The Development Bank of Latin America and the Caribbean (CAF) has established a financing line of up to one billion dollars for governments and development banks, with the aim of supporting prevention and response actions against the ravages of the climate phenomenon that threatens to extend until 2027 and affect millions of people.
The funds aim to protect the most vulnerable communities from extreme events ranging from severe droughts to torrential rainfall, enabling them to address emergencies and strengthen institutional response capacity throughout the geographic area.
Historical threat and alarming economic projections
Sergio Díaz-Granados, the financial institution's chief executive, warned that the current cycle has the potential to become the most severe of the last century, representing a latent danger to the livelihoods of millions of families and communities in complex situations.
For its part, the Economic Commission for Latin America and the Caribbean (ECLAC) estimated that the accumulated damage could subtract at least 2% from the regional Gross Domestic Product over three years, also pushing some 4,8 million inhabitants into poverty due to the associated economic and social collapse.
CAF projections point to strong repercussions in the agricultural, livestock and fishing sectors, accompanied by deterioration in key infrastructure works, blockages in supply chains and inflationary pressures on consumer prices.
Given this critical situation, financial institutions and local governments have these extraordinary resources available to anticipate damage and safeguard the economic and social stability of the affected populations.
