The Government of Peru today approved a US$400 million contingent loan for natural disaster emergencies with the International Bank for Reconstruction and Development (IBRD).
The Supreme Decree 054-2015-EF states this is Peru’s Second Disaster Risk Management Development Policy Loan with a Catastrophe Deferred Drawdown Option (CAT DDO).
The three-year drawdown period may be renewed up to four times, for a maximum of 15 years in total. Term loan will be repayable in consecutive and equal (if possible) half yearly installments.
In addition, there is a financing fee of 0.50% and a renewal fee of 0.25% on the loan amount.
The document also authorizes the Ministry of Economy and Finance to use currency conversion and interest rate Conversion, as well as limit the variable rate.
The Development Policy Loan with a Catastrophe Deferred Drawdown Option (CAT DDO) is a contingent credit line that provides immediate liquidity to IBRD member countries in the aftermath of a natural disaster.
It is part of a broad spectrum of risk financing instruments available from the World Bank Group to help borrowers plan efficient responses to natural disasters.
(END) JCC/JCC/RMB
Published: 3/21/2015