On July 1st, 2024, Hurricane Beryl made an impactful landfall in Grenada, including its islands of Carriacou and Petite Martinique, as a powerful Category 4 storm. The storm’s devastating effects highlighted the critical need for robust support systems.
Fortunately, Grenada was prepared. Thanks to a sophisticated multilayered insurance strategy, the island swiftly accessed support from the CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility). In order to specifically cover potential losses related to water and sanitation infrastructure, the National Water and Sewerage Authority (NAWASA) in Grenada accessed a parametric insurance product from Caribbean Water Utility Insurance Collective Segregated Portfolio (CWUIC SP). As a result, NAWASA proudly became the first water utility to receive a payout from CWUIC. Thanks to CWUIC’s parametric insurance, NAWASA received a substantial payout of US$ 2.2 million within just 14 days of Hurricane Beryl. This prompt financial assistance enabled them to initiate recovery operations and strengthen the resilience of NAWASA’s water systems.
We have already started working on concept notes, one for strengthening the resilience of the intake of the Petite Martinique Desalination Plant and another for increasing the resilience of NAWASA’s raw water lines. We are seeking funding support from donor agencies, including the Caribbean Development Bank. Our strategic aim is to implement a few projects within the next 4-6 months that will bolster the resilience of our water systems, ensuring we are better prepared for future impacts.
Mr. Terrence Smith, NAWASA’s Acting General Manager
The support illustrates the strength of the CWUIC program, which is designed to enhance resilience and offer financial protection to Caribbean water utilities against the impacts of extreme weather events like hurricanes, tropical storms, and heavy rainfall.
Belize Water Services (Belize), the National Water and Sewerage Authority (Grenada), and the Dominica Water and Sewerage Company (Dominica) were the first utilities to confirm policy purchases prior to the June 1st start of the hurricane season.
CWUIC goes beyond traditional insurance. It’s structured to be a comprehensive center of excellence for disaster risk management and financing, featuring three key components:
- The CWUIC Response Program providessupport for emergency response planning and helping in the restoration and rebuilding of facilities post-disaster.
- The Parametric Insurance for Disasters offers swift financial assistance to help utilities respond to and recover from natural disasters efficiently.
- The CWUIC Resilience Program provides advisory services and technical assistance to identify and structure priority projects aimed at building resilience against natural hazards.
The CWUIC was established as a segregated portfolio within the CCRIF but with its own management committee (MC), which is backed by a dedicated team of experts led by the CWUIC Coordinator, Christopher Husbands. The team is actively working to expand CWUIC’s reach, enhance utility preparedness, and bolster the overall resilience of water systems throughout the Caribbean.
CWUIC was created in response to requests from the Caribbean water sector for help in developing disaster financing and management solutions to mitigate the growing threat associated with the climate crisis. The main development partners included theInter-American Development Bank Group (IDB), the UK Government’s Foreign, Commonwealth & Development Office (FCDO), the Caribbean Development Bank (CDB), and CCRIF.
A total of US$8.8 million in grant resources has been mobilized for the establishment of the CWUIC SP. This includes US$8.2 million from the IDB Group, of which US$5.6 million was contributed by the UK FCDO. The FCDO funding supports technical assistance for finalizing the CWUIC SP structure and provides premium subsidies for insurance coverage to water utilities in six Caribbean countries. The FCDO has also provided US$25 million in development aid to the Caribbean Catastrophe Risk Insurance Facility (CCRIF) to capitalize the CWUIC SP. This interest-free facility will be repaid after a 20-year period and will be used in conjunction with reinsurance to safeguard the CWUIC SP against unexpected losses from policy claims.
Additionally, the IDB Group has received contributions from two IDB-managed multi-donor trust funds (the NDC Pipeline Accelerator Multi-donor Trust Fund and the Multi-donor AquaFund), the Climate Investment Funds, and, more recently, The Coca-Cola Foundation. The CDB has also provided US$650,000 in grant funds for technical assistance.
With such a robust foundation and team, CWUIC SP is positioned to offer invaluable support to Caribbean water utilities, ensuring that they remain resilient and well-equipped to face the challenges posed by extreme weather events.
Join CWUIC now!
Enrolling in CWUIC not only provides immediate financial protection through the quick payouts but also contributes to long-term resilience and preparedness.
Contact CWUIC at ch.cwuic@ccrif.org to explore how your utility can join this forward-thinking program and secure a robust support system for the future.
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