Countries aim to work with the World Bank to launch a new bond to cover losses from El Niño and other extreme weather

A cow stands on land that used to be filled with water, at the Aculeo Lagoon in Paine, Chile January 9, 2019. REUTERS/Rodrigo Garrido

By Marco Aquino, Thomson Reuters Foundation

This article was originally posted by the Thomson Reuters Foundation

LIMA, July 5 (Reuters) – Mexico, Colombia, Chile and Peru plan to work with the World Bank to launch a new bond to cover losses in the event of extreme weather, Peru’s finance minister said on Friday.

The bond would be similar to a $1.36 billion earthquake bond that the four countries sold last year through the Pacific Alliance regional bloc they are part of, said the minister, Carlos Oliva.

“What we’re going to do is design a new bond that’s not just for earthquakes, but for hydrometeorological events, climate, the el Nino phenomena,” Oliva told Reuters on the sidelines of an event at the Pacific Alliance summit Peru hosts this week.

Oliva said it was too early to estimate a pricetag for the bond but added it “has to be similar” to the earthquake bond.

“The model for doing this takes time and the World Bank is helping us with that,” he said.

(Reporting By Marco Aquino, Writing By Mitra Taj; Editing by David Gregorio)