Nepal, World Bank Partner on Catastrophe Bond for Earthquake Risk

Kathmandu: Nepal has partnered with the International Bank for Reconstruction and Development (IBRD), a member of the World Bank Group, to explore the development of a catastrophe bond aimed at strengthening the country’s financial preparedness for earthquakes and the damage they may cause.

The partnership will assess how Nepal can use capital markets to mobilize financial resources quickly in the aftermath of a major earthquake. The proposed catastrophe bond is expected to provide access to funds immediately when a predefined disaster event occurs, helping the country respond to losses and accelerate recovery.

The agreement marks the beginning of a collaboration to examine how capital-market instruments can complement Nepal’s broader disaster risk management strategy. As one of the world’s most disaster-vulnerable countries, Nepal has been working to reduce disaster risks, strengthen preparedness and improve financial mechanisms for post-disaster recovery.

Under the agreement, the World Bank Group’s Treasury will work with the Government of Nepal and potential capital-market investors to assess the financial feasibility and possible structures for developing and issuing the catastrophe bond.

The initiative is part of the World Bank Group’s global Catastrophe Bonds Program, which supports countries in transferring disaster risks to capital markets and securing financial protection against major natural disasters.