On November 21, 2024, the World Bank Group’s Global Shield Financing Facility (GSFF) and its donors hosted a session at COP29 in Baku, Azerbaijan, in collaboration with the World Food Programme (WFP). Organized by Luxembourg’s Ministry of the Environment, Climate, and Biodiversity and Germany’s Federal Ministry for Economic Cooperation and Development (BMZ), the event, held at the EIB-Luxembourg Pavillion, highlighted innovative financial tools to enhance resilience for vulnerable communities most affected by climate and disaster risks and marked the launch of a new programmatic window under the GSFF.

DRF4ASP Programmatic Window

Serge Wilmes (Minister for Environment, Climate, and Biodiversity, Luxembourg) announced the new Disaster Risk Financing for Adaptive Social Protection (DRF4ASP) programmatic window under the GSFF.  This new window will strengthen links between financial solutions and shock-responsive systems to enable swifter and more targeted post-shock response to vulnerable households and communities. This approach will help maximize the impact of DRF solutions by integrating them with social protection mechanisms, supporting the objectives of the Global Shield against Climate Risks initiative. 

This DRF4ASP programmatic window aims to:

1. Optimize financing for the most vulnerable: Through layered risk finance strategies that combine different instruments to provide support for the most vulnerable in the most cost-effective way.
2. Enhance scalability and speed: By enabling rapid disbursement to vulnerable beneficiaries when disasters strike.
3. Promote inclusivity: Ensuring that funds reach the most vulnerable populations, including women and children.
4. Strengthen resilience: By enabling shock-responsive social protection systems tailored to country-specific needs.

Key takeaways

The event brought together country representatives and partners implementing GSFF-supported programs to showcase how GSFF results contribute to the Global Shield’s objective of closing the protection gap for climate and disaster risks. Key takeaways include:

• Integration of DRF and ASP is critical: Linking financial instruments like insurance and contingency funds with social protection systems ensures faster, targeted, and inclusive responses to climate and disaster shocks.
• Country-Led approaches drive success: Country-specific strategies that account for local vulnerabilities and needs are essential for effective disaster preparedness and response.
• Timely pre-arranged financing saves lives and livelihoods: Delayed funding after disasters often exacerbates human and economic losses. Pre-arranged financing enables countries to act before or immediately after a crisis, reducing uncertainty and accelerating recovery.
• Social protection systems must be scalable and inclusive: Geographically targeted programs, cash transfers, and community training are crucial to protecting livelihoods.

In his opening remarks, Loic Chiquier (Senior Advisor, Prosperity vertical, World Bank Group), who also moderated the event, provided examples of successful DRF-ASP integration, including in Malawi, where a $21 million GSFF grant has enabled the social safety net to reach 142,000 households with rapid post-disaster assistance during a severe drought in the 2023-2024 season.

Zulfiqar Younas (Additional Secretary, Ministry of Climate Change, Pakistan) described the devastating 2022 floods in his country, which affected 33 million people and caused $30 billion in economic losses. He emphasized Pakistan’s use of early warning systems, provincial disaster management authorities, and innovative financing tools, including a newly submitted Global Shield request letter through the Global Shield in country process, to address these recurring challenges. He also highlighted solutions that could work for scaling social protection and protecting micro-finance institutions, focusing on the Global Shield and in-country process.

Dr. Mahdi M. Ali (Principal Adviser, Ministry of Labor and Social Affairs, Somalia) provided his perspective on Somalia as a Global Shield country that is interested in scaling engagement on linking finance to ASP solutions. He then spoke about the importance of pre-arranged contingency funds, which enable immediate response and recovery, and the value of Somalia’s unified social registry, which has registered over 500,000 households to better target assistance. Dr. Mahdi concluded by advocating for stronger coordination, improved data systems, and sustained support from international partners to address Somalia’s vulnerability and ensure timely and effective responses to future shocks. As a Global Shield country, Somalia will receive technical support by the World Bank throughout the Global Shield In-Country Process.

Marc Regnault de la Mothe (Deputy Country Director, WFP Madagascar) elaborated on the link between ASP and insurance solutions/premium financing, delving into the partnership approach that led to the establishment of the DRF4ASP window. Using examples from Madagascar, he explained how insurance payouts and contingent financing mechanisms have supported vulnerable households during events like Cyclone Freddy and severe droughts. He described how these tools were linked to ASP systems, enabling rapid cash transfers to affected communities. For instance, payouts were used to assist 133,000 people before a drought and nearly 30,000 households immediately following a cyclone. Marc underlined the need to strengthen national systems and enhance their shock-responsiveness, with an emphasis on scaling up social protection programs and integrating DRF mechanisms for broader and more sustainable impact.

Manuela Glass (Senior Policy Officer, BMZ) emphasized a forward-looking vision in her closing remarks, highlighting the critical role of collaboration in shaping the future of DRF and ASP. She stressed the importance of maintaining a country-focused approach and building tailored solutions that can be scaled effectively in priority regions. Manuela envisioned a future where rapid-response financial tools are fully integrated into national systems, enabling countries to protect their most at-risk populations before, during, and after disasters.