The World Bank says it has increased its lifeline to the Caribbean and other small countries rebuilding after disasters, allowing them to postpone loan and interest repayments so they can focus on recovery.
The Washington-based financial institution announced in Baku, Azerbaijan, on Tuesday that its Climate Resilient Debt Clause (CRDC) now covers all natural calamities, including droughts, floods, and pandemics, in response to country feedback.
The World Bank noted that the CRDC formerly allowed qualified nations to delay principle and/or interest repayments on IBRD and IDA loans for up to two years for tropical cyclones and earthquakes.
“We are helping vulnerable countries quickly access more meaningful support by significantly expanding the scope to cover all catastrophes. World Bank Group President Ajay Banga remarked at COP29 in Baku that leaders need a trusted partner in times of crises. “World Bank wants to be that partner.”
The World Bank said that 14 of 45 CRDC-eligible nations have included this clause in their loan agreements.
Only St. Vincent and the Grenadines deferred following Hurricane Beryl, according to the World Bank.
“Borrowers pay nothing, and any CRDC fees are recovered from concessional resources,” the bank claimed. We have streamlined the process for clients to delay repayments in the case of a disaster and made the clause more applicable for nations with many natural disasters.
The Crisis Preparedness Response Toolkit includes the CRDC and other resources for countries recovering from natural catastrophes.
The World Bank added that this toolset redirects funding for emergency operations.
