The Inter-American Development Bank (IDB) has expanded disaster risk coverage by an additional $2 billion and introduced new instruments for both sovereign and private clients.
The $2 billion expansion includes $1 billion for its Contingent Credit Facility for Natural Disasters and another $1 billion through Climate Resilience Debt Clauses.
Under the Contingent Credit Facility, the IDB is increasing the number of eligible countries and raising total coverage to $5 billion by 2026. The facility provides quick-disbursing liquidity to help deliver humanitarian relief, restore basic services, and implement other response measures in the wake of severe disasters or health crises.
The Climate Resilience Debt Clauses allow eligible countries to pause debt payments in the event of a qualifying disaster, freeing up fiscal space for emergency response and recovery. By 2026, the IDB expects to provide $4.2 billion in total coverage under this mechanism.
The IDB also announced a new Regional Disaster-Risk Transfer Program, which will help countries—particularly small and vulnerable economies with limited market access—transfer extreme event risk to insurance and capital markets.
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Initial support will be provided to Belize, Honduras, and Panama, with plans to expand to other countries and through regional risk-pooling mechanisms. Spain and France have expressed interest in backing the initiative.
Additionally, IDB Invest is launching a private-sector Business Resilience Program aimed at protecting private investments from external shocks that impact business continuity. The debt clauses offered under this program allow for principal deferrals and tenor extensions of up to two years, helping de-risk transactions and unlock greater private investment in sectors such as agribusiness, infrastructure, energy, and tourism.
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