Sustainable finance
Resilience Bond
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.
References
This reference provides supporting context for how “Resilience Bond” is defined and used.
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Overview
How it is used
The concept has been developed by re/insurers, public entities and resilience finance initiatives (such as the RE. bound programme); related instruments include resilience-linked loans and environmental impact bonds with outcome pricing.
Why it matters
Adaptation finance needs mechanisms that pay for prevention, not just recovery; resilience bonds are among the most concrete market designs for doing so.