Nepal, World Bank explore earthquake catastrophe bond
Summary
Nepal and the World Bank are exploring a catastrophe bond to help the country secure rapid funding after a major earthquake. The proposed instrument would provide immediate liquidity for recovery without adding to Nepal’s debt burden.
Key Points
- Nepal has partnered with the World Bank to explore issuing a catastrophe bond for earthquake preparedness.
- The bond is designed to give the country quick access to funds after a predefined disaster event.
- Catastrophe bonds can transfer disaster-related financial risk to investors and provide rapid liquidity without increasing government debt.
- The World Bank Group’s Treasury will assess the financial feasibility and structure of the proposed bond with Nepal and potential investors.
