Managing Vulnerability to Natural Disasters and Financing in Costa Rica

1) Managing Vulnerability to Natural Disasters in Costa Rica Identifying risks The timing and financial impact of disasters is unpredictable. Unpredictable budgetary reallocations to address disaster Liquidity/ Cash- Flow Risk recovery can affect other, ongoing programs. Repayment schedule for disaster Cash-flow loans difficult to predict and plan Financial Solution Catastrophe Risk Deferred Drawdown Option (Cat DDO) for USD 65 million (0.25% of Costa Rica's 2007 GDP) may be disbursed (partially or in full) upon occurrence of a natural disaster that causes a declaration of state of emergency. Cat DDO will provide a source of bridge financing while other sources are being mobilized following a natural disaster. 00 8

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