World Bank Supports Guatemala in Strengthening Resilience to Disasters and Extreme Climate Events

Washington D.C., September 25, 2025 - The World Bank's Executive Board approved today a project aimed at strengthening Guatemala's resilience to natural hazards and extreme climate events. This operation seeks to enhance institutional capacity to manage risks and protect the most vulnerable groups and their livelihoods, including women head of household, Indigenous peoples, persons with disabilities, and communities living in informal settlements.

Actions will focus on areas highly exposed to disasters, such as the Dry Corridor, Petén, and peripheral urban municipalities, where the combination of geographic risks and poverty levels increases people's vulnerability. This US$430 million Development Policy Loan with a Catastrophe Deferred Drawdown Option (Cat DDO) will enable the government to quickly mobilize resources following extreme events such as hurricanes, earthquakes, or volcanic eruptions, mitigating fiscal impacts and facilitating recovery.

The operation includes two key areas. The first aims to strengthen institutional capacity for disaster risk management through public policies and the creation of financial mechanisms that offer greater protection to vulnerable households. The second integrates resilience into sectors such as agriculture, transport, and housing, ensuring that critical infrastructure and basic services are better prepared for extreme events. For example, public entities are expected to incorporate risk management into their planning and budgeting, and the social protection system will be expanded to support households affected by sudden income losses.

"This operation strengthens the State's ability to respond swiftly to emergencies, protect fiscal stability, and ensure that public policies reach those who need them most. With this project, we reaffirm our commitment to building a safer, more equitable, and better-prepared country, where institutions can effectively respond to risks that affect the well-being of Guatemalan families," said Jonathan Menkos, Minister of Public Finance.

"This project is essential because it enhances Guatemala's capacity to respond quickly and effectively to disasters and external climate events, reducing the impact on all Guatemalan families, especially those living in poverty. It will provide the country with financial support to help guarantee basic services for the most affected populations," said Pierre Graftieaux, World Bank Resident Representative in Guatemala.

Guatemala is currently one of the countries most exposed to disasters in the world: more than 80% of its GDP is generated in risk zones, and nearly half of the population lives in poverty. Disasters exacerbate existing inequalities, disproportionately affecting women, children, persons with disabilities, and Indigenous communities. Between 1997 and 2014, 35% of the poorest households experienced disaster-related impacts, underscoring the urgency of continuing to strengthen national resilience.

The project was prepared with support from the Global Facility for Disaster Reduction and Recovery (GFDRR). It has a three-year duration, with the possibility of extension, and will support the country's efforts in disaster risk management, adaptation, and implementation of the Disaster Risk Financing Framework.

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