THIMPHU, May 20, 2020 − The Royal Government of Bhutan and the World Bank today signed a $14.8 million Development Policy Financing with Catastrophe Deferred Drawdown Option (Cat DDO) to help Bhutan undertake a comprehensive set of reforms to manage climate and disasters risks, including disease outbreaks.
The agreement was signed by Finance Minister Lyonpo Namgay Tshering and Tenzin Lhaden, Acting Country Representative, on behalf of the World Bank.
The reform program supported by the Cat DDO operation is structured under two pillars. The first pillar focuses on integrating climate and disaster resilience into the built environment. The second pillar focuses on strengthening Bhutan's institutional and technical capacity for emergency preparedness and response. The World Bank operation will provide dedicated contingent financing to support the government respond to imminent or occurring natural disasters, including a public-health emergency event.
"Bhutan has taken important steps to increase its technical and financial capacity to manage disaster risks," said Mercy Tembon, World Bank Country Director for Bangladesh and Bhutan. "This operation aligns closely with the Government's 12th Five Year Plan to enhance the country's climate and disaster resilience. With the COVID-19 crisis, this support is even more critical to provide Bhutan access to immediate liquidity in the aftermath of disasters, including disease outbreaks."
The Cat DDO funds may be drawn in the case of a natural disaster, including a public health outbreak. The line of credit will be available to be partially or fully drawn down at any time within the next three years and can be renewed for an additional three years for a total of 6 years.
