World Bank Group Launches Global Shield Financing Facility to Help Developing Countries Adapt to #ClimateChange
WASHINGTON: After the COP27 held in Egypt, the World Bank Group has announced a Global Shield Financing Facility to help developing countries, like Pakistan, access more financing for recovery from natural disasters and climate shocks.
This facility will support the Global Shield Against Climate Risks, a joint initiative launched today at COP27 by the G7 and V20 to better protect poor and vulnerable people from disasters by pre-arranging more financing before disasters strike.
“We estimate that by 2040, over 130 million people could be pushed into extreme poverty by climate change,” said Axel van Trotsenburg, World Bank Managing Director of Operations. “Access to disaster risk finance and insurance solutions for low-income countries is part of the World Bank’s strategy for helping them adapt to the growing risks of natural disasters. We will contribute to the Global Shield initiative through our analytical and advisory work, policy dialogue and country lending operations.”
The Global Shield Financing Facility will channel grants to developing countries through World Bank projects or through projects prepared by other participating partners, including UN agencies and multilateral development banks. It will also work closely with key stakeholders, such as civil society organizations, risk pools, private sector and humanitarian partners.
The Global Shield Financing Facility will finance integrated financial protection packages that offer coordinated and consolidated financial support to those vulnerable to climate shocks and disasters. These financial packages will complement investments in climate adaptation and disaster risk reduction. Such packages will also enable and mobilize private capital for improved financial resilience, by offering private financial solutions, including insurance and other risk transfer instruments such as catastrophe bonds.
The World Bank has been a longstanding partner to Germany and the U.K. in risk finance and has brought strong experience to the development of the Global Shield Against Climate Risks. The Global Shield Financing Facility builds on the earlier Global Risk Financing Facility, established in 2018, which has supported country operations in Africa, Asia, and Small Island Developing States. The program has been paired with $3 billion in World Bank lending and helped to mobilize more than $1bn in private sector capital.
The World Bank looks forward to providing concrete advisory and financial support to client countries to improve financial protection of poor vulnerable people and to actively contribute to the collective efforts to make the global risk finance architecture more impactful.
BY : M.A
