The World Bank Board of Executive Directors has approved a US$150 million loan to the Dominican Republic (DR) to provide immediate financing in the event of a natural disaster or a public health emergency.
This Catastrophe Deferred Drawdown Option, or Cat DDO, provides countries with immediate financing without taking resources away from social and development programs.
“As the Dominican Republic and its Caribbean neighbors live through the direct consequences of climate change and will continue facing vulnerability to extreme weather events, our priority is to be better prepared to save lives, assist affected communities, and ensure that key infrastructures such as hospitals, schools, roads, bridges and houses are better built to withstand natural disasters. This financing from the World Bank will help us mitigate risks from climate shocks, natural disasters, as well as pandemics,” said Danilo Medina, President of the Dominican Republic.
According to a recent World Bank and Ministry of Economy, Planning and Development study, the economic impact of disasters in the country is estimated to an average of US$420 million per year over the period of 1961 to 2014. The Dominican Republic ranks 27 out of 171 countries in the 2016 United Nations World Risk Index that ranks countries risks of natural disasters.
“The most important lesson from our experience in disaster response across the world is to invest in prevention and preparedness to be able to respond speedily when disaster strikes,” said Tahseen Sayed, World Bank Director for the Caribbean. “This is the first operation of its kind in the Caribbean, and focuses on a series of reform to strengthen the government’s capacity for disaster risk management, climate adaptation, and financial resilience.”
The policy reforms supported under the Cat DDO will:
- Incorporate disasters and climate-related risks into fiscal and debt management;
- Enforce zoning regulations, building codes and safety standards for public infrastructures, in particular for schools and health facilities;
- Strengthen flood and drought risk reduction measures as part of a comprehensive water resource management national strategy;
- and further build resilience of public investments by integrating disaster and climate-related risk analysis.
The Cat DDO is a flexible loan with a final maturity of 19 years, including a 12-year grace period.
