IDB Group Mobilizes $1.26B for Jamaica’s Recovery After Devastating Hurricane Melissa

Despite the scale of the disaster, Jamaica’s strong disaster-risk financing architecture, supported over the years by the IDB, has helped reduce immediate fiscal pressure.

In the aftermath of Hurricane Melissa, one of the most destructive storms ever to hit the Caribbean, Inter-American Development Bank Group (IDB Group) President Ilan Goldfajn joined regional leaders in Jamaica to survey damaged communities and signal the Bank’s strong support for the country’s emergency response and long-term recovery.

The hurricane left widespread devastation across Jamaica’s western parishes, severely damaging homes, hospitals, water systems, and electricity infrastructure. Goldfajn’s visit followed the presentation of early damage estimates showing US$8.8 billion in physical losses, equivalent to 41 percent of Jamaica’s GDP, positioning Hurricane Melissa as the costliest natural disaster in the nation’s history.

Jamaica’s Preparedness Softened the Initial Blow

Despite the scale of the disaster, Jamaica’s strong disaster-risk financing architecture, supported over the years by the IDB, has helped reduce immediate fiscal pressure. Through the Contingent Credit Facility (CCF) — which provides rapid access to funds after qualifying disasters — Jamaica was able to quickly mobilize resources for relief and stabilization.

The IDB recently expanded Jamaica’s CCF allocation, making US$300 million available for parametric events. These pre-arranged insurance-style instruments allow governments to receive immediate payouts once pre-defined disaster thresholds are met.

A Comprehensive IDB Support Package: Financing + Technical Expertise

The IDB Group has unveiled a US$1.26 billion financing package supported by US$4.7 million in technical-cooperation grants to assist Jamaica through two coordinated phases: emergency response and medium- to long-term reconstruction.

Phase 1: Emergency Response

To support immediate humanitarian needs and early recovery:

• US$300 million available through parametric financing under the CCF

• US$500,000 in direct emergency humanitarian assistance

• US$2.15 million in rapid technical-cooperation grants

This funding supports immediate response actions such as restoring essential services, food and shelter delivery, and initial damage assessments.

Phase 2: Reconstruction and Resilience

The IDB is preparing a long-term reconstruction partnership worth up to:

• US$960 million in sovereign financing

• US$2.05 million in additional technical-cooperation grants

These investments will address key sectors most affected by Hurricane Melissa.

Sector-by-Sector Reconstruction Priorities

1. Health Infrastructure

The hurricane severely impacted hospitals and health centers in western Jamaica. The IDB will support:

• Rebuilding damaged facilities

• Relocating vulnerable buildings to safer areas

• Retrofitting existing structures for resilience

• Integrating digital upgrades and climate-ready designs

2. Housing Recovery

Thousands of Jamaicans lost their homes, particularly in rural and coastal communities. The Bank’s assistance will help Jamaica implement its three-phase housing response:

• Emergency shelters

• Temporary and transitional housing

• Long-term reconstruction, including climate-resilient designs and stronger building standards

3. Energy Grid Modernization

Extreme weather severely impacted Jamaica’s electricity grid. The IDB, IDB Invest, and the World Bank’s IFC will jointly develop:

• A public-private proposal for grid modernization

• Investments to strengthen grid resilience and reliability

• Opportunities to integrate renewables and reduce system vulnerability

4. Water Systems Restoration

The hurricane disrupted water supply across several parishes. Working with the National Water Commission, the IDB will:

• Restore damaged services

• Assess infrastructure vulnerabilities

• Develop a holistic water-resilience plan using HydroBID, the Bank’s hydrological modeling platform

Private Investment Will Play a Central Role

Goldfajn stressed that private capital is critical for scaling recovery and ensuring Jamaica’s fiscal stability. The IDB Group will combine public and private funding through integrated platforms that are designed to attract investment from insurers, development banks, pension funds, and private firms.

“Resilience isn’t tomorrow’s agenda; it’s crucial today,” Goldfajn said. “We’re supporting Jamaica to rebuild stronger, avoid future losses, and protect lives.”

Regional Cooperation: A United Caribbean Response

Jamaica’s recovery is being supported by a broader regional effort. Barbados, Guyana, and other Caribbean governments have expressed solidarity and provided resources. Regional unity was also evident at COP30, where Caribbean leaders collectively advocated for resilience financing and new global disaster-support mechanisms.

The IDB Group’s regional initiatives—such as ONE Caribbean, Ready and Resilient Americas, and the new Caribbean Multi-Guarantor Debt-for-Resilience Initiative—aim to build stronger, more climate-resilient societies across the region. The latter initiative, launched at COP30 in partnership with CAF and the Caribbean Development Bank, is designed to reduce sovereign debt burdens while expanding investment in climate adaptation and disaster resilience.

A Long-Term Commitment to Jamaica’s Future

As Jamaica moves from emergency response toward rebuilding, the IDB Group says it will remain a key partner in designing financial solutions, improving resilience, and strengthening institutional capacity.

Recovery planning is underway, grounded in lessons from previous storms and supported by coordination with the World Bank, ECLAC, and local authorities. The goal is not only to restore what was lost, but to rebuild a stronger, safer, and more climate-resilient Jamaica.