Mexico, Colombia, Chile and Peru plan to work with the World Bank to launch a new bond to cover losses in the event of extreme weather, Peru’s finance minister said on Friday, reports Trend citing to Reuters.
The bond would be similar to a $1.36 billion earthquake bond that the four countries sold last year through the Pacific Alliance regional bloc they are part of, said the minister, Carlos Oliva.
“What we’re going to do is design a new bond that’s not just for earthquakes, but for hydrometeorological events, climate, the el Nino phenomena,” Oliva told Reuters on the sidelines of an event at the Pacific Alliance summit Peru hosts this week.
Oliva said it was too early to estimate a pricetag for the bond but added it “has to be similar” to the earthquake bond.
“The model for doing this takes time and the World Bank is helping us with that,” he said.