Hurricane Melissa Knocks Out Power to 77% of Jamaica and Triggers a Full $150 Million Catastrophe Bond Payout

Hurricane Melissa made landfall in south-western Jamaica on 28 October 2025 as a Category 5 hurricane, with maximum sustained winds of about 185 miles per hour, among the strongest Atlantic landfalls on record. By the evening of 28 October, more than 77% of customers of Jamaica Public Service, the island's electricity utility, were without power, according to the Jamaica Observer. The following day the newspaper reported that more than 500,000 JPS customers had lost supply.

On 7 November the World Bank announced that Melissa had met the pre-agreed parametric triggers of Jamaica's catastrophe bond, qualifying for a full payout of $150 million to the government. Jamaica's grid is built largely overhead, with transmission and distribution lines on poles exposed to wind and falling trees. Before the storm, Jamaica's Office of Utilities Regulation allowed JPS to draw US$5 million from its Electricity Disaster Fund, a customer-funded reserve, for hurricane preparations. A catastrophe bond transfers disaster risk from a government or company to investors.

Jamaica first obtained catastrophe bond coverage from the World Bank in 2021 and renewed it in 2024. The $150 million payout goes to the government for national recovery and is not specifically earmarked for the electricity sector. Melissa intensified rapidly over very warm waters in the Caribbean Sea in the days before landfall. Small island power systems such as Jamaica's depend heavily on imported fuel. Distributed generation, particularly rooftop solar with batteries, can help households and critical facilities maintain power when the grid is down.

Restoring an island grid after a Category 5 storm is constrained by materials and labour as much as by money. Rebuilding the grid to higher standards, including stronger poles, undergrounding in critical areas and microgrids, would reduce vulnerability to future storms but adds cost. The full payout of the catastrophe bond is likely to be studied by other governments and by the bond market. Melissa also caused damage in Haiti, Cuba and other parts of the Caribbean.