[COP27 Event Recap] A mix of policy reforms and customized financial instruments is key to effective and sustained financial protection

The World Bank Group's COP27 special event “Global Shield Financing Facility: Learning from country experiences to inform future opportunities” took place at the World Bank Pavilion at COP27 on November 9, 2022. The event was also broadcasted live virtually and hosted over 100 participants (in-person and virtually).

The event presented country projects supported by the Global Risk Financing Facility (GRIF) — the Horn of Africa (HoA) and Indonesia — and highlighted how these experiences and lessons learned inform the current discussion on a climate and disaster risk Global Shield to enhance financial protection for vulnerable countries.

Mari Pangestu (Managing Director of Development Policy and Partnership, World Bank Group) opened the event with an overview of the Global Risk Financing Facility (GRiF) and the key lessons learnt. "Over the last 4 years, GRiF has leveraged the World Bank’s long-standing country engagements to provide integrated financial support to vulnerable countries. It has allocated over 200 million in grants to over 18 countries in order to test and scale-up integrated financial protection solutions against disasters by leveraging World Bank operations,” she said. “Building on these lessons, we are honored to be working with Germany and the United Kingdom to transform the facility in alignment with the core objectives of the Global Shield. The new Global Shield Financing Facility will deliver coordinated, coherent, and sustained efforts to existing client countries and strengthen new partnerships with non-traditional partners such as risk pools and civil society organizations.”

The panel comprised Hon. Abdiqafar Hange (Deputy Minister of Finance, Somalia), Hope Murera (Managing Director, ZEP-RE [PTA Reinsurance Company: https://www.zep-re.com/]), Rita Helbra Tenrini (Fiscal Policy Agency, Ministry of Finance, Indonesia), and Dr. Heike Henn (Director for Climate, Energy and Environment, Federal Ministry for Economic Cooperation and Development [BMZ], Germany). Fiona Stewart (Lead Financial Sector Specialist, World Bank Group) moderated the discussion.

Key takeaways from Panelist Discussions:

• Hon. Abdiqafar Hange explained how the World Bank’s DRIVE project in the Horn of Africa provides a package of financial services to assist pastoralists build financial resilience. “We have built a comprehensive package of financial services that will protect pastoralists against droughts. Through a mix of insurance, savings, digital payment systems and financial literacy, they will be more drought-resilient in the future,” he said.
• Hope Murera spoke about the role of the private sector in de-risking, inclusion and value enhancement of pastoral economies  in the Horn of Africa project. “Leveraging markets to build a regional solution at scale is a key component to ensure the success of this innovative project,” she summed up.
• Rita Helbra Tenrini summarized the important disaster risk finance and insurance efforts of Indonesia. Currently, the country is establishing a central Pooling Fund for Disasters. The Fund will help ensure effective and transparent flow of money to relevant government agencies, including faster social assistance payments for victims of disasters, and improve preparedness planning. “The engagement and collaborative efforts of the government are crucial to fostering financial resilience in the face of natural disasters,” she pointed out. Of the predominant challenge, she highlighted a lack of disaster risk awareness and financial literacy and urged sub-regional governments to work on increasing the level of awareness among people.
• Dr. Heike Henn concluded the event by stressing the need for big programs like the new Global Shield Financing Facility, that integrate commitments from partner countries and policy dialogue to ensure more coherence in delivering pre-arranged financing on the ground. In her closing remarks, she emphasized that “it is not just about money. It is important that we align 100% with our joint task to deliver impact quickly. We need to build a bridge between the negotiations sphere and concrete impact for communities that struggle with the impact of climate change.”

Read more here and here. More Information on The Global Risk Financing Facility.

 

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