Second Panama Disaster Risk Management Development Policy Loan with a CAT DDO

The development objectives of the Second Panama Disaster Risk Management Development Policy Loan in Panama enhance the Government of Panama's technical and institutional capacity to manage the disaster risk resulting from the occurrence of natural and health-related hazards, including the adverse effects of climate change and disease outbreaks. The Government of Panama has adopted the Strategic Framework for the Financial Management of Disaster Risk (2014) to identify, manage and prevent fiscal risk in the event of disasters related to the impact of natural hazards or economic shocks, thus enabling the identification of Theme Areas to reduce the risks of said disasters or hazards. This Strategic Framework focuses on five Strategic Pillars: (i) identification, quantification, and understanding of fiscal risk due to disasters; (ii) incorporation of disaster risk analysis in the planning of public investment; (iii) formulation of components for developing and implementing risk retention and transfer instruments; (iv) development of the domestic insurance market; and (v) strengthening of the State Directorate of Investment, Concessions, and Risks, so it can fulfill its role in designing and implementing financial protection strategies. The National Government is committed to three (3) Policy Areas, including the following Priority Actions associated with disaster risk and climate change. Policy Area 1, strengthening the institutional framework for management and response to the impact of climate and disaster risk in a post-COVID context; Policy Area 2, strengthening climate risk hazards identification and disaster risk assessment capabilities and Policy Area 3, development of territorial responsibilities for disaster risk management.