Kathmandu. The Government of Nepal and the World Bank have signed an agreement on Catastrophe Bonds to raise funds immediately during a major earthquake or natural disaster. <\/p>\n
On October 15, 2026, the World Bank officially launched this ambitious plan to manage risk through capital markets in collaboration with Nepal. <\/p>\n
Under this project, the World Bank will study and design the feasibility of issuing 3-year seismic parametric catastrophe bonds ranging from $80 million (more than Rs 10 billion) to $190 million (about Rs 25 billion) for Nepal. This mandate agreement has come into effect after the approval of the Council of Ministers of the Government of Nepal. <\/p>\n
The catastrophe bonds will have multi-dimensional impact on Nepal’s disaster management and financial position. <\/p>\n
Nepal will receive the funds immediately after an earthquake hits a parametric trigger 9, i.e. earthquake intensity and epicenter as soon as it meets the specified criteria. <\/p>\n
In times of disaster, the compulsion to spend on rescue and relief by cutting the development budget or transferring funds under other headings will be removed. Nepal will not rely only on traditional foreign aid and loans but will use modern financial mechanisms to transfer disaster risk from the global capital market. <\/p>\n
It will help in speeding up search, rescue and emergency relief operations after a major disaster. <\/p>\n
Nepal is one of the countries most vulnerable to earthquakes in the world. Keeping in mind the lessons learned from the 2072 mega earthquake and the recent earthquakes, this agreement means building an economic safety net for Nepal. <\/p>\n
In the traditional model, it was customary to raise funds from donors, aid, or new loans. Catastrophe bonds (the new model) allow financial resources to be raised from investors in the international capital markets. Instead of months and years of assessing the damage, it will now be paid immediately as soon as the default seasonal index criteria are reached. <\/p>\n
Relief will now be run through the pre-protected financial fund for those affected by the domestic budget and development works. <\/p>\n
This agreement is not a loan in itself or an immediate amount. This means that with the help of the World Bank, Nepal will create an insurance-like structure with international investors. <\/p>\n
In the event of an earthquake of the specified criteria, Nepal can use the money kept by investors for relief and reconstruction, which will make Nepal more economically self-reliant and disaster resilient.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kathmandu. The Government of Nepal and the World Bank have signed an agreement on Catastrophe Bonds to raise funds immediately during a major earthquake or natural disaster. On October 15, 2026, the World Bank officially launched this ambitious plan to manage risk through capital markets in collaboration with Nepal. Under this project, the World Bank […]<\/p>\n","protected":false},"author":5,"featured_media":320115,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45044,45159,45102],"tags":[],"class_list":["post-320374","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-international-news-en","category-news-en","category-reinsurance-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/320374","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=320374"}],"version-history":[{"count":1,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/320374\/revisions"}],"predecessor-version":[{"id":320375,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/320374\/revisions\/320375"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/320115"}],"wp:attachment":[{"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=320374"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=320374"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/english.insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=320374"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}