On September 7, 2004, Hurricane Ivan, a category 3 storm, struck the Caribbean island of Grenada, causing widespread destruction. The financial cost of the disaster was estimated at more than US$900 million, more than twice the country's GDP. The hurricane damaged more than 80 percent of the country's building structures, and only two of the 75 public schools remained undamaged.
Severe disruption of the health sector also occurred, including the almost complete destruction of Princess Alice, the island's second largest hospital. An estimated 80 percent of the power distribution grid was lost, and nearly 70 percent of the tourism infrastructure was rendered uninhabitable. Hurricane Ivan also badly damaged the agricultural sector, with widespread damage to nutmeg crops, the island's principal agricultural export.
World Bank Response
The World Bank was one of the first donors physically on the ground in the aftermath of the hurricane and the team focused its efforts in assisting the government with recovery efforts. The Bank team prepared a "needs assessment" to help prioritize reconstruction activities and mobilize resources. This assessment later evolved into the comprehensive damage and loss assessment issued by Organization of Eastern Caribbean States (OECS) and the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).
In October 2004, the Bank helped to convene a donors' meeting during the International Monetary Fund/World Bank's Annual Meetings to present the findings of the OECS-ECLAC damage and loss assessment. The presentation raised awareness of the severity of the emergency and enabled the government to appeal directly for additional reconstruction funding. As a result, Grenada was able to raise US$150 million toward reconstruction - an extraordinary sum given Grenada's small population. In the crucial months following the hurricane, the Bank team remained in Grenada to ensure an effective response to the disaster.
To ensure that resources reached the government quickly, the Bank team reallocated funds from on-going projects to the emergency recovery effort, while simultaneously preparing an emergency recovery loan. In November 2004, the World Bank approved the Hurricane Ivan Emergency Recovery Project (HIERP), a program of US$10 million in loans and credits to support the overall recovery program. The HIERP emphasized the rehabilitation and reconstruction of schools and recovery activities in the health sector.
The four principal components of the HIERP were:
- US$3 million for critical imports (e.g. low sulfur diesel) necessary for electricity generation,
- US$5 million to rehabilitate and reconstruct schools,
- US$2.5 million to restore the island's general hospital (St. George's) and regional health facilities, and
- US$500,000 for project management and supervision.
In September 2005, the European Union (EU) established a trust fund administered by the World Bank to support the Grenada Post-Ivan School Rehabilitation Project. For the duration of the trust fund, the EU contributed more than €10 million, which co-financed the reconstruction and rehabilitation of all damaged schools. Such donor coordination was recognized as a reconstruction "best practice" by the Grenadian government. One year after the hurricane struck, the Bank team issued a report evaluating the overall reconstruction effort. This report enabled donors and the authorities adapt their programs to the changing conditions on the ground.
Paving the Way for Long-Term Improvements
The Bank has sought to maximize funds over the short- and long-term. While addressing urgent needs, the HIERP also emphasized the need to invest in longer-term measures, including the rehabilitation and reconstruction of permanent facilities (i.e., schools and hospitals) to avoid building temporary facilities and replacing them later with permanent buildings at greater cost.
Other long-term considerations included:
- Anticipating future growth in student enrollment in schools selected for reconstruction. Incorporating additional disaster prevention measures to complement the rebuilding of damaged infrastructure, such as regular maintenance, appropriate zoning, hazard mapping and creating and enforcing construction codes and disaster information mechanisms.
- Employing locally-based contractors rather than off-island contractors to promote local employment and offset some of the negative economic impacts caused by the disaster.
As the project ended in June 2009, all five of the island's health facilities were restored to pre-hurricane conditions. In the education sector, 18 schools of 19 target schools were rehabilitated or reconstructed. The last school, which is fully financed by the European Union trust fund, will be completed by end of November 2009.