World Bank Approves New Project Loan for the Dominican Republic

• The World Bank has approved a new project to assist the Dominican Republic in promoting key institutional reforms for climate resilience, reduced water, soil, and air pollution, as well as enhanced natural resource protection.
• The Sustainable Development Policy Loan (SDPL) project valued at US$400Mn will support the government’s efforts to strengthen institutional and financing capacity for environmental protection, with important positive effects on public health and the livelihoods of communities involved in tourism and fishing activities.
• “The Dominican Republic, loses the equivalent of 0.4% of its Gross Domestic Product annually due to extreme natural hazards associated with climate change. The World Bank’s support has been and continues to be crucial in achieving our goals of building climate resilience in agriculture, ensuring food security, improving landscape and natural resource management, and addressing the challenges posed by sargassum,” stated Pavel Isa Contreras, Minister of Economy, Planning, and Development.
• The SDPL project aims to enhance the government’s institutional and financial capacity for natural resource protection, climate change adaptation, and mitigation. It will also support marine conservation, reduce air and marine pollution, and strengthen river and water body protection.
• Additionally, the project will help regulate waste management from electrical and electronic equipment and address environmental challenges such as phasing out hydrofluorocarbon substances, thereby lowering greenhouse gas emissions. Furthermore, it will help tackle the sargassum seaweed issue and establish the regulatory framework for issuing green, social, and sustainable bonds.
• Overall, these climate adaptations and mitigation policies should further reduce economic and financial vulnerabilities, boosting inclusive and resilient growth. This, supported by the existing sound fiscal policies and fundamentals of the country should keep Dom Rep’s economic outlook relatively positive over the near to medium term. Real GDP is projected to grow around 4.6% and 4.3% in 2024 and 2025, respectively after growing by an estimated 4.7% in 2023.

(Sources: The World Bank Group & NCBCM Research)