Colombia has one of the highest rates of disasters caused by natural and climate-induced hazards in the Latin America and Caribbean region, ranging from recurrent floods and landslides to earthquakes and volcanic eruptions. Disasters cause, on average, 160 deaths and destroy 2,800 houses every year in Colombia, mostly impacting the poorest and most vulnerable, and their large economic impacts negatively affect the country’s economic development. In particular, the impacts of the 2010-2011 La Niña phenomenon showcased the country’s vulnerabilities around increased development in areas exposed to natural hazards, inadequate land use management and housing construction standards, and the need to strengthen the institutional DRMframework to reduce existing risks across sectors and subnational territories.
As a Catastrophe Deferred Drawdown Option (Cat DDO), the contingent credit embedded in the project provided the Government with quick liquidity in response to a disaster, in this case, the COVID-19 pandemic. In addition, the project sought to strengthen the Government public policy program for reducing risks resulting from adverse natural events. Through the project, the World Bank promoted coordination among national, regional, and local government levels to manage risks more efficiently, and strengthened the role of the Ministry of Finance and Public Credit (MHCP) around the fiscal management of disasters. In parallel, the World Bank provided analytical and advisory support funded by the Global Facility for Disaster Reduction and Recovery (GFDRR), which increased the government’s capacity to implement the reform program and achieve the desired results. These activities supported the integration of risk information into development planning, municipal land use and watershed management, and the first municipal infrastructure plan against seismic risk for schools in Cali under the Bank’s Global Program for Safer Schools.
The project achieved results by (a) providing quick financing following a national disaster declaration, while (b) supporting key policy reforms that strengthened Colombia’s resilience to disaster and climate risk and maintained its regional leadership in the field. When the national emergency was declared in March 2020 at the start of the COVID-19 pandemic, the operation disbursed $250 million to support the Government’s response and recovery efforts. The resources provided fiscal relief in the face of declining revenues and higher spending on public health and social protection programs as the COVID-19 crisis wiped out all gains in poverty reduction realized over the preceding decade as poverty increased from 35.7 percent in 2019 to 42.5 percent in 2020.
Moreover, the policy reforms promoted by the project contributed to reducing physical risks and strengthening fiscal resilience to safeguard development and protect vulnerable populations against the growing impacts of disasters and climate change. Key results achieved during 2012-2021 included strengthening of DRM institutional and planning capacity through the:
· Development of the National DRM Plan, defining clear actions, responsibilities and budgets of relevant government entities, and the National Strategy for Emergency Response (ENRE) by the National DRM Unit (UNGRD).
· Development of the Strategic Plan for International Cooperation, regulation of the National DRM Fund, and regulation for the national DRM law to guide preparation of DRM plans through the public and private sector.
· Development of the Programmatic Component of the National DRM Plan and five emergency protocols updated under the ENRE framework, which were effectively implemented in response to Tropical Storms Eta and Iota in 2020; the Environmental Damage, Loss, and Needs Assessment Methodology, which provides relevant information for the establishment of necessary measures to rehabilitate, recover or restore ecosystems, was developed and implemented.
· At the subnational level, the project contributed to saving lives, protecting the assets of vulnerable populations, strengthening resilience, and generating positive social impacts. Out of the country’s total 1,123 municipalities, 1,054 municipalities developed local DRM plans; 144 municipalities updated their land use plans, incorporating a disaster risk component to guarantee safe construction and protection of areas of ecological fragility; 63 municipalities updated their watershed management plans to reduce risks and protect the integrity of local communities through participatory management; and 14 municipalities developed inventories of settlements located in high-risk areas; A total of 28 municipalities reported information on at least one settlement located in high-risk areas as part of the developed inventories. Moreover, to move from the incorporation of guidelines on municipal planning instruments to their implementation into investment projects, 10 departments implemented projects related to climate change adaptation and included risk understanding and risk reduction actions as part of their Territorial Climate Change Management Plans.
BANK GROUP CONTRIBUTION
The World Bank, through the International Bank for Reconstruction and Development (IBRD), provided a loan in the amount of $250 million. Additional resources ($350,000) for technical assistance were provided by GFDRR to fund the Safer Schools initiative in Cali.
The key partners for the success of this project were the leading implementing entities from the Government of Colombia, the Ministry of Finance and Public Credit and the Department of National Development, as well as the other entities responsible for results: the National DRM Agency, the Ministry of Environment and Sustainable Development, and the Ministry of Housing, City and Territory.
Building on the engagement and success achieved through the first and second Cat DDO projects, the third Cat DDO (US$300 million, approved in December 2021) supports additional reforms, including: strengthening integration of DRM and climate adaptation agendas; promoting financial protection mechanisms such as contingent liabilities and disaster risk financing strategies; supporting mainstreaming of disaster and climate risk into transport infrastructure and housing; promoting climate change mitigation through deforestation control, sustainable forestry management and the establishment of a national Green Bond Framework; and supporting planning at national and subnational levels to boost resilience against public health risks.