IDB okays US$25mn loan to strengthen disaster risk management

- Tuesday, July 26, 2011

IDB okays US$25mn loan to strengthen disaster risk management

IDB has approved a US$25mn loan to strengthen Peru's disaster risk management, the bank said in a release.

Peru is one of the Latin American countries most exposed to natural disaster risks. According to a recent assessment carried out by IDB, an earthquake similar to those that occurred last year in Haiti or Chile could cause the country losses of up to US$43bn.

The funding will help the government draft and approve regulations within the legal framework of its national disaster risk management system.

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The loan is the second of three programmatic policy-based operations to be disbursed to the country. The first, for US$25mn, was approved in 2010, and the third, for US$20mn, is scheduled for 2012.

The first program is aimed at supporting regulatory, institutional and public policy reform in the areas of risk identification, vulnerability reduction, disaster management and financial management of natural disaster risk.

The 20-year loan will be managed by Peru's economy and finance ministry. The credit comes with a five-year grace period and Libor-based variable interest rate.