The loan aims to fund a program that will financially insulate Morocco in the face of natural disasters such as flooding and earthquakes.
Rabat – The World Bank pledged to lend Morocco $275 million for a Disaster Risk Management Development Policy Loan. Yesterday, December 11, the World Bank officially approved the funding designed to support Morocco is developing its response to the impact of natural disasters and climate-related shocks.
The loan also aims to help Morocco to develop a Deferred Drawdown Option for Catastrophe Risks (Cat DDO) to manage the financial impact of natural disasters.
“The Cat DDO will support reforms designed to strengthen the financial, governance, and operational framework of the Solidarity Fund against Catastrophic Events,” according to a statement from the World Bank.
The World Bank’s Maghreb country director Jesko Hentschel outlined the project’s aim in a press release. “The Cat DDO aims to help Morocco develop a comprehensive framework for disaster risk management, building on a previous World Bank-supported program, the Integrated Disaster Risk Management and Resilience Program for Results.”
“Developing a comprehensive risk insurance is particularly critical for the vulnerable population whose livelihood can be threatened in the event of a natural disaster,” Hentschel explained.
The fund is “a critical tool which complements private insurance by providing compensation to the uninsured, such as the poor and most vulnerable.”
In order to insulate the country against the financial shock of natural disasters, the Cat DDO “makes use of sophisticated risk financing instruments to cover losses caused by extreme flooding and earthquakes,” the World Bank statement explains.
In practical terms, the program means that in the face of natural disasters such as flooding or earthquakes, Morocco’s government will have direct access to liquid funds to support rescue operations as well as emergency response.
Augustin Maria, Senior Urban Development Specialist and co-Task team leader explained that “The program will help the government’s understanding of the financial risks associated with natural disaster and also improve its knowledge of how to prevent these risks through better investment planning and more investment in risk reduction, preparedness, and financial protection.”
The program will also upgrade Morocco’s National Civil Protection system and launch a National Flood Risk Management Information System.
The approval of the loan comes after several months of trials for the Moroccan government, with four earthquakes hitting central Morocco in the space of two weeks after widespread flooding killed at least seven people.
An earthquake with a magnitude of 5.3 degrees on the Richter scale hit the province of Midelt, Central Morocco on Sunday, November 17. The first quake was quickly followed by three more earthquakes, with the most recent hitting Morocco on December 5.
Flooding ravaged the Moroccan countryside in late August and early September with heavy rainstorms hitting the province of Taroudant. The flood killed seven people including a 17-year-old when a river burst its banks, sweeping over a recently built football facility.
The flooding spread as far as Tata, 180km southeast of Taroudant, where local authorities evacuated 200 people from their homes in response to the floods.