Across Latin America and the Caribbean, a single climate phenomenon is leaving a starkly uneven trail of disruption in 2024, highlighting the urgent need for context-specific, proactive planning rather than reactive crisis management.
In Colombia’s capital Bogotá, the main water supply system that meets 70% of the city’s demand dropped to just 16% of its total capacity in April 2024, forcing city officials to implement strict water rationing for millions of residents. Just one month later, the government of Grenada declared a national-level water emergency after prolonged, El Niño-driven drought pushed reservoir levels to historic lows, triggering widespread water usage restrictions across the island nation. Further north in Panama, extended dry conditions forced canal authorities to cut the number of daily transits through the Panama Canal — one of the world’s most critical global trade arteries — from 36 to just 22, threatening to slow global supply chains. Meanwhile, Ecuador faced the opposite extreme: between December 2023 and March 2024, heavy El Niño-linked rainfall impacted roughly 160,000 people and damaged more than 35,000 residential structures, leaving widespread destruction in its wake. These four distinct cases from a single climate event make clear that El Niño’s impacts are far from uniform.
For decades, public discussion of El Niño has centered on its association with reduced rainfall and extended droughts. But modern climate data and on-the-ground impacts prove that its effects are far more varied: while it amplifies drought risk in some geographic zones, it delivers extreme precipitation and catastrophic flooding in others. This uneven impact underscores a critical reality: there is no universal, one-size-fits-all solution to El Niño-related threats. Response strategies must be tailored to the unique vulnerabilities and needs of each territory.
This lesson grows increasingly urgent as the 2024 El Niño event continues to intensify across the Pacific basin. The World Meteorological Organization projects the event will reach its peak strength in December 2024, and preliminary data suggests it could rank among the most intense El Niño events recorded in the last century. For millions of people and vulnerable communities already grappling with ongoing economic and climate stress, this event poses a significant threat to public well-being and long-term livelihoods.
The consequences of this event extend far beyond immediate emergency situations. Both water scarcity from drought and structural damage from flooding disrupt access to core essential services, from potable drinking water to electrical power, while elevating risks to public health and regional food security. These immediate impacts can then compound into broader systemic challenges: agricultural, livestock and fisheries production losses, widespread damage to critical public and private infrastructure, prolonged global supply chain disruptions, and upward pressure on consumer prices that hits low-income households hardest. Left unaddressed, a climate threat of this scale can escalate into a full-blown economic, social and fiscal crisis across the region.
Against this backdrop, leaders across Latin America and the Caribbean have a dual opportunity: prepare to confront the immediate impacts of the current event, and most importantly, invest in preemptive action to reduce risk for future events. To support this shift from reaction to prevention, CAF – Development Bank of Latin America and the Caribbean has approved an initial $1 billion financing package to help regional nations strengthen preparedness and response capacity ahead of the 2026–2027 El Niño event.
These funds will not only address the most urgent immediate needs of affected countries, but also advance long-term climate resilience priorities that break a long-standing cycle of disaster management. For generations, the region has followed a repetitive pattern: respond to the active emergency, rebuild what was destroyed, recover what can be salvaged, and wait for the next disaster to strike. CAF is working to help regional governments break this harmful cycle through a combination of targeted financing, institutional capacity building, and cross-regional coordination that complements the work of individual national governments.
This institutional commitment is already moving from planning to concrete action. During the third edition of the International Economic Forum – Latin America and the Caribbean, scheduled to take place in Panama on January 27 and 28, 2027, CAF will convene the first ever Meeting of Ministers of Economy of Latin America and the Caribbean, focused specifically on disaster risk financing and strengthening national fiscal institutions to manage climate shocks. The gathering will create a dedicated space to address the unique challenges posed by variable climate phenomena like El Niño, share cross-national lessons and experiences, and advance policy and financing tools that help countries anticipate, manage and transfer climate risk, protect national public finances, and respond more effectively to future emergencies.
In addition to the ministerial meeting, CAF will develop a targeted white paper outlining context-specific recommendations and proven good practices that account for the diverse territorial and climate realities across the region. This work will be paired with the development of practical climate risk management tools, targeted technical assistance programs, and cross-border information and knowledge sharing mechanisms that connect national governments and regional institutions. The core challenge of this work is turning accumulated climate knowledge into actionable policy decisions, and turning those decisions into effective, on-the-ground capacity to protect people, national economies and vulnerable territories.
El Niño will continue to manifest in many different forms across the region, from crippling drought to catastrophic flooding. As such, our collective response must be equally diverse and adaptable. The ultimate goal is to stop predictable climate threats from repeatedly erasing decades of development progress across Latin America and the Caribbean. To achieve that goal, CAF is supporting regional action through targeted financing, shared climate knowledge and tangible, on-the-ground action.