Prime Minister Philip J. Pierre on Tuesday defended the government’s decision to secure more than US$22.8 million in financing from the Caribbean Development Bank (CDB) to upgrade key water infrastructure, describing the investment as critical to improving reliability and addressing longstanding weaknesses in the island’s water system.
Addressing Parliament, the Prime Minister, who also serves as Minister for Finance, presented a resolution seeking authorization to borrow US$22,829,181 from the CDB to finance the John Compton Dam raw water pipeline replacement project, also known as the Ninth Water Project. The initiative is intended to strengthen water transmission to communities across the north of the island served by the Water and Sewerage Company Inc. (WASCO).
Pierre explained that under the Public Finance Management Act, any borrowing by the government requires parliamentary approval and must be paid into the Consolidated Fund. “Parliament authorizes the Minister for Finance to borrow an amount of US$22,829,181 from the Caribbean Development Bank to finance the John Compton Dam raw water pipeline replacement project,” Pierre told the House.
According to the Prime Minister, the project will fund the replacement of approximately five kilometres of ageing raw water pipeline that carries water from the John Compton Dam, a primary source of supply for much of northern Saint Lucia.
The existing pipeline, installed decades ago, will be replaced with a larger 32-inch pipeline, which officials say will improve efficiency, reduce leaks and strengthen reliability in the national water distribution system.
Pierre said the investment is necessary to modernize critical infrastructure and support WASCO’s efforts to meet increasing demand. “This project will deal with the critical replacement of approximately five kilometres of raw water pipeline that serves the John Compton Dam,” he said. “It will improve the reliability of the water supply, improve efficiency and reduce leakage and non-revenue water.”
The financing package from the Caribbean Development Bank consists of a combination of ordinary capital resources and special development funds. Of the total loan:
US$15,690,407 will come from the bank’s ordinary capital resources, including funds from its equity and market resources as well as agency funds.
US$7,138,774 will be sourced from special development funds, including contributions from the CDB’s Special Development Fund and the Italian Line of Credit.
Repayment terms vary depending on the funding source. Loans from the ordinary capital resources and the Italian line of credit are repayable over 17 years, while the portion financed through the Special Development Fund will be repaid over 30 years. Repayments will be made through a series of quarterly installments following a grace period of several years after the signing of the loan agreement.
Interest rates also differ across the funding streams:
Approximately 5.6% variable interest on the ordinary capital resources portion. 0.75% fixed interest on the Special Development Fund portion.
1.4% interest on the Italian line of credit. A commitment fee of 1% per annum will also apply to the ordinary capital resources component.
Addressing water shortages
Pierre stressed that improving the island’s water supply remains a priority for the government, particularly as climate change, drought conditions and aging infrastructure continue to affect water availability. “Water is very important to us,” he told Parliament. “Scarcity comes from a number of factors, including climate change and the aging infrastructure we inherited.”
He added that the new pipeline will play a key role in stabilizing supply to communities in the north of the island, where population growth and tourism demand place additional pressure on the system.
Minister for Physical Development and Public Utilities and MP for Choiseul/Saltibus also voiced strong support for the resolution, emphasizing that the investment is essential for national development and public well-being. “Water is life,” the minister said during the debate. “It is not merely a commodity or just another line item in a national budget. It is the lifeblood of our health, agriculture, tourism and our very survival.”
He explained that the project targets a critical part of the water transmission network serving more than half of the island’s population, noting that the existing pipeline has been in place since the 1980s and is increasingly prone to leaks and failures.
The new infrastructure, he said, will not only increase capacity but also incorporate modern monitoring systems to detect leaks and improve operational efficiency. Government officials say the project forms part of a broader strategy to stabilize WASCO’s operations and strengthen water security across Saint Lucia.
The investment, they argue, represents a strategic use of borrowing to build essential infrastructure and address systemic challenges affecting the island’s water supply. “We are making a strategic investment in the survival and economic future of this nation,” the minister told Parliament. “This project is key to unlocking a future of water security for Saint Lucia.”
The resolution authorizing the loan was presented as part of the government’s wider effort to modernize water infrastructure and ensure a more reliable supply for households, businesses and key sectors such as tourism and agriculture.
