to expand its market presence and achieve its “2X” growth strategy of doubling profits by 2027.

Bleachtech operates two plants in Seville, Ohio, and Petersburg, Virginia, producing sodium hypochlorite (bleach), sodium hydroxide (caustic soda), and hydrochloric acid. These chemicals are essential in water treatment and sanitation.

“This acquisition is hugely transformational for ANSA McAL,” said Group CEO Anthony N. Sabga III. “We have well publicised our goal to double the size, scale and impact of the group by 2027. This acquisition will add a substantially incremental component to our business. This allows us to now, for all intent and purposes, to be the main supplier of chlor-alkali treatment for two major states in the US,” he added.

The purchase was funded through a mix of debt and equity, with approximately 60% of the cost financed via loans and 40% by cash. The debt, totaling US$200mn, comprised a five-year syndicated term loan of US$190mn arranged by Citibank NA, and a sellers’ promissory note of US$10mn and were completed on 1 November 2024.

The loan carries a floating interest rate based on the three-month Secured Overnight Financing Rate (SOFR), currently at 4.57%, plus a 3.75% margin, for a total initial rate of 8.32%. A T&T Stock Exchange disclosure noted that It is secured by the newly acquired US assets of BleachTech and guranteed by the group and two of its subsidiaries, ANSA McAL Chemicals and ANSA McAL Chemicals Holdings.

The cash portion of the acquisition, amounting to approximately US$127mn, was funded through a mix of ANSA McAL’s treasury reserves and the liquidation of significant US-dollar investments, said Sabga in a Business Guardian interview.

“The acquisition price was based on a multiple of EBITDA (earnings before interest, taxes, depreciation, and amortisation) that we believe reflected fair value for the business,” said Sabga of Bleachtech, which generated US$85.7mn and US$57.4mn in revenues and EBITDA in 2023, respectively.

The transaction faced delays due to the need for regulatory approvals from the US Federal Trade Commission and the Committee on Foreign Investment in the USA. This heightened scrutiny arose from the classification of chlor-alkali production as critical infrastructure in the US, given its essential role in producing potable water.

The company, which was acquired debt-free with some working capital on its books, has two plants currently operating at 50% capacity, producing between 32mn and 37mn gallons annually. The plants have the potential to double production, creating opportunities for further profitability. “We feel that we can definitely seek to acquire more markets and also additional uses for that volume,”said Sabga.

“My priority over the next few months will be to meet with relevant stakeholders to share our growth plans and commitment to working with Bleachtech’s talented team. The purification and disinfection end use of Bleachtech’s products is very much in line with our group’s environmental commitments,” said the Group CEO, adding that “it is also aligned to Trinidad and Tobago’s national objective to diversify the economy both from an industry and geographic perspective”.

Bleachtech’s former owner, Richard Immerman, expressed optimism about the future under ANSA McAL’s leadership. “We are excited that Bleachtech is joining the ANSA McAL group. I have been impressed with the care, professionalism, and rigour ANSA McAL brought to this process. Their intention to invest and grow this business is good news for all of us who helped build, and work for, Bleachtech, as well as for our suppliers and customers,” Immerman said.

“Our focus now remains the continued safe operations of the plants while we explore ways to build out demand to utilise spare plant capacity,” said Andy Mahadeo, ANSA McAL’s Chemicals Sector Head.

While not explicitly mentioned, there is speculation that safety is a priority for ANSA given that a major chemical leak occurred at BleachTech’s Seville plant in January 2024, injuring two workers. The company was later cited and fined by the Occupational Safety and Health Administration.

Notwithstanding this seemingly isolated incident, the acquisition represents a milestone in ANSA McAL’s history, reinforcing its position as a global player in the chemicals industry. With a strong EBITDA margin of 67% in 2023, Bleachtech is poised to deliver significant returns, even as the group works to expand production and market reach.