Kathmandu, Oct 15: Nepal and the International Bank for Reconstruction and Development (IBRD), part of the World Bank Group, have signed a mandate agreement to explore the development of a catastrophe bond that could help the Himalayan nation secure rapid access to funds in the event of a major natural disaster.

The agreement marks the beginning of a collaboration to assess the feasibility and potential structure of a catastrophe bond, under which Nepal could transfer part of its disaster risk to international capital markets and strengthen its financial preparedness for natural disasters, the World Bank said in a statement.

Under the agreement, the World Bank Group Treasury will work with the Nepal government and market participants to evaluate the proposed transaction.

The initiative comes as Nepal seeks to strengthen its capacity to prepare for, withstand and recover from natural disasters in the wake of devastating floods in the Bhotekoshi and downstream Trishuli river basins on August 26. The floods have killed nearly 1,500 people, while more than 5,000 remain unaccounted for, according to the National Disaster Risk Reduction and Management Authority.

Triggered by an avalanche near the Nepal-China border that blocked the river’s flow, the floods swept away several human settlements, a dozen hydropower projects, a solar plant, and several roads and bridges. Physical damage is estimated at 1.66 billion US dollars, according to the World Bank’s Global Rapid Post-Disaster Damage Estimation report.

According to the World Bank, Nepal is highly vulnerable to earthquakes, floods, landslides and other climate-related hazards, which can cause extensive damage to infrastructure, disrupt economic activities and place considerable pressure on public finances.

A catastrophe bond is a financial instrument that allows governments or other entities to transfer specific disaster risks to investors. Depending on the terms of the bond, investors may lose some or all of their principal if a specified disaster occurs, allowing the funds to be used to support the affected entity.

“Such instruments can provide an alternative source of disaster financing, potentially enabling governments to access funds more quickly than relying solely on budget reallocations or post-disaster assistance,” the World Bank said.

The initiative is part of the World Bank Group’s established catastrophe bond programme, which has helped countries access international capital markets to transfer disaster risks and secure financial protection against natural hazards.

The World Bank helps countries increase their financial resilience to disasters by supporting disaster risk financing programmes and offering contingent financing and insurance solutions.

It also assists countries in designing, developing and implementing comprehensive disaster risk financing strategies.

“A risk financing strategy helps clients determine a balance between retaining risk, for example, through a contingent financing product, and transferring risk, for example, through an insurance product,” the World Bank said.

A range of financial products can be used to address the financial risks of disasters, and the optimal mix of approaches depends on the types of risks faced by a country and the frequency and severity of disaster events, it said.

Developing countries are particularly vulnerable to the economic and fiscal consequences of disasters because of factors such as gaps in insurance coverage, inadequate infrastructure resilience, and the concentration of populations and economic activities in exposed areas.

“Following a major disaster, governments often have to redirect budgetary resources towards emergency response, relief and reconstruction, potentially affecting other development priorities,” the World Bank said.

New Delhi, Oct 15: The Ministry of Defence on Thursday said it has signed contracts worth Rs 4,106 crore for the acquisition of a dedicated communication satellite capability for the Indian Air Force, and Varunastra heavy-weight torpedoes for the Indian Navy.

Both contracts mark a significant step towards advancing the development of domestic defence manufacturing capabilities while promoting self-reliance in critical technologies in line with the government’s ‘Aatmanirbhar Bharat’ and ‘Make-in-India’ vision.

The contract for the GSAT-7C satellite, valued at Rs 2,563 crore, was signed with New Space India Limited, Bengaluru.

According to an official statement, this indigenously designed, developed and manufactured satellite will enhance the secure, resilient and seamless communication capabilities for the assets of the Indian Air Force, thereby strengthening operational effectiveness.

Meanwhile, the contract for Varunastra, worth Rs 1,543 crore, was signed with Bharat Dynamics Limited, Hyderabad.

Varunastra is an indigenous ship-launched anti-submarine torpedo developed by the Naval Science and Technological Laboratory.

“Equipped with advanced manoeuvring capabilities, it is capable of engaging enemy submarines at long ranges, thereby enhancing the anti-submarine warfare capability of the Indian Navy,” said the statement.

Earlier this month, the Ministry of Defence signed a Rs 661.50 crore deal with BrahMos Aerospace Private Limited for the procurement of BrahMos fire control system and launchers for Indian Navy ships under the Buy (Indian-IDDM) category.

With a minimum of 68 per cent indigenous content, the project encourages active participation of various Indian industries, including MSMEs (micro, small and medium enterprises) in the supply chain. The project will generate employment over a period of three years.

It also bolsters India’s maritime security architecture and defence capabilities and marks a critical milestone in the ongoing efforts to indigenise advanced military technology, according to the Defence Ministry statement.

The BrahMos System fitted on board various frontline warships is the Indian Navy’s primary Surface-to-Surface Missile (SSM) system for maritime strike operations. The weapon system is capable of targeting land and sea targets from extended ranges with pinpoint accuracy at supersonic speed.

Mumbai, Oct 15: Domestic equity benchmarks opened higher on Thursday, defying fragile sentiment amid weakness in technology stocks across the US and Asian markets.

Sensex opened at 72,965.80, up 183.91 points or 0.25 per cent, while Nifty started at 22,671.30, up 48.60 points or 0.21 per cent.

In early trade, sectoral performance was mixed. Nifty IT, Nifty FMCG, Nifty Auto and Nifty Private Bank were top gainers and increased up to almost 2 per cent.

On the other hand, Nifty Metal was the top laggard which declined 1 per cent. Similarly, PSU bank, consumer durables, pharmaceuticals and healthcare indices were traded lower.

Market experts said hotter-than-expected US inflation — which spiked to 3.7 per cent in September from 3.4 per cent in August — has increased the possibility of another rate hike by the US Federal Reserve in October.

The concern triggered big selling in US markets, with tech-heavy Nasdaq correcting 1.88 per cent, they added.

“The fear has spread to South Korea and Japan. Nikkei is down above 4 per cent and Kospi down more than 7 per cent. From the Indian market perspective, the correction in AI stocks is a positive,” according to the experts.

FIIs who have been selling Indian stocks and buying AI stocks will halt this trend.

Technically, Nifty formed a bearish-leaning candle, while RSI stood at 41.66, above its average of 32.01, indicating some recovery in momentum, according to analysts.

On Wednesday, FIIs remained net sellers and offloaded equities worth approximately Rs 1,857 crore, while DIIs provided strong support with net purchases of around Rs 2,670 crore.

Additionally, Wall Street ended lower on Wednesday as US inflation fueled rate-hike concerns, weighing on the Nasdaq and AI. Asian markets were also trading in red zone.

In addition, crude oil prices declined nearly 2 per cent as investors weighed Strait of Hormuz supply risks against US moves to ease shipping costs.