Low-Interest Loan Facility to Support Climate-Resilient Tourism
A Climate-Resilient Marine Spatial Plan will guide the protection and sustainable use of the Virgin Islands’ marine environment. It will define key zones for conservation, fisheries, recreation, and development—supporting climate resilience while enabling a balanced blue economy.
Introduction
The tourism sector is highly vulnerable to high economic impact from severe weather events, which is compounded by lost revenue during the event recovery period. For instance, the overall cost to the tourism sector from 2017 category 5 Hurricanes Irma and Maria has been estimated at USD$1.06 billion, 75% of the Territory’s 2016 GDP, and the sector took multiple seasons to fully recover.
These facts underscore the importance of proactive measures to make hotels and other tourism accommodations, marinas and related facilities, tour operation infrastructure and other tourism assets more resilient.
Additionally, while the sector has the ambition of greening its operations, including its energy source, the upfront cost of renewable energy installations remains high and prohibitive for many property and business owners.
The Impact
This project will design and pilot a revolving Low-Interest Loan Facility aimed at making it affordable for tourism property and business owners to implement a wide variety of projects to make their facilities and operations more resilient to hurricanes, floods and other climate change impacts, leading to reduced impact from climatic events and slow onset changes. The Facility would also support transition to a carbon-neutral tourism sector.
The Facility design scope will include consultations with tourism property and business owners to assess needs, consultations with The Virgin Islands Climate Change Trust Fund and potential partnering banks to deliver the Facility, consultations with design processionals to understand typical retrofitting needs and associated costs, development of an Operational Manual to guide the Facility, development of technical support tools to assist interested persons in accessing the Facility, and development of marketing/promotional materials. The Facility would be designed taking into account lessons learnt from similar facilities in the region and piloted over at least a 3-5-year period.
The Problem
Destroyed tourism property
The Solution
Property owner accessing financing to rebuild
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