Barbados introduces special loans bill to lower cost of existing debt, not add to it, government department says

By Government of Barbados

BRIDGETOWN, Barbados – The government of Barbados is taking steps to reduce the cost of its existing debt, so that more money can be directed to important services such as healthcare. The Special Loans (Amendment) Bill, 2026, passed by parliament this week, increases the amount government is legally allowed to borrow under the Special Loans Act from $2.5 billion to $5 billion.

The higher limit does not mean government has borrowed another $2.5 billion, nor does it increase the national debt. The cheaper loans that will replace existing debt must be taken out under the Special Loans Act, and the previous limit did not leave enough room for them.

The new limit allows government to swap costly debt for lower-cost financing, and to pursue similar savings in future without amending the law each time. Every loan under the Act must still be approved by parliament.

Minister of finance, Ryan Straughn, explained:

“Think about a family paying a mortgage. If that family can get a lower interest rate, they may be able to reduce what they pay every month. They still have a mortgage, but it costs them less. That is what we are doing for Barbados. We are working to replace about $1.2 billion of existing debt with financing on better terms. We expect this could save the country approximately $320 million over time, once the arrangements are finalised.”

The finance minister added:

“And what do we want to do with those savings? Put them to work for our people. This is about paying less on the debt we already have, so that more of our money goes to the care Barbadians need. That means more support for people living with diabetes and high blood pressure, stronger mental health services, and care closer to home. We are not borrowing more to do this. We are paying less in interest and putting the difference into the health of our people.”

The minister stressed that the amendment does not increase the national debt or introduce any new taxes.

Key facts on Special Loans (Amendment) Act, 2026

• What changed: The most government may borrow under the Special Loans Act rose from $2.5 billion to $5 billion.
• What did not change: Every loan still needs approval from the House of Assembly and the Senate, in public.
• Last change: 2014, when the limit rose from $1.5 billion to $2.5 billion.
• First use: Refinancing about $1.2 billion of existing debt at a lower cost.
• Expected saving: About $320 million over time. Not a new loan, not a cash payment.
• Where the savings go: Mental health, care in communities, and the prevention and treatment of diabetes, hypertension and other chronic illnesses.
• Taxes: The change alters no tax.
• Debt target: 60 percent of the size of the economy by 2035/36. Today: 93.7 percent. In 2018: 178.9 percent.

*All amounts are in Barbados dollars unless stated.