Nepal and World Bank explore catastrophe bond after devastating floods

Nepal and the World Bank have signed a mandate agreement to explore the development of a catastrophe bond. This financial instrument aims to provide the Himalayan nation with rapid access to funds following major natural disasters by transferring a portion of disaster risk to international capital markets.

The initiative follows devastating floods in the Bhotekoshi and downstream Trishuli river basins. Triggered by an avalanche near the Nepal-China border, the floods resulted in nearly 1,500 deaths and left over 5,000 people unaccounted for. Physical damage is estimated at approximately 1.66 billion US dollars, affecting hydropower projects, solar plants, roads, and bridges.

In response to the infrastructure damage, 18 suspension bridges along the Trishuli corridor that were destroyed by the flooding have been repaired and returned to operation. The repairs, costing approximately Rs 55 million, include critical links in the Nuwakot, Dhading, and Gorkha districts.