MIGA Helps Upgrade Two Public Hospitals in The Bahamas
WASHINGTON DC, June 23, 2021 – The one-two punch of Hurricane Dorian and the COVID-19 pandemic has revealed shortcomings in public hospital facilities in The Bahamas, drawing attention to chronic bed shortages, long wait-times, and limited access to appropriate diagnostic tools.
In response, MIGA, a member of the World Bank Group, has issued a guarantee for US$118.56 million to Banco Santander SA of Spain for its loans to the Ministry of Finance of the Government of the Commonwealth of The Bahamas. Proceeds from the MIGA-guaranteed loan will support (i) the Public Hospitals Authority’s (PHA) modernization of the public health system to respond to COVID-19 and build resilience post-pandemic; and (ii) micro, small and medium enterprises (MSMEs) through the Bahamian Small Business Development Centre (SBDC).
This project is MIGA’s first engagement in The Bahamas. It is aligned with MIGA’s Fast-Track COVID-19 Facility, aimed at making available capacity to underwrite up to US$6.5 billion in new guarantees for activities that will address the impact of COVID-19 in MIGA member countries.
Approximately US$89.4 million of Santander’s loan will be allocated to the PHA to upgrade two of the island nation’s three public health care facilities, procure medical equipment, and fund its project management costs. US$20 million will be granted to the SBDC for loan guarantees to MSMEs to preserve jobs, improve productivity, stimulate economic activity, and promote resiliency. MIGA’s guarantee provides protection to Santander against the risk of non-honoring of sovereign financial obligations.
“The Bahamas is at a critical juncture,” MIGA’s Executive Vice President Hiroshi Matano said. “MIGA’s guarantee will shore up the Bahamian health care system, preserve jobs, and promote the resiliency of small businesses, many of which are women-owned.”
The MIGA-guaranteed project with PHA will increase bed capacity in public sector hospitals by 22 percent, create a new infectious disease unit at Princess Margaret Hospital, and expand the emergency department at the same hospital by 30 percent. Renovations at Sandilands Rehabilitation Center (SRC) will create a dedicated space for the treatment and management of COVID-19 cases that allow for patients to be separated by level and type of care needed.
The pandemic has also led to a sudden, unprecedented curtailment in tourism, the main driver of the Bahamian economy, a deep reduction in economic activity, and an increase in unemployment. GDP is expected to contract by 16.2 percent in 2020. MSMEs, the backbone of the country’s economy, account for 20-30 percent of GDP and 47 percent of all employment in The Bahamas. The SBDC project will directly benefit approximately 260 MSMEs, which will receive SBDC guarantees through programs to support their loan applications to private financial institutions.
“Given the twin disruptions and the instability they have caused, MIGA’s support will allow the Government to secure U.S. dollar funding from international financial markets at a reasonable cost and tenor that it could not obtain otherwise,” said the Honorable J. Kwesi Thomson, Minister of State, in the Bahamian Ministry of Finance.
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders.
Since its creation, MIGA has issued over $59 billion in guarantees across 118 developing countries.
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