Sustainable finance
Resilience Bond
A bond structure that finances risk-reduction projects by capturing the insurance savings from reduced expected losses.
Definition
A resilience bond is a financing structure — a variant of catastrophe bonds — in which a sponsor issues cat-bond coverage against disaster losses while simultaneously directing part of the structure's value (typically the insurance premium savings generated by risk reduction) into projects that reduce those risks: flood defences, fire-resistant construction, mangrove restoration. Lower risk lowers the bond's required coupon, monetising resilience investment upfront.
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