The Government of Mexico has received its first World Bank Catastrophe Deferred Drawdown Option (Cat DDO), which will help the country prepare better and respond more quickly to natural disasters, while also complementing both of its IBRD CAR Mexico 2024 and IBRD CAR Mexico 2024 (Pacific) catastrophe bonds and parametric insurance protection.
The World Bank Group has approved US $500 million in financing, marking the first time Mexico has accessed a Catastrophe Deferred Drawdown Option (Cat DDO). The credit line will strengthen the country’s ability to respond quickly to natural disasters, climate change impacts, and public health emergencies.
For context, a Cat DDO is effectively a line of credit or borrowing from the World Bank, whereby if the government of the country announces an emergency situation it can then access the funding source.
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