Africa's Disaster Shield: World Bank's Innovative Three-Tiered Financial Solution
Through the World Bank REPAIR Program, eight Eastern and Southern African countries used US$680 million from the Bank (Phase 1: US$280 million IDA financing, Phase 2: US$400 million of IDA/IBRD financing) to capitalize a regional fund and mobilize private capital for disaster risk insurance. Hosted by African Risk Capacity Limited (ARC Ltd), the three tiers of the fund are:
- Reserves for moderate shocks,
- Contingent financing for significant shocks through our IPF DDO product,
- Parametric insurance for catastrophic events.
Under the REPAIR Program, Mozambique has already activated $16.9 million for Cyclone Jude response, supporting 300,000 affected people. Similarly, when Cyclone Chido struck Comoros in December, funds were disbursed within seven days for emergency relief.
The REPAIR framework offers a replicable blueprint for similar approaches in other vulnerable regions facing recurrent hurricanes, flooding cycles, or drought patterns.
This document was originally published here.