Unleashing the Blue Economy of the Caribbean Additional Financing

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The UBEC Project will be implemented as a Series of Projects (SOP) over a fifteen-year period (with each project having a five-year life cycle) as per projected country demand. The UBEC project, under phase 1 of the SOP, is designed to stimulate economic recovery and support marine and coastal resilience in Grenada (GRE), Saint Lucia (SLU) and Saint Vincent and the Grenadines (SVG) by strengthening the sustainability and competitiveness of two critical, interconnected sectors – tourism and fisheries – and one underlying enabling infrastructure service, waste management. The Project will achieve its objectives by: (a) strengthening regional and national policies and institutional frameworks to bring back business and attract new investments; (b) scaling up innovative financing mechanisms aimed at enhancing employment, productivity and liquidity in the tourism, fisheries and waste management value chains through a regional MSME matching grant program and a regional climate-risk fisheries insurance scheme; (c) supporting investment in key infrastructure to de-risk and leverage private investment in blue economy activities, and build resilience to climate change; and, (d) adopting a contingency emergency response mechanism to promptly respond to natural disasters. While these challenges are regional in nature, addressing them will require interventions at both regional and national levels.Component 1 involves both institutional and policy strengthening and capacity building interventions at regional and national levels. Subcomponent 1.1. will be implemented by the OECS Commission at the regional level and support: i) revision of the OECS Common Tourism Policy to increase competitiveness based on a blue economy approach; ii) update of the OECS Regional Fisheries Policy and develop a regional strategy to combat Illegal, Unreported and Unregulated (IUU) fishing; and, iii) the use of Management Strategy Evaluation processes to enhance collaboration between resource managers and decision makers and to explore the trade-offs in performance of promising candidate management strategies through national, sub-regional and regional processes; and, iv) development of an OECS Waste Management Policy and Action Plan, and other regional policy reforms to address marine litter. Subcomponent 1.2 will be implemented by each participating country and support development and implementation of sector standards, policies, and operational guidelines as well as capacity development to ensure the region has access to a skilled workforce (e.g., specialized skills targeting new tourism and fisheries products to reach domestic and export markets; internet and social media marketing; greening operations to address climate adaptation and mitigation).Component 2 will support introduction of innovative finance mechanisms for direct investments in economic activities that enhance ocean health and resilience, leading to an increase in employment and greater GDP contribution from ocean assets. Sub-component 2.1 (a) will support business development services (BDS) and matching grants to increase the productivity, job creation, and upgrade the capabilities of MSMEs and communities within blue economy value chains. The matching grants will be provided at the individual firm level (Window 1) and at the value chain group level (Window 2). Specific attention will be given to assisting youth and women-owned MSMEs to be successful, and those that work within regional supply chains to address and build business ideas out of critical regional challenges such as plastics or sargassum. The program will be managed at the regional level by the OECS Commission to foster greater regional collaboration. Subcomponent 2.1. (b) will finance continuation and expansion of the Caribbean Ocean and Aquaculture Sustainability Facility (COAST) fisheries risk insurance scheme. COAST insurance supports governments’ efforts to rapidly channel financial resources to those fishers impacted by extreme weather events, by providing funding to cover the most immediate needs of fishers following a natural disaster or extreme weather event. COAST has been available to Grenada and Saint Lucia since 2019 and the Project will now extend it to SVG and continue support for GRE and SLU. Sub-component 2.2 will scale up coastal infrastructure investments in tourism, fisheries/aquaculture, and waste management that are sustainable, technologically advanced and resilient. Activities will be selected based on the following criteria: a) potential for job creation; b) potential economic impact in the short term; c) sustainability and resilience; and d) potential for catalyzing private sector investment. Example of activities to be financed include: i) enhancements of marine-based tourism infrastructure (e.g., visitor information, signage, access) to improve visitor experience and generate value from marine and coastal natural assets; ii) targeted investments in waste collection, segregation, recycling and disposal infrastructure to improve solid waste management systems and reduce plastics pollution; iii) pre- to post-harvest fisheries improvements to increase the value of fish products, and investments in aquaculture to support food security and economic diversification for local communities; and, iv) restoration of nature-based infrastructure for coastal resilience (e.g. replanting mangroves) and adoption of innovative technologies to strengthen monitoring and surveillance of the marine ecosystems.Component 3 is a Contingent Emergency Response Component (CERC) : On May 5, 2023, at the request of the three CRW-ERF recipient countries, the World Bank activated the CERC to address the food insecurity challenges and strengthen the resilience of the local food systems which were impacted by supply chain disruption and high food price inflation as a result of the COVID-19 pandemic and the war in Ukraine. The activation of the CERC created a financing gap of USD 30 million in the UBEC project which would be replenished by the approved USD 30 million IDA CRW-ERF credit. These priority areas were: (i) Crop production: fruits, vegetable and root crops; provision of inputs (seeds, fertilizers, equipment, planting material); greenhouses, propagation facilities, mechanization (power tiller, tractors, weed whackers), support to agro-processors and training; (ii) enhanced livestock production: artificial Insemination facility, semen and equipment, import of small ruminants, feed, tools, equipment, water harvesting and training; and, (iii) Enhanced Safe Fishery Production and reduction in food loss and waste: deployment of fish aggregating devices (FADs), improved sanitary and phytosanitary conditions, improvements in cold chain infrastructure, and improvements to safety at sea regimes.Component 4 will ensure effective project implementation, monitoring of activities and final project evaluation. The component will finance goods, consulting and non-consulting services, training and operating costs of the Project Implementation Units (PIU) in each country and at the Commission for expenditures related to project activities, including compliance with environmental and social standards, stakeholder and citizens’ engagement, and grievance redress mechanisms.