US$600m credit for natural disaster emergencies
WASHINGTON, United States, February 20, 2009 – A new US$600 million credit facility from the Inter-American Development Bank (IDB) is providing aid for countries in the Caribbean and Latin America to better cope with natural disasters.
The facility loans will provide member countries with liquid resources to cover urgent financing needs after a natural disaster of unusual proportions, until other sources of funding can be accessed, the IDB said.
A release issued by the IDB yesterday explained that all member countries will be eligible to receive facility loans of up to US$100 million or one per cent of their gross domestic product (GDP), whichever is less.
It said the drawdown of funds would be contingent upon the occurrence of a natural disaster of a type and intensity determined by the facility guidelines.
Countries are required to have an adequate integrated disaster risk management programme that includes measures on risk analysis, prevention, mitigation, emergency preparedness and disaster response, as well as provisions for adequate and sustainable financing of the remaining risks. It should also be executable in a period of no more than five years.
“This facility is one of the instruments that the IDB has been designing to implement its integrated disaster risk management and finance approach. The approach includes a menu of financial options to cover different levels of risks arising from unexpected natural disaster emergencies,” the IDB release said.