World Bank funding to help improve emergency and economic resilience
WASHINGTON, September 26, 2014 - The World Bank’s Board of Executive Directors today approved US$7 million in financing to Seychelles to help the country better cope with extreme natural events such as floods, mud slides, or tsunamis, which have wreaked havoc on the island nation in the past. Seychelles is the first African country to partner with the World Bank on this innovative disaster risk initiative.
The Disaster Risk Management Development Policy Loan with Cat DDO (Cat DDO )is financed by the International Bank for Reconstruction and Development (IBRD) and serves as a contingent line of credit that enables Seychelles to “draw down” funds in the immediate aftermath of a natural disaster which is declared a national emergency.
“This is a powerful step forward for disaster risk management in Africa,” said Makhtar Diop, the World Bank’s Vice President for Africa. “This operation will allow the Government of Seychelles to concentrate on strengthening its methods to ‘build back better’ in the aftermath of natural disasters while also protecting its people against the effects of natural disasters and making their development gains and plans more disaster resilient.”
Although Seychelles is the first African country so far to implement a Cat-DDO, Diop believes that other countries on the continent may follow its example, based on the success of similar which were pioneered in countries in the Latin America and Caribbean Region and later in the South East Asia and Pacific region”. Located off the coast of Sub-Saharan Africa in an area that suffers from some of the highest number of casualties and people affected by disasters, Seychelles will now be able to use its Cat-DDO funding to better safeguard its people and their development future from the impact of natural disasters.
“The reason the Cat DDO is so significant is because it provides immediate liquidity when medium-sized or cumulative disasters hit Seychelles," said Pierre Laporte, the minister of finance, trade and investment for Seychelles. "As a result, we can avoid diverting the funds originally set aside for development projects attending to the needs of our country's poorest.”
During the aftermath of Cyclone Felleng which impacted Seychelles in January 2013 the Global Facility for Disaster Reduction and Recovery (GFDRR) funded a “damages, losses and needs” assessment which was conducted by the government with support from the World Bank’s Africa Disaster Risk Management team. While no deaths were reported, the ensuing floods, mudslides, and rock fall resulted in $8.4 million worth of damages (equivalent to 0.77% of the 2012 Seychelles GDP) and contributed to losses in key areas such as transport and tourism.
Countries that are eligible for a Cat-DDO are required to have a disaster risk management framework in place. For the last two decades, the Government of Seychelles has ramped up efforts to improve disaster resilience by establishing a dedicated department for risk and disaster management that supports the mainstreaming of risk into development and coordinates the emergency response.
“The Government has shown its commitment to disaster risk management, which is illustrated by recently approving a Disaster Risk Management Act, a disaster risk management policy, and by establishing a risk information database,” said Doekle Wielinga, The World Bank Task Team Leader for the Cat DDO. “
Apart from providing funding to address the impact of disasters, the Cat-DDO will help improve the country’s disaster risk management framework, which includes strengthening legislation and integrating disaster risk reduction into planning and decision-making.
In addition to the Cat-DDO the Bank’s Board today approved the third Seychelles Sustainability and Development Competitiveness Loan. The loan in the amount of US$7 million will help support the government’s effort to create reforms that build economic resilience. These reforms will promote improvements in the business climate, enhance fiscal transparency, improve public financial management and increase fiscal oversight and controls of public enterprises.
“This is the third and final operation of a programmatic series and we are happy to see the progress Seychelles has made implementing its economic restructuring program,” said Rafael Munoz Moreno, the World Bank Task Team leader for the competitiveness loan. “It has produced strong fiscal discipline and improved economic resilience and competitiveness.
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