Apr 25, Colombo: Sri Lanka has become the first South Asian country to access an innovative form of World Bank financing that provides immediate payouts after a major catastrophe such as a tsunami, cyclone or flood, the global agency said.
The World Bank has approved the US$102 million Development Policy Loan with a Catastrophe Deferred Drawdown Option (DPL with a CAT DDO), which is a line of credit that can be drawn on partially or in full if a country declares a state of emergency after a natural disaster.
The facility was approved by the Board along with a US$110 million Climate Resilience Improvement Project (CRIP), which will finance both short and long term interventions to reduce climate and disaster risk.
Francoise Clottes, World Bank Country Director for Sri Lanka said the package of financial support, including a first of its kind facility for South Asia, will help the government of Sri Lanka to respond more effectively to help people suffering from a natural disaster.
"Poor people are usually the first to suffer in natural disasters and they do not have the resources to cope with the losses in income or property," the official said.
"The facility will ensure that financial support remains intact for the country's programs to overcome poverty and increase shared prosperity."
Sri Lanka's status as the first country in South Asia to access the facility reflects its rise as a middle-income country and increasingly sophisticated development needs.
"This operation is part of a broader strategy to help the government of Sri Lanka shift to a more comprehensive approach to the management of disaster risks." said Marc Forni, Task Team Leader of the project.
"It will also help improve institutional mechanisms for disaster risk management and financial protection, increase capacity to ensure climate resilient development, and improve understanding of disaster risk," he added.
Sri Lanka was devastated by the Indian Ocean tsunami in 2004, which killed over 35,000 people and more recently, in 2000 a cyclone damaged 83,000 houses.