World Bank, Caribbean Nations to Discuss Fund to Insure Against Natural Disaster

February 27, 2007

The World Bank and Caribbean nations are exploring the creation of a new fund to insure island nations against hurricanes and other natural disasters.

Representatives from 18 Caribbean countries gathered Monday in Washington to discuss the bank’s first program to offer the insurance, which would provide countries with immediate liquidity in the event of a natural disaster.

Each participating country will pay $1 million (euro760,000) annually in exchange for up to $30 million (euro22.8 million) in coverage, according to World Bank officials.

The International Development Association, the bank’s low-interest lending arm, has pledged $27 million (euro20.5 million) in funding. But another $30 million (euro23 million) is needed to get the program going.

The World Bank hopes to collect some $50 million (euro38 million) from donors, including the European Union, France and Canada, which will send representatives to the conference. World Bank President Paul Wolfowitz will preside over the talks.

The bank aims to make the insurance available for the upcoming hurricane season, which starts in June.

The program will serve as a model that could be used in other regions with small countries, said Caroline Anstey, the bank’s director for the Caribbean.

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