The Tribune

THE Bahamas is gaining access to a $60m credit line targeted at micro, small and medium-sized businesses (MSMEs) in the so-called ‘blue economy’ in a bid to boost sustainable development.

The Inter-American Development Bank (IDB), in a statement issued yesterday, said the credit line includes an initial $30m loan as part of an initiative to enable The Bahamas to maximise the full economic potential of its marine and ocean economy and the resources contained within it.

“The Bahamas’ geography and climate give it enormous potential in the blue economy, which is an approach that [brings] together economic growth, environmental sustainability and healthy marine ecosystems by maximising the value of ocean, marine and coastal resources,” the IDB said in a statement.

“According to IDB estimates, the blue economy currently accounts for approximately 21.5 percent of the Bahamas’ GDP (gross domestic product), and up to 50 percent if indirect impacts are included. But it still has potential to expand, especially in the Family Islands.... and Grand Bahama.”

“The Local Sustainable Development in the Blue Economy programme will help Bahamian MSMEs in the blue economy thrive. It will facilitate sustainable tourism, expand research in agriculture and marine sciences, and strengthen marine protected areas in the Family Islands region,” explained Claudia Stevenson, an IDB specialist in its competitiveness, technology and innovation division.

The multilateral lenders said the initiative is designed to boost the productive capacity and potential of around 120 MSMEs in the Family Islands by providing them with financing and technical assistance. It will also award 160 scholarships for science degrees, and 120 scholarships for specialised training for tour guides.

The operation also aims to build-up public institutions such as the Bahamas Agriculture and Marine Science Institute (BAMSI) and the Bahamas National Trust (BNT). Marine protection initiatives will benefit, in particular, 25,000 inhabitants on Andros and Abaco.

The IDB added that the initiative is structured around three components. The first will promote growth among MSMEs operating in the blue economy, helping them become larger and more efficient by adopting innovations and technology, and facilitating the expansion of sustainable tourism-related businesses.

The second will develop specialised human capital for the blue economy, in co-ordination with BAMSI. This component will also foster the production of scientific knowledge and its incorporation into industry.

Finally, the third component will enhance the blue economy’s sustainability by financing the implementation and improvement of management plans for existing marine protected areas (MPAs). This component also includes actions to raise community awareness scale up coral and mangrove restoration, and collect data for marine species monitoring.

The project, and the first $30m loan, have been approved by the IDB’s Board of executive directors. The credit line consists of two individual and sequential loans over the course of ten years. The first loan of $30m has a 25-year repayment term, a five-and-a-half year grace period, and an interest rate based on the Secured Overnight Financing Rate (SOFR).