The World Bank approves US$ 300 million credit line to strengthen Colombia’s resilience to disasters, climate change and health emergencies
The World Bank's Board of Directors today approved a US$ 300 million loan for Colombia to strengthen its resilience to natural hazards, climate change and health emergencies.
The Third Disaster Risk Management Development Policy Loan with a Catastrophe-Deferred Drawdown Option (Cat DDO III) is a contingent line of credit that provides immediate liquidity in the event of a high-impact disaster or disease outbreak.
“This third loan goes hand in hand with all our efforts to ensure the country can respond in a timely manner to catastrophic events. It provides significant financial support for disaster risk management policies in Colombia,” said José Manuel Restrepo Abondano, Minister of Finance and Public Credit of Colombia.
Colombia first received a Cat DDO loan in 2008 for US$ 150 million, which was disbursed in 2011 during the La Niña 2010-11 phenomenon. The second Cat DDO, for US$ 250 million, was approved in 2012 and disbursed in 2020 at the onset of the COVID-19 pandemic.
The Cat DDO III will support government efforts to strengthen policies, strategies and plans at sectoral and subnational level to generate risk knowledge and reduce risks related to extreme climate-linked events—whose likelihood has increased due to climate change, as well as to other disasters and health emergencies. It will focus on reducing fiscal vulnerability to these events, strengthening cimate change adaptation capacity, and increasing the resilience of the health, housing and transportation sectors.
The Cat DDO loan would be activated and funds disbursed following a presidential declaration of a national state of emergency in response to a disaster affecting all or part of the country, in accordance with national legislation.
"Colombia is a regional leader in disaster risk management; nevertheless, it faces challenges in responding to risks related to disasters, climate change and public health, which mainly affect the most vulnerable," said Mark R. Thomas, World Bank Director for Colombia, Mexico and Venezuela. "The Cat DDO III supports actions that are expected to have direct and indirect positive effects on poverty in the short, medium and long term through a more streamlined, resilient institutional framework."
The Ministry of Finance and Public Credit and the National Planning Department will be responsible for coordinating project activities related to the implementation of the Cat DDO III.