Nepal, World Bank explore earthquake catastrophe bond

Nepal and the World Bank have signed an agreement to assess whether a catastrophe bond could give the country faster access to funds after a major earthquake. The World Bank Group Treasury will work with Nepal and market participants to study the bond’s feasibility and potential structure; no bond has been issued, and its terms and payout triggers have not been determined. The proposed instrument could transfer some disaster risk to investors and complement Nepal’s broader preparedness and recovery efforts. The agreement follows devastating August floods that killed nearly 1,500 people and caused an estimated $1.66 billion in physical damage, underscoring the country’s exposure to natural disasters.