Nepal and World Bank Study Catastrophe Bonds for Seismic Risk

The government is working with the International Bank for Reconstruction and Development to assess how such financial instruments might integrate into its existing disaster risk management framework. While the agreement marks a significant step toward diversification, both parties have yet to define specific issuance dates, payout triggers, or potential financing volumes. The World Bank Group Treasury will lead discussions with market participants to gauge appetite and structure requirements for a transaction tailored to Nepal’s specific hazard profile.

As one of the most disaster-prone nations globally, Nepal faces persistent challenges in securing immediate funding following natural calamities. This collaboration leverages the World Bank’s established catastrophe bond program, which has previously enabled other countries to transfer disaster risk to investors. By exploring this path, Kathmandu aims to build a more resilient financial buffer that complements its broader domestic efforts to strengthen infrastructure and emergency response capabilities.