IBRD offers a line of disaster risk financing for direct budget support that provides varying levels of protection depending on the type, frequency, and severity of the event.

Weather hedges

Financial contracts based on an underlying weather index that transfer the risk to the financial markets.  Payments are triggered by adverse weather events according to pre-specified conditions (e.g. levels of rainfall, seasonal temperatures, etc.). IBRD offers intermediation services for index-based weather derivatives to both middle- and low-income countries.

Contingent financing

The Catastrophe Deferred Drawdown Option or Cat DDO provides countries with immediate access to financing following a natural disaster and the declaration of a state of emergency. Countries must have a disaster risk management framework in place.

Catastrophe bonds

Transfer the risk of a natural disaster to investors by allowing the issuer to not repay the bond principal if a major natural disaster occurs. IBRD has developed the MultiCat Program - a bond issuance platform - that transfers diversified risk to private investors.