ADB Issues First Disaster Response Bonds in Region

Tashkent, Uzbekistan (UzDaily.com) — The Asian Development Bank (ADB) has completed the first issuance of disaster response bonds (DRB), a financial instrument designed to provide rapid funding to countries in Central Asia following major natural disasters.

The new mechanism is part of a regional multi-layered disaster response financing program aimed at reducing the economic impact of earthquakes, floods and other climate-related shocks.

Funds raised through the issuance will support the Kyrgyz Republic and Tajikistan and will be deployed for rapid recovery efforts after emergencies.

According to ADB Vice President for Finance and Risk Management Roberta Casali, major natural disasters can significantly slow down national development. She said the new mechanism gives developing countries in the region access to fast and reliable financing, helping accelerate recovery and strengthen economic resilience.

The DRB structure provides immediate, targeted support after predefined events such as major earthquakes or floods. Disbursements are triggered based on independent parametric criteria and channelled through national social protection systems to assist affected populations, including the most vulnerable groups.

Under the transaction, three-year bonds of 80 million US dollars were issued for each country. The Kyrgyzstan and Tajikistan tranches carry coupon payments linked to the SOFR benchmark rate, plus a funding margin and risk premium. Maturity is set for 30 May 2029.

Aon Securities LLC acted as arranger of the issuance, while Munich Re served as structuring agent. Investor demand was distributed across Europe and the Americas, including specialist insurance funds, reinsurance companies and asset managers.

The instruments are listed on the Singapore Exchange and supported by several international finance programs, including the Asian Development Fund and regional climate initiatives. Preparation for the issuance involved an international consortium led by WTW under ADB technical assistance programs for Central Asia.

Financial institutions involved in the transaction noted strong investor interest in the new instrument, highlighting its role in transferring disaster-related risks from the public sector to private capital markets. ADB also emphasized that the mechanism ensures more targeted payouts through social systems, improving the efficiency of assistance delivery to affected populations.

Founded in 1966, the Asian Development Bank brings together 69 member countries and remains one of the key multilateral development institutions financing infrastructure and climate-related projects across the Asia-Pacific region.