The Washington-based International Monetary Fund (IMF) has approved a $4 million (US) loan in Emergency Assistance for Grenada, in support of Government’s efforts to deal with the devastating effects of tropical storm Lili, which struck on September 24, 2002.

Tropical storm Lili caused extensive damage to infrastructure, agriculture and property. The IMF estimates that the potential loss of earnings from the destruction of crops, is calculated at a value of at about one-third of exports in 2002.

The Ministry of Finance sought assistance from the IMF immediately following the storm, while Government initiated preliminary repairs to roads, bridges and other infrastructure. Government also provided compensation to farmers for losses, as well as assistance to some homeowners. The IMF praised the Government of Grenada for its prompt action in seeking assistance, following the damage caused by Lili.

Deputy Managing Director and Acting Chairman of the IMF’s Executive Board Shigemitsu Sugisaki stated on Monday that: “The authorities are to be commended for their speedy response to the effects of tropical storm Lili, which caused extensive damage - equivalent to nearly two percent of GDP - to infrastructure and the nutmeg crop, Grenada’s main agricultural export. He noted that essential infrastructure was repaired and emergency assistance provided to the affected population.

In the 2003 budget, Government allocated funds for infrastructural rehabilitation and for strengthening its disaster management and emergency relief operations. The IMF’s financial assistance will supplement the efforts of the authorities, and other donors, in rebuilding the infrastructure on a more permanent basis and restoring economic activity.

The IMF provides emergency assistance to member countries hit by natural disasters so that they can meet immediate balance of payments financing needs and maintain macroeconomic stability. The loan to the Government of Grenada carries a charge of 2.51 percent and a repayment period of eight equal quarterly installments over 3 1/4 to five years from the disbursement date.

The IMF’s financial assistance will supplement the efforts of the authorities, and other donors, in rebuilding the infrastructure on a more permanent basis and restoring economic activity.