“Comprehensive toolkit to support countries after natural disasters announced by World Bank Group.”

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World Bank Group’s Comprehensive Toolkit to Support Countries During Crises

The World Bank Group, aiming to create a world free of poverty on a livable planet, has announced a suite of new and expanded actions to help countries respond effectively to an ever-growing onslaught of crises. At the Summit for a New Global Financial Pact, Ajay Banga unveiled an expanded toolkit for crisis preparedness, response, and recovery, which includes several key elements:

Pausing Debt Repayments: The World Bank Group will launch Climate Resilient Debt Clauses to provide a pause in debt repayments for the most vulnerable countries during times of crisis or catastrophe. This will allow countries to focus on meeting the urgent needs of their people without worrying about loan repayments.

Redirection of Financing: The World Bank Group will introduce a new rapid response option, enabling all client countries to immediately redirect a portion of their lending portfolio for emergency needs when a crisis occurs. This will provide quick access to funds for emergency responses, such as redeploying undisbursed funds from longer-term infrastructure projects.

Advance-Emergency Systems: To enhance crisis preparedness, the World Bank Group will link investments in prevention and preparedness with financing for catastrophe and crisis response support. This will enable countries to build emergency systems and have quick-disbursing finance available on day one of a crisis.

Backstopping Development Projects: The World Bank Group will support private sector clients in crisis preparedness and response to ensure business continuity, job protection, and long-term sustainability. Innovative parametric insurance products will be designed to backstop development projects, helping work get back on track quickly.

Enhanced Catastrophe Insurance: The World Bank Group will offer catastrophe insurance solutions, including embedding catastrophe insurance into lending products, such as Cat Bonds. Efforts will be made to make these insurance products affordable for lower-income countries by collaborating with donors to buy down insurance premiums

The combination of these measures is expected to make billions of dollars available for crisis response across countries. The World Bank Group seeks to build resilience, provide expertise, and insure against risks, helping countries be better prepared to tackle various threats.

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