KATHMANDU, Oct 10: The World Bank (WB) is providing Nepal with US $150 million in contingent financing to support funding for natural or climate-induced hazard or health emergencies in the country.
The WB’s Board of Executive Directors on Tuesday approved the aforementioned amount to use in the given headings. “In the case of Nepal, post-disaster resources are critical to disaster response and recovery across the three levels of Nepal’s federal system,” reads a WB issued press release.
The international lending institution is providing the financial support under the Nepal Disaster Resilience Development Policy Credit with Catastrophe Deferred Drawdown Option (Cat DDO). The program supports policy and regulatory reforms to increase disaster resilience and strengthens institutional mechanisms for effective disaster response.
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According to the World Bank, the Cat DDO is an innovative disaster risk financing instrument that would help the government respond quickly to emergency needs without diverting resources from its ongoing development programs. It will complement the government’s existing response mechanisms such as the National Disaster Management Fund and the Prime Minister’s Disaster Relief Fund, reads the statement.
The WB added that the contingent financing through the Cat DDO that provides access to immediate liquidity in the aftermath of a disaster, ensures the government with one more instrument in its approach for disaster response and recovery. The program also supports the government in improving early warning systems and building the policies, institutions, and regulatory frameworks needed for risk reduction and risk informed investment in critical infrastructure as well as increasing preparedness for public health emergencies.
Citing the damages caused by the recent floods and landslides triggered by the incessant and heavy rainfall, the WB is providing the support to Nepal. The devastating natural disasters killed 246 individuals and 18 went missing while imposing losses to physical assets worth over Rs 17 billion across the country.
“As the flooding of recent weeks has shown, Nepal is facing a polycrisis of natural and climate-induced hazards and health emergencies, putting the country at ever increasing risk of serious financial shocks,” said David Sislen, regional country director of the WB for Maldives, Nepal, and Sri Lanka. “This operation supports the government’s reforms to build resilience against these escalating risks and provides a line of credit that can be accessed immediately following a disaster or public health emergency to ensure a timely and effective response.”
The Nepal Disaster Resilience Development Policy Credit with Cat DDO operation is supported by technical assistance and grant funding from the Global Facility for Disaster Risk Reduction and Recovery (GFDRR) and the Earthquake Housing Reconstruction Multi-Donor Trust Fund supported by the Canadian government, U.S. Agency for International Development (USAID), the Foreign, Commonwealth and Development Office (FCDO), and Swiss Agency for Development and Cooperation (SDC).
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