Parametric Insurance require high premium costs, cannot address all shocks, and require slow build-up of in-country technical capacity. Sound Disaster Risk Financing (DRF) requires a more holistic and layered approach.
Transparency, rapid access (+/- 1 week), improves PFM, leverage private capital
Target: Low frequency and high impact shocks
Rapid access (+/- 1 week), large amount, leverage effect on IDA PBA
Target: Provide funding for shocks that may not trigger index for parametric insurance claim
Immediate access (between 4 -7 days), flexible disbursement condition, invested
Target: high frequency and low impact shocks
Funds arrives at MOF within 7 Days from when the trigger is met
MOF decides which financial instruments and through which delivery channels fund will flow
Mobilise funding for countries to respond to disasters on an ongoing basis
Geographical location of Eastern and Southern Africa countries increases the likelihood of cross-country disasters from recurrent river flooding, coastal flooding, seismic activity and climate effects such as El Niño and La Niña.
Tropical cyclones have historically hit several Southern Africa countries at once (i.e. TC Freddy)
The initiative aims to strengthen both the financial and operational preparedness of participating countries to respond quickly to climate and other shocks in the ESA.
At the core of the REPAIR Program is the USD 926 million Regional Climate Risk Fund (RCRF), which supports participating countries in strengthening their capacity for preparedness and immediate response in the face of emergencies.
Through REPAIR, ESA countries are better positioned to reduce vulnerability, safeguard development gains, and build a more resilient and inclusive future for their people.