Asian Development Bank partners with Japan on disaster risk finance facility

The Asian Development Bank (ADB) has announced its first facility focused ​on disaster risk financing (DRF), with initial funding ‌from the government of Japan.

The Pre-Arranged Resources for Enhancing Preparedness and Resilience (Prepare) facility aims to enhance ​disaster resilience in Asia and the Pacific ​and will be administered by ADB. The ⁠bank described it as an overarching platform ​to enable collective action, while accommodating the ​diverse risk profiles and institutional capacities of developing countries.

It will include a trust fund for the Pacific (P-Prepare), which ​has been supported by an initial contribution ​of $2.9 million from Japan. ADB said P-Prepare would support ‌Pacific ⁠countries' capacity-building, improve the affordability and alignment of DRF instruments, and aid in the development of DRF strategies and innovative financing solutions.

The ​fund will ​also provide ⁠targeted support for regional parametric insurance risk pool the Pacific Catastrophe ​Risk Insurance Company.

ADB's recent disaster risk ​financing ⁠activities have included issuing parametric catastrophe bonds for the Kyrgyz Republic and Tajikistan and conducting a feasibility study ⁠on ​disaster-resilient loans in the ​Pacific.

PCRIC has paid several claims in recent weeks following cyclones across ​the Pacific region and a drought in Tonga.