The Inter-American Development Bank (BID) has launched a new financing program for natural disasters.
A recent study by the institution revealed that 74 climate-related events of this nature hit Latin America in 2024, causing damages equivalent to $10 billion.
For this reason, this program aims to calculate risks, identify areas prone to disasters, provide governments with this data to decide where to carry out public investment projects, coordinate financial assistance, and other initiatives among countries and the private sector.
The new financing program for natural disasters
The aim is to respond to phenomena like the one that occurred in BahÃa Blanca.
The program is called “Prepared and Resilient in the Americas.” It is an initiative that will allocate $10 billion in non-reimbursable financing.
It will run between 2025 and 2030, adding to the ongoing cooperation with all countries.
“Strengthening resilience to natural disasters is no longer optional, it’s a necessity,” stated the President of the IDB, Ilan Goldfajn, when presenting the program and its objectives.
The initiative is based on three pillars. One focuses on “providing countries with advanced tools to better assess risks and associated costs.”
In this sense, the government could access data on calculations or estimates of areas that could be affected by a natural disaster. These data will allow authorities to make relevant decisions in prevention.
Collaboration with the private sector
The second pillar consists of establishing a “collaboration network between countries and the private sector.”
It aims to ensure access and coordination of necessary services and goods to facilitate a rapid response when a natural disaster occurs.
Natural disasters are becoming increasingly unpredictable.
“When a natural disaster occurs at this moment, countries have to call all other countries to see if they send helicopters, planes, aid,” IDB authorities stated.
The goal, at this point, is to ensure speed in responding to these phenomena and reduce costs.
A third point of the program aims to promote “innovative financial instruments to strengthen economic capacity,” when countries have to face natural disasters.
In other words, issuing bonds or different instruments that help reduce costs and increase response capacity by obtaining financing from the private sector.
The BahÃa Blanca case
Regarding the catastrophe in BahÃa Blanca, mentioned among the BID officials, the bank agreed on a $200 million loan with the Government. Goldfajn indicated on social media that this assistance corresponds to a “Contingent Credit Facility“.
This is a financing line aimed at providing a rapid response to emergencies and involves reallocating previously committed resources for Argentina, but destined for other purposes.
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