The SDG Knowledge Hub of the International Institute for Sustainable Development (IISD) provides the August update on global developments in climate adaptation finance.
Climate Adaptation Finance Update: Philippines Pioneers Catastrophe Risk Insurance
During the month of August, multilateral development banks (MDBs) and funds reported on new financing for projects that will support resilience in agriculture and forests in India and Angola. The Philippines launched a public catastrophe risk insurance programme as part of the country’s national disaster risk finance strategy. The European Bank for Reconstruction and Development (EBRD) reported on progress under a programme that provides micro-financing to climate resilience technology implementation in Tajikistan.
The World Bank and the Government of India signed two agreements in the area of climate resilience. A US$25 million grant from the Global Environment Facility (GEF) will support improving forest quality and sustainable land management in an area totaling 75,000 hectares. The beneficiaries are forest-dependent communities in climate-vulnerable areas of two Indian states. Also, a US$100 million loan from the World Bank will go towards improving the livelihoods and incomes of more than 200,000 highly climate-vulnerable farmers in the state of Jharkhand through the implementation of climate-resilient agricultural practices, including diversification into high-yielding and climate-resilient varieties.
Angola and the International Fund for Agricultural Development (IFAD) signed a financing agreement, which includes a US$29 million loan from IFAD, for a project that will benefit 60,000 Angolan households practicing subsistence farming by disseminating information on improved agricultural practices through farmer field schools. The project aims to increase agricultural productivity, and will include an emphasis on climate-resilient agriculture.
The Philippines launched a catastrophe risk insurance programme for national and local government agencies, supported by a US$206 million reinsurance agreement with the World Bank. The programme builds on a multi-year partnership with the World Bank, which has included the preparation of a catastrophe risk model and a national disaster risk finance strategy. Housed under the Philippines’ Government Service Insurance System (GSIS), the programme will provide coverage for national assets in 25 provinces against losses from typhoons and earthquakes, which are estimated to cost the country US$3.5 billion per year. The World Bank will serve as an intermediary, transferring the risk to a panel of international reinsurers.
In project updates, the EBRD announced the addition of MDO Arvand, a Tajik micro-lending company, as the fourth partner in Climadapt, the Bank’s pilot programme for promoting climate change adaptation. The programme is currently being implemented in Tajikistan. As part of the partnership, MDO Arvand will receive a US$1 million loan from the EBRD and the Climate Investment Funds (CIF). To date, more than 2,000 micro-loans have been extended to Tajik borrowers through Climadapt for the implementation of climate resilience technologies, including drip irrigation, energy-efficient windows and solar panels.