CATASTROPHE DEVELOPMENT POLICY LOAN DEFERRED DRAW DOWN OPTION (DDO)

closed

The development objective of the Catastrophe Development Policy Loan Deferred Draw Down Option Project for Guatemala is to enhance the Government's capacity to implement its disaster risk management program for natural disasters. This objective will be achieved by supporting policy and institutional reform in the following aspects of disaster risk management: i) improving risk identification and monitoring; ii) increasing disaster risk reduction investments; iii) strengthening institutions and planning capacity for risk management; and iv) developing risk financing strategies. Local community capacity to prepare for, and respond to, disasters caused by adverse natural events should be improved and strengthened. During the last 10 years the response and preparation capabilities in Guatemala have increased. However, Hurricane Stan and the 2008 floods revealed that despite good response capabilities at the municipal level, National Coordinator for Disaster Reduction (CONRED) response skills were still weak at the local level. Rapid and flexible financing is critical for early recovery. On average, 50 percent of the economic losses associated with large natural disasters occur in the post-disaster period. Guatemala and other countries have experienced the critical need for immediately available liquidity in the aftermath of a disaster event to ensure that the Government can reestablish crucial services as fast as possible. If the Government has access to untied liquidity, it will be possible to accelerate recovery, minimize business interruption, and secure the operation o f critical public facilities, such as health services.