The government has signed a US$75 million ($150m) loan agreement with the Development Bank of Latin America and the Caribbean (CAF) to fund major cultural and infrastructure projects, including a National Performing Arts Centre, an amphitheatre at the National Botanical Gardens, and upgrades to air navigation equipment at Grantley Adams International Airport.
Prime Minister Mia Mottley and CAF Executive President Sergio Díaz-Granados Guida formalised the agreement during a signing ceremony on Friday.
Noting that this investment marks a shift towards strengthening Barbados’ cultural and heritage infrastructure, Mottley said: “The country has not had investment in heritage facilities for some time.
“You would remember when I opened the Marcus Garvey Amphitheatre in November, I indicated that the government was going to be involved in building out new capacity with respect to the heritage and cultural industries, and we hope to be able to do so out of this loan.”
Dismissing the rising concerns and criticisms surrounding the government’s borrowing decision, the prime minister defended the move, stressing that the nation’s debt-to-GDP ratio has steadily declined—from 177 per cent when her administration took office in 2018 to 103 per cent as of December 2023.
“The beauty of the relationship with CAF is that we borrow in relation to the shares we have in the institution. They do not come with the conditions that a lot of other lenders do,” she said.
“Rather than building out of our pocket, the persons who get to use these facilities over the next 20 years get to help pay back the loan.”
She compared the loan structure to a mortgage, arguing that borrowing is essential for national development.
“Even as you pay down debt, you need to borrow to build new capacities in the economy. If not, the economy simply will not grow.”
Mottley further defended government borrowing, pointing to improved credit ratings and the IMF’s ongoing monitoring of Barbados’ fiscal policies.
“The mere fact that Barbados is still in an IMF programme will tell you that we are not doing anything untoward as it relates to the debt-to-GDP metrics,” she said, noting the goal is to reduce the ratio to 60 per cent by 2036.
CAF President Díaz-Granados praised Barbados’ leadership and confirmed the bank’s commitment to supporting regional projects.
He announced that CAF will soon establish its headquarters in Barbados, reinforcing its long-term partnership with the island.
“We are using the technical and financial resources of this bank in a proper way,” he said. “We want to do more in a well-coordinated manner between the two banks [CAF and the Caribbean Development Bank] to better serve the islands and the region.”
CAF is expanding its footprint in the Caribbean, increasing its partnerships from three to seven countries.
The bank is also focusing on guarantees for small and medium-sized enterprises (SMEs), food security, water risk management, and broader infrastructure development. (SM)
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