The Governments of Saint Vincent and the Grenadines have received $20 million in disaster risk financing support from the World Bank to aid their recovery from the recent eruption of the La Soufrière volcano, after a catastrophe contingent line of credit was triggered.
The eruption of the La Soufrière volcano on Saint Vincent has triggered a Catastrophe-Deferred Drawdown Option (CAT-DDO) instrument, that is designed to open up a World Bank line of credit after a natural disaster or catastrophe event triggers an emergency declaration.
The Catastrophe-Deferred Drawdown Option (CAT-DDO) is a risk financing instrument that acts a little like a parametric catastrophe bond, in that they provide a source of capital contingent on a disaster being declared in the beneficiary country.
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