Building Financial Resilience in the Face of Climate Change: Grenada’s Urgent Reality

As a small island state, Grenada sits on the frontline of climate change. The increasing frequency and severity of climate-related shocks, particularly hurricanes and extreme storm events, continue to shape the social and economic landscape of the country. These events are not only disruptive to our operations, but more importantly hinders the communities we serve and national development.

The Cost of Climate Change to Grenada
The impact of Hurricane Beryl in July 2024 was a sobering reminder of this vulnerability. The storm caused an estimated USD 218 million in damage, equivalent to 16.5 percent of Grenada’s GDP, with total economic losses reaching nearly one-third of the nation’s annual output. In Carriacou and Petite Martinique, the devastation was even more staggering, with 95–98 percent of infrastructure destroyed. While Grenada received a USD 44 million disbursement from the Caribbean Catastrophe Risk Insurance Facility (CCRIF), subsequent flooding later that year inflicted further losses with utility damages alone surpassing XCD 900,000.

Climate-related storms and flooding cost Grenada an average of USD 20 million per year, or 1.7 percent of GDP, underscoring the urgent need for both national and institutional resilience.

Rallying to Help Respond
These shocks have very real financial consequences. Sectors like agriculture, tourism, and small business experience immediate cash-flow pressures that often translate into higher loan delinquencies and increased short-term credit risk. For the Republic Financial Holdings Limited Group, our diversified portfolio and strong risk management frameworks have helped limit long-term disruption. However, the cost of assisting affected customers, temporary branch closures, and infrastructure repairs continues to rise.

In response, Republic Bank (Grenada) is accelerating efforts to integrate climate risk into our credit assessments and expand resilience-focused financial solutions. These include disaster recovery loans, climate-smart agriculture financing, and support for clients to adopt business interruption insurance to protect cash flow against physical disruptions.

To better safeguard our own operations, we are complementing this strategy with significant investments in digital and green energy infrastructure. Our new Grenville Branch, currently under construction, will be the Bank’s first “Green Branch,” designed with solar photovoltaic systems, battery storage, and energy-efficient features for second-level resilience. This will allow operations to continue even when national electricity or telecommunications systems are affected. We will replicate this approach in 2026 at our largest retail location, Melville Street, with additional upgrades planned across the network in 2027.

Beyond our internal efforts, we are strengthening our ability to mobilise climate finance by advancing external partnerships, including progress toward Green Climate Fund accreditation. This will give us access to concessional financing and enhance our credibility as a climate-focused financial institution.

Grenada’s vulnerability is undeniable, but so is our resolve. At Republic Bank (Grenada), we remain committed to building the financial resilience our country needs to thrive in the climate-challenged future ahead.