The Bhutanese Leading the way.
Bhutan has not yet tapped into the USD 40 million (mn) disaster resilience fund approved by the World Bank in December 2024, but the government says the money remains a critical line of defense against future climate and health emergencies.
The financing, formally known as the Climate and Disaster Resilience Development Policy Financing with a Catastrophe Deferred Drawdown Option (Cat DDO), became effective in February 2025. It is structured to provide the Royal Government of Bhutan with immediate financial access in the wake of a major disaster, such as an earthquake, flood, or disease outbreak.
The Finance Minister, Lekey Dorji, confirmed that no funds have been drawn so far, as no qualifying disaster has occurred. “This is not a regular budgetary fund. It is a shield we keep ready for uncertain times,” he said. “It ensures that when a real crisis hits, we won’t waste time looking for resources, we’ll already have them.”
The Cat DDO allows disbursement under specific conditions, such as a formal disaster declaration under the Disaster Management Act or a declaration by the Prime Minister in his role as Chairperson of the National Disaster Management Authority (NDMA).
The fund remains fully intact, with a three-year drawdown window that can be extended once, allowing up to six years of standby availability.
While no funds have yet been utilized, the financing supports Bhutan’s broader disaster preparedness strategy. It complements ongoing national efforts to strengthen early warning systems, climate-resilient infrastructure, and local-level emergency response planning.
In a region increasingly exposed to climate-related hazards, the fund represents a vital financial safeguard. As Lyonpo Lekey Dorji put it, “We may not have needed it yet, and we hope we never will, but its presence gives us confidence and readiness in an unpredictable world.”
