This “Super El Niño” is a test for climate finance
By Jorge Gastelumendi Thu, Aug 6, 2026
El Niño is here again, this time with a twist. This well-known weather phenomenon warms oceans, which in turn warms continents. It causes the Pacific jet stream to drive inland, bringing above average precipitation to the coasts while northern areas become drier and warmer than average.
This year, the El Niño may be something stronger, what is unofficially called a “Super El Niño.” A “Super El Niño” captures the rarer—and hotter—event when an El Niño raises water temperatures 2 degrees Celsius or more above the long-term average. This anticipated “Super El Niño” may be one of the first major climate stress tests of the world’s new resilience and climate finance architecture.
While El Niño is a naturally occurring phenomenon, climate change has amplified many of its impacts. From devastating floods and prolonged droughts to food insecurity and health emergencies, an El Niño can cost more to lives and livelihoods in this hotter climate.
However, the science gives us something rare but urgently needed: time. As was the case this year ahead of El Niño’s arrival in June, scientists can often forecast the phenomenon months in advance. They monitor changes in Pacific Ocean temperatures and atmospheric conditions. That means governments and financial institutions have an opportunity to act before disasters unfold rather than simply paying for the recovery afterward.
This is what makes it a human issue.
This is not just about weather patterns. Preparing for the increased risks of an El Niño year means protecting people before crises become catastrophes. Every delayed investment means more families losing livelihoods, more governments diverting scarce budgets to emergency response, and more development gains erased by disasters that were largely foreseeable.
What is El Niño?
According to the National Oceanic and Atmospheric Administration (NOAA), El Niño and La Niña are “opposing climate patterns.”
In a standard climate, trade winds—or winds that always blows from east to west near the equator—push warm water towards the western Pacific. Cold water then rises in a process called “upwelling” that creates a natural cooling process.
El Niño is characterized by weaker trade winds that increase the risk of flooding in regions closer to the equator and the risk of drought in regions farther from it, although the impacts vary. La Niña, in contrast, brings stronger trade winds and is associated lower average global temperatures compared to El Niño.
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Those at greatest risk are countries and communities with the fewest resources to prepare. Smallholder farmers, coastal populations, informal urban settlements, and small island developing states face disproportionate impacts despite contributing the least to climate change. Without timely support, one climate shock can trigger years of poverty, debt, displacement, and lost opportunity.
This is where multilateral development banks (MDBs) must lead. This “Super El Niño,” and the damage it is sure to cause, must trigger a shift from reactive disaster finance to anticipatory resilience finance.
MDBs should make seasonal climate forecasts a routine part of investment decisions. They must scale finance for early warning systems, resilient infrastructure, climate-smart agriculture, water security, and adaptive social protection. Every infrastructure loan and every country program should be screened against foreseeable climate risks. Resilience should become a core principle of development finance.
But prevention alone will not eliminate all losses.
Adaptation and preventative action can lessen the human and financial impacts. But climate change also comes with unavoidable costs triggered by historical emissions. So, despite the need for increased investments in adaptation, there are limits to what this can prevent. When those disasters happen, countries need rapid access to recovery finance.
The Fund for responding to loss and damage (FRLD) was established at COP27 in 2022 precisely for this purpose. Its effectiveness will depend on whether resources can reach vulnerable countries quickly, predictably, and at meaningful scale.
Recovery financing should help countries rebuild stronger without forcing them into deeper debt or sacrificing long-term development.
The solution is not to choose between preparedness and recovery. Instead, the solution is to connect them. Early warnings must trigger early financing. Prevention must reduce future losses. Loss and damage financing must help communities recover where prevention is no longer enough.
If governments and communities seize this moment, the next “Super El Niño” can be remembered as the moment when smarter financing stayed ahead of climate risk. MDBs have both the mandate and the balance sheets to lead this transition. The question is no longer whether we can anticipate the next climate shock. It is whether we will finance preparedness with the same urgency that we finance recovery.
Jorge Gastelumendi is the senior director of the Atlantic Council’s Climate Resilience Center. He formerly served as chief advisor and negotiator to the government of Peru, playing a critical role during the adoption of the Paris Agreement in the government’s dual role as president of COP20 and co-chair of the Green Climate Fund’s board.