World Bank provides $102m for catastrophes
Washington: Sri Lanka today became the first South Asian country to
access an innovative form of World Bank financing that provides
immediate payouts after a major catastrophe such as a tsunami, cyclone
or flood.
Approved by the World Bank's Board of Executive Directors, the $102
million Development Policy Loan with a Catastrophe Deferred Drawdown
Option (DPL with a CAT-DDO) is a line of credit that can be drawn on
partially or in full if a country declares a state of emergency after a
natural disaster.
The facility was approved by the Board along with a $110 million
Climate Resilience Improvement Project (CRIP), which will finance short
and long term interventions to reduce climate and disaster risk.
Poor people are the first to suffer in natural disasters and they do
not have the resources to cope with the losses in income or property,"
said World Bank Country Director for Sri Lanka, Francoise Clottes.
The package of financial support, a first of its kind facility for
South Asia, will help the government to respond more effectively to help
people suffering from a natural disaster while ensuring that financial
support remains intact for the country's programs to overcome poverty
and increase shared prosperity.
The DPL with a CAT DDO facility was first launched by the World Bank
in 2008, with the first users being middle-income countries in Latin
America and the Caribbean.
The Board has since approved DPL with a CAT-DDO in the Philippines,
Costa Rica, Colombia, El Salvador, Guatemala, Panama and Peru. Countries
accessing the facility after a major disaster found it to be a flexible
and prompt financial tool that enabled governments to focus on emergency
response measures rather than spend valuable time and resources trying
to raise funds.
"Sri Lanka's status as the first country in South Asia to access the
facility reflects its rise as a middle-income country and increasingly
sophisticated development needs. This operation is part of a broader
strategy to help the government of Sri Lanka shift to a more
comprehensive approach to the management of disaster risks," said Task
Team Leader of the project, Marc Forni.
It will also help improve institutional mechanisms for disaster risk
management and financial protection, increase capacity to ensure climate
resilient development and improve understanding of disaster risk, he
said.
Sri Lanka's vulnerability to natural disaster was brought into sharp
focus with the Indian Ocean tsunami in 2004, which killed more than
35,000 people in the country. Despite the enormity of this event, it is
regular floods and droughts that present the most significant natural
disaster threat to growth and development in Sri Lanka over the long
term. This is particularly true for northern and eastern provinces. But
most of the country suffers significant exposure to multiple hazards.
During the period 2000-10, floods cumulatively affected more than 8.5
million people, while droughts affected more than five million. In
addition, landslides and high winds frequently destroy or damage
thousands of houses every year. Though less frequent, cyclones have a
significant impact.
A cyclone in 1978 devastated the low-lying district of Batticaloa,
killing more than 1,000 people and displacing nearly one million. More
recently, in 2000, a cyclone damaged 83,000 houses.
The DPL with a CAT DDO can be disbursed over a period of three years
and may be renewed up to four times for a total of 15 years. |