CAF, the Development Bank of Latin America and the Caribbean, will initially allocate US$1 billion to help the region’s most vulnerable populations prepare for and respond to emergencies linked to a potential “Super El Niño” in 2026–2027.
The institution said the climate event could be exceptionally intense and have significant economic and social consequences, including droughts, extreme heat, flooding and heavy rainfall across different countries.
According to scientific estimates cited by CAF, the phenomenon could generate losses equivalent to 2% of regional GDP and push an additional 4.8 million people into poverty. Agriculture, livestock and fisheries could face losses, while damage to infrastructure, supply-chain disruptions and higher prices could further affect economic activity.
CAF Executive President Sergio Díaz-Granados said the institution is making the initial funding available to help governments anticipate risks, protect vulnerable populations and respond to emergencies.
The bank will work with national and local governments, development banks and other stakeholders to strengthen preparedness and emergency response.
As part of the initiative, CAF will convene the first Meeting of Ministers of Economy of Latin America and the Caribbean on the Financial Management of Natural Risks in Panama on January 27–28, 2027. The meeting will focus on the financial challenges posed by natural disasters and the exchange of best practices.
CAF also plans to develop a White Paper on emergency response best practices and launch technical assistance programs to help countries improve their preparedness and response capabilities.
