The World Bank has approved a $200 million project to support Colombia in managing disaster risks related to natural events and public health emergencies. This funding aims to assist Colombia in developing policies and tools for responding effectively to such high-impact events at various levels.
Colombia is vulnerable to numerous geological and hydrometeorological threats, including earthquakes, floods, landslides, droughts, and wildfires. Additionally, the country may face new pandemics following the COVID-19 experience. These threats pose significant financial challenges for Colombia and affect its gross domestic product.
The fourth Disaster Risk Management Development Policy Loan with a Catastrophe Deferred Drawdown Option (Cat DDO) offers bridge financing that can be disbursed partially or fully during high-impact natural or epidemiological events. This instrument is crucial for reducing Colombia's fiscal vulnerability to disasters.
The Cat DDO will include climate change considerations and promote resilience in sectors like health, transportation, and tourism. It will also encourage community participation and incorporate a gender perspective in risk management.
“This loan reiterates the World Bank's commitment to continue supporting the country's efforts in disaster risk management and provides the necessary liquidity for Colombia to timely assist the population affected by a disaster, especially the poorest and most vulnerable people," stated Mark R. Thomas, World Bank Director for Colombia, Mexico, and Venezuela.
This is the fourth Cat DDO signed with Colombia by the World Bank. Previous loans were disbursed in response to events such as the La Niña phenomenon in 2011 and 2022, as well as the COVID-19 pandemic in 2020. The Ministry of Finance and Public Credit along with the National Planning Department (DNP) will oversee technical coordination and implementation of this loan.
Resources from the Global Facility for Disaster Reduction and Recovery (GFDRR) supported this operation's preparation. They aided DNP in creating a Municipal Disaster Risk Index adjusted by capabilities and helped define a geotechnical corridor for Colombian roads through collaboration with the Ministry of Transport.
Additionally, resources from Swiss Economic Cooperation and Development (SECO) have facilitated joint efforts with Colombia's Ministry of Finance to develop financial protection strategies against disaster risks across national, subnational, and sectoral levels to enhance fiscal capacity against disasters.