Over the past decade, the Royal Government of Bhutan has spent approximately Nu 4 billion on disaster-related relief, response, and restoration efforts, according to data shared by the Ministry of Finance. The information was presented by Finance Minister Lekey Dorji during a Meet-the-Press event yesterday (November 28, 20250, who noted that the country’s disaster-related expenditure averages around Nu 300 million annually.
The minister emphasized that these costs are predominantly financed through domestic resources, reflecting Bhutan’s strong reliance on its own budget to manage the impacts of disasters. “Disaster restoration and response financing is largely borne by the Royal Government of Bhutan and Bhutanese taxpayers,” he stated, highlighting the financial strain placed on national resources.
While Bhutan does receive some external support, the Minister explained that most international assistance is directed toward climate mitigation and adaptation initiatives, rather than immediate disaster relief or recovery from loss and damage. “Partnerships with countries like India, multilateral agencies, and global climate finance mechanisms generally focus on programmes such as renewable energy, watershed management, community resilience, and green growth,” he said. “This means that resources for disaster response and recovery remain limited, leaving Bhutan to shoulder a significant portion of the financial burden from domestic budgets.”
With the increasing frequency and intensity of climate-induced disasters, this reliance on domestic financing has become more pronounced. Bhutan, which is among the lowest contributors to global greenhouse gas emissions, faces disproportionately high costs to protect lives, infrastructure, and livelihoods from natural hazards. Minister Dorji stressed that enhancing access to global mechanisms for loss-and-damage financing is essential to alleviate the country’s financial pressure.
One example of external support came from the World Bank, which approved approximately US$ 40 million under the Climate and Disaster Resilience Development Policy Financing (DPF). This package includes a Catastrophe Deferred Drawdown Option (Cat DDO), designed to provide immediate liquidity following natural disasters or public health emergencies. Following the severe impacts of heavy rainfall on October 4th and 5th, 2025, Bhutan activated the Cat DDO, drawing down US$ 20.54 million (approximately Nu 1.8 billion) to support emergency response efforts. The remaining funds under the Cat DDO will remain accessible for future disasters, with a drawdown period of three years, extendable once to a total of six years.
Lyonpo Lekey also highlighted that while external mitigation and adaptation funding has been substantial, support for direct disaster response and recovery remains inadequate. “To protect our citizens and ensure the resilience of our communities, it is critical that Bhutan secures more dedicated international financing for disaster relief and loss-and-damage recovery,” he said. “Without such support, the burden falls disproportionately on our national budget and taxpayers, limiting our capacity to respond effectively to future disasters.”
The Ministry of Finance’s disclosure underscores the urgent need for enhanced global cooperation and innovative financing mechanisms to help Bhutan manage the rising costs of climate-related disasters, safeguard vulnerable communities, and strengthen national disaster preparedness for years to come.
Nidup Lhamo
FromThimphu
