India Pledges Approximately FJ $1.8M towards Developing Climate Disaster Risk Financing in Fiji
The India UN Development Partnership Fund, managed by the United Nations Office for South-South Cooperation, has pledged FJ$1.8 million (~US$ 850,000) to support a new initiative to create a climate disaster risk financing framework for Fiji.
This new initiative, named the ‘Developing Climate Disaster Risk Financing framework and Parametric Insurance’ aims to alleviate economic damage caused by climate and extreme weather events through financing instruments for Fijians.
The increasing frequency and intensity of climate-fuelled natural hazards in Fiji and the rest of the Pacific has had devastating economic consequences. In 2016, tropical cyclone Winston is estimated to have caused US$0.9 billion damage to the Fijian economy. The estimated financial loss caused by tropical cyclone Harold earlier in April this year, is still being assessed but is expected to run into millions of US dollars.
To minimize the economic damage caused by future climate-related disasters, the project will develop index-based insurance and other climate disaster risk financing instruments for individuals, businesses and organizations in the Pacific. The initiative, led by the Climate Change and International Cooperation Division of the Fiji Ministry of Economy, will be jointly implemented by the United Nations Capital Development Programme (UNCDF), together with the United Nations Development Programme (UNDP) and the United Nations University (UNU)-managed Munich Climate Insurance initiative (MCII).
“Major climatic events like cyclones can deliver sudden and unplanned shocks to any government’s financial planning. Too often, the multilateral financial tools at our disposal are ill-equipped to respond expeditiously to these events. When a Fijian’s home is blown over or their crops are washed away they cannot afford to watch assistance slowly drip through inflexible disaster risk finance frameworks; they need those funds immediately. Insurance products not only guarantee those payments quickly, they grant private sector partners a vested interest in seeing Fijian communities strengthen their resilience to climate impacts,” said Fijian Attorney-General Aiyaz Sayed-Khaiyum. The Attorney-General also thanked the Government of India and the United Nations for their foresight in helping Fiji transcend the inherent obstacle of scale in developing climate insurance products.
The India-UN Development Partnership Fund, sponsored by the Government of India and implemented in collaboration with the United Nations, and with the United Nations Office for South-South Cooperation (UNOSSC) as the coordinating partner is advancing all 17 Sustainable Development Goals by contributing resources and expanding partnerships for development cooperation in the Global South. Through this partnership with Government of Fiji and UNCDF, India will also share knowledge as a part of their support. This project will organize a number of learning visits to India. Parametric crop insurance is well developed in India, and these excursions will offer a chance, while building opportunities for collaboration between Fijian and Indian companies.
The Indian High Commissioner to Fiji H.E. Ms. Padmaja said that “during his interaction with the Leaders of the Pacific Small Island Developing States (PSIDS) at New York in September 2019, Prime Minister of India Hon. Narendra Modi announced US$1 million for each country for projects in the area of their choice. It is a matter of great satisfaction that we have fulfilled that commitment in a timely manner”. Hon. PM had also invited Leaders of PSIDS to join the Coalition for Disaster Resilient Infrastructure; “As innovative solutions are needed to prepare for the economic effects of climate change, this includes new financial solutions as well. This project will surely help to drive the development of those products and facilitate learning between the two countries.”
Judith Karl, Executive Secretary of UNCDF noted, “The development of adequate financial and insurance tools, that allow Pacific Islanders to better deal with economic shocks after a natural disaster, will strengthen the resilience of people who are currently already facing the negative socio-economic impacts caused by COVID-19. UNCDF, through our activities in the Pacific, is proud to collaborate with the Government of India’s UN Development Partnership Fund, the Government of Fiji and the other project partners, in ensuring that tailor-made financial tools are designed and scaled up to assist Fijians to recover after natural disasters.”
The project will be launched in September, for more information please mail to: pacific.office@uncdf.org.
About UNOSSC The United Nations Office for South-South Cooperation (UNOSSC) is the United Nations system-wide advocate, coordinator and facilitator of South-South cooperation. UNOSSC supports multilateral South-South policy-making processes; strengthens capacities of Member States to initiate, manage and implement South-South cooperation; and facilitates partner-led and -funded programmes. UNOSSC manages and serves as the Board of Directors Secretariat for the India-UN Fund as well as for a number of other South-South cooperation funds.
About UNCDF
The UN Capital Development Fund makes public and private finance work for the poor in the world’s 47 least developed countries (LDCs). UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development. UNCDF pursues innovative financing solutions through: (1) financial inclusion, which expands the opportunities for individuals, households, and small and medium-sized enterprises to participate in the local economy, while also providing differentiated products for women and men so they can climb out of poverty and manage their financial lives; (2) local development finance, which shows how fiscal decentralization, innovative municipal finance, and structured project finance can drive public and private funding that underpins local economic expansion, women’s economic empowerment, climate adaptation, and sustainable development; and (3) a least developed countries investment platform that deploys a tailored set of financial instruments to a growing pipeline of impactful projects in the “missing middle.”