Bhutan, one of the world’s most climate-vulnerable countries, is advancing a comprehensive approach to disaster and climate risk management, integrating resilience into policies, institutions, and infrastructure. With a decade-long partnership with the World Bank, the country is building a model framework for preparedness and sustainable development.
In February 2025, Bhutan marked a significant milestone by signing a US$40 million IDA Climate and Disaster Resilience Development Policy Financing with a Catastrophe Deferred Drawdown Option (Cat DDO). This innovative instrument provides immediate access to funds following natural disasters or health emergencies, ensuring rapid response in times of crisis. Bhutan’s first Cat DDO, approved in 2020 for US$15 million, helped the country manage the COVID-19 pandemic swiftly, demonstrating the effectiveness of proactive financial instruments.
Over the past decade, Bhutan has faced multiple challenges, including severe flooding, rising glacial lake outburst risks, earthquake threats, and the impact of significant emigration on technical capacity. Despite these pressures, Bhutan has steadily advanced its 13th Five Year Plan priorities, embedding disaster and climate resilience across key sectors.
Through initiatives such as the Strengthening Risk Information for Resilience in Bhutan project, financed by the Climate Investment Funds (CIF) and the Global Facility for Disaster Reduction and Recovery (GFDRR), the World Bank has supported reforms across ministries, including Infrastructure and Transport, Home Affairs, and Finance. Efforts focus on integrating resilience into infrastructure, enhancing emergency preparedness, and improving financial readiness. Complementary reforms include updates to aviation and surface transport policies, telecommunication procedures during disasters, and amendments to the National Disaster Management Act.
What sets Bhutan apart is its commitment to systemic, long-term resilience. Beyond financing, the country is building institutions, policies, and practices that ensure it can withstand shocks while continuing to grow. Cecile Fruman, World Bank Acting Country Director for Bhutan, highlighted, “This partnership is about more than access to funds—it’s about building the systems, institutions, and culture that allow a country to withstand shocks and continue to grow.”
As climate risks intensify globally, Bhutan’s experience offers a blueprint for other small and vulnerable states. Through sustained national commitment and strategic partnerships, Bhutan demonstrates how proactive planning, innovative financing, and long-term reforms can create a resilient, future-ready nation.
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