The Global Risk Financing Facility will finance mechanisms such as national disaster insurance programmes to channel money to countries affected by disasters.
Over time, the Facility will seek to address a wider range of crises, such as humanitarian emergencies.
12 October 2018: The World Bank Group and the Governments of Germany and the UK, with support from representatives of the Vulnerable Twenty Group (V20), have launched a US$145 million Global Risk Financing Facility (GRiF) to help vulnerable countries manage the financial impacts of climate change and natural hazard-induced shocks.The Facility was announced at the World Bank and International Monetary Fund (IMF) Annual Meetings, which convened from 12-14 October 2018, in Bali, Indonesia.
Over the next five years, the GRiF will provide financing to set up mechanisms such as national disaster insurance programmes to channel money to those affected by disasters. According to World Bank CEO Kristalina Georgieva, up to 26 million people each year are forced into poverty as a result of natural disasters.
Up to 26 million people each year are forced into poverty as a result of natural disasters.
The GRiF will also, inter alia:
- Provide technical assistance to develop, test, scale up and improve on financial solutions;
- Strengthen the financial resilience of vulnerable countries by enabling earlier and more reliable response and recovery by establishing or scaling up pre-arranged risk financing instruments, including market-based ones like insurance;
- Create incentives for disaster prevention, preparedness, response and resilient reconstruction;
- Scale up existing and pilot new risk pooling mechanisms;
- Test insurance premium financing for the poorest countries;
- Explore new types of contingent financing to complement insurance;
- Explore new financial structures, linking risk financing directly to disaster preparedness plans or to financing for resilient infrastructure; and
- Seek to address a wider range of crises, such as humanitarian emergencies, over time.
The GRiF aims to: build on participatory approaches in preparing investments; incorporate gender, disability, age and other social vulnerabilities in designing financial instruments; harness sustainable private sector solutions for risk financing; and partner with regional catastrophe risk pools. The facility will contribute to the goals of the InsuResilience Global Partnership for Climate and Disaster Risk Finance and Insurance Solutions, which aims to strengthen the resilience of developing countries and protect the poorest and most vulnerable from the impacts of disasters.
The GRiF is supported by the German Federal Ministry for Economic Cooperation and Development (BMZ) and the UK Department for International Development (DFID), and is jointly managed by the World Bank’s Disaster Risk Financing and Insurance Program (DRFIP) and the Global Facility for Disaster Reduction and Recovery (GFDRR). [GRiF Brief] [World Bank Press Release] [SDG Knowledge Hub Story on Higher Ambition Phase of InsuResilience Global Partnership]