Frank and insightful conversations characterized the Round Table, with participation from the Green Climate Fund´s Senior Climate Information and EWS Specialist Joseph Intsiful, the World Bank´s Financial Sector Specialist, Sumati Rajput, and regional colleagues Davide Zappa from DG ECHO, Catherine Jones of FAO, and Raymond Zingg of IFRC. The panel explored how innovative risk financing models allow humanitarian actors and governments to become proactive risk managers and strengthen the Anticipatory Action approach.

Davide Zappa shared two key learnings that DG ECHO gathered through partner operations in the Asia-Pacific region. 1.) While the evidence base in Asia-Pacific expands, we must do more collectively to enhance comparability of metrics, methodologies and reduce fragmentation of our narrative. This is especially true for urban settings and situations of conflict or displacement. This is why DG ECHO invests to enable better measurement of preparedness for protection outcomes. 2.) As anticipatory actions expand at the country level, we must continue focusing on what works and what doesn’t. This means, coordinating effectively to support uptake by national governments, nationally owned approaches, embedded in national risk governance and DRM frameworks, policies and legislation. With limited humanitarian financing, we must remain focused on innovating and reaching those who are most vulnerable. Davide highlighted the success of the DG ECHO-funded Moving Urban Poor Communities Towards Resilience Project in the Philippines with the Department of the Interior and Local Government’s Local Government Academy, mandated to capacitate Local Government Units (LGUs). By strengthening the LGU training curriculum, Shock Responsive Social Protection local level uptake increased in non-project targeted municipalities in eastern Samar province, enabling LGUs to allocate resources from their own DRRM Fund to better prepare for and act early ahead of shocks.

It was wonderful to see Joseph Intsifu represent the Green Climate Fund (GCF) and explain the GCF’s key investments in the Asia-Pacific region and how the Fund uses financial instruments, such as grants, to encourage innovation, loans for the private sector, or provision of guarantees. Opening with an impressive investment of over 3.2 billion USD to build a resilience for over 500 million people globally, Mr Intsifu elaborated on the challenges encountered arising from a lack of an enabling environment: insufficient infrastructure; uncoordinated and limited government financing; market barriers for the private sector to participate. However, the paradigm shift towards more systematic anticipatory action has been achieved through predictable investment, as well as short- and long-term interventions. The GCF sees a great number of critical drivers of this paradigm shift towards anticipatory action, such as investments in early warning communication and coordination mechanisms among actors, scaling up AA at multiple dimensions and the mobilisation of additional funds and insurance schemes.

Sumati Rajput explained how the Word Bank (WB) assists in designing, developing, and executing disaster risk financing instruments and strategies. She pointed out that there is no single financial solution, therefore the WB helps countries through its support services to strike a balance between retaining the financial risks (e.g. through a contingent fund) arising from a potential disaster and transferring risk (e.g. through insurance solutions). Examples of challenges and support from the WB include: 1.) The complex process of developing and implementing Disaster Risk Financing (DRF) instruments where data quality is an issue. The WB leverages its network and partnered, for instance, with the European Space Agency to help develop and improve DRF instruments. 2.) The need for an overarching structure to be embedded in comprehensive risk financing strategies as well as a delivery mechanism in order for financial solutions to work effectively. In Indonesia, the WB supported the development of a DRF fund by providing seed funding and technical assistance to shape the rules of the game, i.e., clarifying who can access funds, and developing processes and protocols. 3.) The WB also works with a number of governments to address capacity constraints, through the Global Risk Financing Facility (GRIF). In Jamaica, the WB supported the development of a catastrophe bond that will provide the government with financial protection. Sumati also explained where the WB brings together risk reduction with risk financing. Working alongside the DRM community, risk reduction principles are also applied in social protection and infrastructure systems, e.g., a $90 Mio program project in Mozambique with two pillars focusing on DRR activities and two pillars on risk financing. The DRF component focuses on developing contingency funds & insurance, noting the challenge of making shock-responsive systems because it means you use the same (social protection) system already serving chronic caseloads to scale up social safety nets for “new poor”.
On how the Bank approaches financial planning for anticipatory shocks and crises, with humanitarian actors playing an important role in financing within the AA space, Sumati highlighted the WB’s support to Start Network´s Start Financing Facility, as well as a joint feasibility study with IFRC to explore insuring the Philippine Red Cross through the Southeast Asian Disaster Risk Insurance Facility (SEADRIF), a regional risk pool set up by Southeast Asian countries with support form the WB. Sumati stressed that there is space for joint exploration as there is a lot the WB can learn from the humanitarian work on early action planning.