Caribbean Small Island Developing States (SIDS) are highly vulnerable to extreme weather events, a reality highlighted by Hurricane Melissa in November 2025. The hurricane caused extensive damage, including torn-off roofs, flooded ground floors, and snapped power lines. In Jamaica alone, damages were estimated at US$8.8 billion, representing roughly 41% of the country’s 2024 GDP, with much of the reconstruction cost falling on businesses and households.
To address these challenges, IDB Invest, with financing from the Green Climate Fund (GCF), has launched a facility to support post-hurricane recovery while helping private-sector entities build resilience against future climate shocks. This initiative aims to strengthen infrastructure, protect operations, and ensure business continuity, enabling companies to withstand and recover from severe storms.
For example, a mid-sized manufacturing facility in Jamaica could renovate with hurricane-proof roofs, elevated electrical systems, and backup power. Such measures would allow operations to continue even if the main grid fails, ensuring that orders are fulfilled and employees remain on payroll. This scenario illustrates the type of resilient future IDB Invest seeks to create across the Caribbean.
The initiative will deploy US$118.9 million to promote private-sector resilience and environmental sustainability. In addition to loans, equity, and guarantees, IDB Invest will provide technical assistance to enhance investment readiness, develop innovative financial mechanisms, and train sectors such as tourism, agroprocessing, and finance to integrate resilience measures. This sectoral approach addresses broader market challenges, supporting sustainable development in the region.
Caribbean economies face interconnected structural vulnerabilities that amplify climate risks. Public finances are under pressure, with average debt-to-GDP ratios above 70%, making recovery from repeated shocks more difficult. Climate-related risks are intensifying, with stronger storms, flooding, and coastal erosion threatening key economic sectors. At the same time, the local private sector struggles to finance resilience projects due to fragmented markets, conservative banking practices, and limited experience with long-term investments. Addressing these challenges is crucial for ensuring a resilient and sustainable Caribbean economy.
