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Guatemala to Tackle Natural Disasters, Health Emergencies with IDB Support

The Inter-American Development Bank (IDB) has approved a $400 million contingency loan financing a program to mitigate the impact of natural disasters and health emergencies on Guatemala’s public finances.

The operation was approved under the IDB’s Contingent Credit Facility for Natural Disaster and Public Health Emergencies (CCF), an innovative instrument that bolsters member countries’ financial resiliency and increases the Bank’s climate financing for Latin America and the Caribbean.

Guatemala is a country with a high exposure to natural events and public health hazards. As climate change effects intensify, it is expected that the frequency of events like floods and droughts will increase.

The project will help the country build up its financial resilience and responsiveness by boosting the availability of efficient, quick-access contingency financing to cover extraordinary public expenses targeting populations affected by natural disaster and public health emergencies.

The $400 million operation will be structured under the CCF’s I and II modalities. The $300 million modality I will provide parametric coverage for earthquakes, hurricanes, and rainfall excess associated with cyclonic systems. The $100 million modality II will provide coverage for volcanic eruptions, droughts, and eventual epidemic and pandemic outbreaks.  

In addition, the loan is expected to help upgrade the country’s integrated disaster risk management through improvements to the five strategic pillars of the Integrated Disaster Risk Management Plan (IDRMP): governability and policy framework development; risk identification and knowledge; disaster risk reduction; emergency preparedness; and financial risk management.    

Considering disasters tend to have a greater impact on the most vulnerable segments of the population, the program also seeks to integrate a gender perspective and attention to vulnerable groups in disaster risk management through specific activities included in the IDRMP.

The contingent loan’s potential beneficiaries are Guatemala’s population at large, particularly those segments receiving the aforementioned emergency assistance.

This operation is in line with Vision 2025 – Reinvesting in the Americas: A Decade of Opportunities, a plan created by the IDB to promote economic recovery and inclusive growth of Latin America and the Caribbean in the field of climate change.

The IDB’s $400 million loan is for a 25-year term, with a 5.5-year grace period, and interest rate based on LIBOR.

About us

The Inter-American Development Bank is devoted to improving lives. Established in 1959, the IDB is a leading source of long-term financing for economic, social and institutional development in Latin America and the Caribbean. The IDB also conducts cutting-edge research and provides policy advice, technical assistance and training to public and private sector clients throughout the region.

Contacts

Alvarez Lopez,Diego Fernando

Alvarez Lopez,Diego Fernando
Additional Contacts

De Olloqui,Fernando

De Olloqui,Fernando
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