The United Kingdom has announced an investment of US$25 million to establish an affordable insurance scheme that will protect essential water and sanitation services in the Caribbean.

This initiative, announced on Tuesday, September 19, known as the Caribbean Water Utility Insurance Collective (CWUIC), which will be part of CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility). it will be funded by the Inter-American Development Bank (IDB), the Caribbean Development Bank (CDB), and the Coca-Cola Foundation. It will provide rapid payouts to repair services damaged by disasters such as hurricanes and floods.

As the frequency of extreme weather events continues to rise due to climate change, disaster-risk finance schemes like CWUIC have become crucial tools for alleviating the financial burden on the most vulnerable countries and expediting recovery efforts.

Early action to restore access to safe drinking water can help prevent the spread of diseases.

All Caribbean water and sanitation utilities are encouraged to join and will benefit from insurance at substantially below-commercial prices and investments to build resilience to disasters. UK grants will also enable utilities in Belize, Jamaica, Haiti, the Dominican Republic, Guyana, and Suriname to buy the insurance they need.

David Rutley, UK Minister for the Americas and Caribbean, stated: “The people of the Caribbean are on the frontline of natural disasters, which are increasing in frequency due to climate change. This first-of-its-kind scheme will enable Caribbean countries to maintain essential services in the face of storms and floods, while greatly reducing the financial burden on individual governments. The UK is determined to play its part in helping small island developing states build resilience to extreme weather events with access to fairer and reliable funding.”

The investment into CWUIC is part of the UK’s contribution to the G7/V20 Global Shield Against Climate Risk, a comprehensive initiative launched during COP27 to tackle climate-related challenges on a global scale.

The investment is part of the UK’s wider commitment to supporting the Caribbean in disaster resilience. The flagship £350 million UK Caribbean Infrastructure Fund is also supporting the development of critical infrastructure including bridges, renewable energy, ports, water, and sea defences across the region.