Croatia has signed an agreement with the World Bank to strengthen the country’s disaster preparedness and overall resilience. The Disaster Preparedness and Resilience Development Policy Loan, combined with a Catastrophe Deferred Drawdown Option (Cat DDO), will allow the government to quickly mobilize resources to manage the fiscal and social impacts of disasters, facilitating faster emergency response and resilient recovery.
The country faces significant risks from earthquakes, floods, landslides, heatwaves, droughts, and wildfires, with average annual economic losses estimated at around 0.8% of GDP. The 2020 earthquakes caused damages and losses of approximately €16.1 billion, nearly a quarter of Croatia’s GDP. Strengthening financial and social protection measures is crucial to safeguard lives, livelihoods, and recent economic gains.
This initiative marks Croatia’s first Cat DDO. The program aims to reinforce disaster preparedness and resilience across three main pillars. It will enhance institutional capacity and infrastructure management, implement sectoral reforms in energy, tourism, and housing to boost renewable energy, promote resilient tourism investments, and ensure safety-focused building upgrades. Additionally, it encourages disaster insurance uptake and provides recovery support for vulnerable populations.
Croatia’s Deputy Prime Minister and Minister of Finance, Marko Primorac, emphasized that the €100 million loan equips the country with essential tools to manage fiscal impacts, strengthen institutions, upgrade infrastructure, and promote financial protection measures, ensuring safety and economic stability. World Bank Division Director Anna Akhalkatsi noted that the project enhances Croatia’s ability to respond to emergencies while safeguarding lives, jobs, and development gains.
The Cat DDO spans three years and provides contingent financing to complement budget reserves, serving as immediate liquidity and bridge funding during emergencies. As part of the World Bank’s Crisis Preparedness and Response Toolkit, it offers predictable contingency funds and aligns with the Country Partnership Framework for Croatia for FY25–FY30. The toolkit also includes the Rapid Response Option, which allows the repurposing of up to 10% of undisbursed funds from existing World Bank projects to meet urgent needs while long-term recovery efforts are implemented.
