The Bahamas COVID-19 Response
Project Description
On April 28, 2021 MIGA signed a contract of guarantee for US$ 128.15 million, effective, April 28, 2021, with Banco Santander SA of Spain, for NHSFO coverage of its non-shareholder loan to the Ministry of Finance of the Government of the Commonwealth of the Bahamas. Proceeds of the loan facility will support the Public Hospitals Authority (PHA) and the Small Business Development Center (SBDC), as part of the country’s COVID-19 response program, and will be used to modernize the public health system and support MSMEs at a critical juncture. Approximately US$89 million of the facility will be allocated to the PHA to upgrade two public hospitals, procure medical equipment and fund its project management costs, and US$20 million will be granted to the SBDC for loan guarantees to MSMEs in an effort to preserve jobs, improve productivity, stimulate economic activity, and promote resiliency. While not explicitly gender focused, women-owned MSMEs will be the main beneficiaries due to their prevalence in SBDC’s portfolio. The proposed guarantees will form part of MIGA’s COVID-19 Response Program, Pillars 1 and 2a.
Environmental and Social Categorization
This component of the Project is categorized as FI-2 under MIGA’s Policy on Environmental and Social Sustainability (2013).
Development Impact
The MIGA-guaranteed loan will be utilized by the SBDC to finance programs in connection with MSMEs, which account for 20-30% of the country’s Gross Domestic Product, helping to preserve jobs, improve productivity, stimulate economic activity and support resiliency. Specifically, the financing will be used by SBDC to provide guarantees for MSMEs, which will enable them to access loans from financial institutions. Additionally, SBDC will use the MIGA-guaranteed financing for microloans and grants to eligible MSMEs, as well as fund the operational expenses of programs geared to youth, public sector entrepreneurship and economic recovery. This component of the Project would be aligned with Pillar Two of MIGA’s COVID-19 fast-track facility.