(Bloomberg) -- Barbados has successfully completed a debt swap designed to generate $125 million in savings that it can use to make its water and sewage systems more resilient to climate change.
A unit of the Canadian Imperial Bank of Commerce arranged a sustainability-linked loan, or SLL, backed by $300 million in guarantees from the European Investment Bank and the Inter-American Development Bank, the Washington-based multilateral lender said in statement on its website on Monday. The proceeds of the deal are being used to replace some of the Caribbean island’s most expensive debt.
The transaction will allow Barbados to turn an existing sewage-treatment plant into a modern water-reclamation facility that will support agricultural irrigation and replenish the island’s groundwater. The deal will also enable investments dedicated to preserving water and improving the island’s sewage system.
The sustainability targets of the SLL are related to the volume and quality of reclaimed water generated by the upgraded plant. If the targets aren’t met, the government will incur a financial penalty to be paid into a specialized trust for environmental investments, the Barbados Environmental Sustainability Fund, the statement said.
©2024 Bloomberg L.P.