By Fay Simmons

Tribune Business Reporter 

jsimmons@tribunemedia.net

The Davis administration has signed a $30m loan agreement with the Inter-American Development Bank to support small and medium-sized businesses in the Blue Economy.

Prime Minister Philip Davis said the blue economy is “filled with untapped potential” and the IDB financing will allow entrepreneurs to capitalize on the broad range of opportunities in the sector.

“This sector is filled with untapped potential, and we have targeted the vast potential within the blue economy as one of the pillars of our economic diversification strategy,” said Mr Davis.

“Capitalising on the value added from fisheries, shipping, and marine biotechnology will require new strategies and partnerships to expand the production of goods and services beyond traditional exports.”

He said in addition to providing investment opportunities for entrepreneurs the project will also fund the construction of visitor centres on Family Islands and signage at historical sites.

A portion of the proceeds will also be used to fund Bahamas Agriculture and Marine Science Institute (BAMSI) and initiatives to mitigate the effects of climate change.

Mr Davis explained that $17.735m will be spent on local businesses, $5.05m has been designated for BAMSI and $4.77m will be used on climate change mitigation efforts.

“Component 1 is focused on small business support. $17.735m will support small and medium-sized enterprises with small loans, grants, and guarantees for developing sustainable tourism, aquaculture, and mariculture initiatives, said Mr Davis.

“Under Component 2, $5.05m is designated for BAMSI-related activities. And finally, $4.77m is allocated for Component 3, which will fund ongoing activities to mitigate the effects of climate change in The Bahamas.”

This breakdown accounts for $27.555m of the $30m loan. 

When pressed by reporters to explain how the remaining $2.445 of the loan arrangement will be allocated Senator Michael Halkitis, minister of economic affairs said the government will be expected to provide those funds as a counterparty to the loan.

“This is a $30 m program. In all IDB programmes, there's an element of it called counterparty financing. So the IDB would provide, in this case, about 90 percent of the funds. The counter party, which is the government, is expected to provide the additional funds. So that is the difference that you see… the government would provide the remainder as the counterpart,” said Mr Halkitis.

Shirley Gayle, the IDB's Bahamas representative, said the loan has an execution period of five years and but could not confirm the interest rate.

“This loan would have an execution period of five years. Generally, on our projects the standard time for execution and disbursement is five years. However, based on the progress over that time, there's a possibility to extend,” said Ms Gayle.