Bhutan and the World Bank Forge a Model Partnership on Climate and Disaster Risk Management

In February 2025, with the signing of a US$40 million IDA Climate and Disaster Resilience Development Policy Financing with a Catastrophe Deferred Drawdown Option (Cat DDO), Bhutan took one other main step towards fortifying its local weather and catastrophe resilience. This revolutionary monetary instrument gives Bhutan with fast entry to funds following pure disasters or well being emergencies—a lifeline in instances of disaster.

This is Bhutan’s second Cat DDO. The first, a US$15 million operation accredited in 2020, helped the nation swiftly handle the COVID-19 pandemic. Together, these operations symbolize Bhutan’s deepening dedication to proactive threat administration and mark a brand new milestone in a decade-long partnership with the World Bank.

Navigating Complexity: Reforming Through Crises

Over the previous decade, Bhutan has confronted a convergence of crises: extreme flooding, rising glacial lake outburst flood dangers, and chronic earthquake threats. Meanwhile, a wave of emigration—greater than 64,000 individuals or 9% of the inhabitants—has strained Bhutan’s technical capability throughout key sectors.

Despite these pressures, Bhutan has remained centered. Its thirteenth Five Year Plan prioritizes constructing nationwide resilience, and it has made regular progress integrating catastrophe and local weather threat administration throughout establishments and infrastructure.

A Partnership for Systems Transformation

Through the Strengthening Risk Information for Resilience in Bhutan project financed by the Climate Investment Funds (CIF) and the Global Facility for Disaster Reduction and Recovery (GFDRR), together with the Japan-World Bank Program for Mainstreaming Disaster Risk Management in Developing Countries, the World Bank has supported Bhutan on a number of reforms led by the Ministry of Infrastructure and Transport (MoIT), the National Center for Hydrology and Meteorology, the Department of Local Governance and Disaster Management underneath the Ministry of Home Affairs, and the Property Assessment and Valuation Agency underneath the Ministry of Finance:

1. Integrating Resilience into Infrastructure and the Built Environment

2. Strengthening Emergency Preparedness and Financial Resilience

Additionally, the World Bank and GFDRR have supplied suggestions to enhance the next reforms which can be being finalized by the respective authorities company: the National Aviation Policy and the National Surface Transport Policy by the MoIT, revision of the Standard Operating Procedures for Telecommunication Services During Disasters in Bhutan by the Government Technology Agency, and draft amendments of the National Disaster Management Act by the Ministry of Home Affairs.

With monetary help from GFDRR, a World Bank-led Crisis Preparedness Gap Analysis in 2024 recognized essential areas for reform and knowledgeable the design of the most recent Cat DDO.

These reforms mirror a shift from reactive response to proactive planning—transferring Bhutan nearer to a whole-of-government resilience technique.

More Than Financing: A Model for Long-Term Reform

What units Bhutan aside is not only its uptake of monetary devices just like the Cat DDO, however its dedication to embedding resilience in coverage, planning, and observe. These efforts will not be one-off reforms—they’re a part of a long-term, evolving structure of resilience.

“This partnership is about more than access to funds—it’s about building the systems, institutions, and culture that allow a country to withstand shocks and continue to grow,” mentioned Cecile Fruman, World Bank Acting Country Director for Bhutan.

A Vision for the Next Decade

As local weather dangers intensify, Bhutan’s expertise affords classes for different small and weak states. It reveals how sustained dedication, paired with strategic partnerships, can create a resilient improvement trajectory.

The World Bank, GFDRR, and CIF stay dedicated to supporting Bhutan on this journey. Together, we’re not solely financing resilience—we’re co-creating a blueprint for future-ready nations.