From July 3-9, 2024, a unique knowledge exchange visit was facilitated by the World Bank Group’s Crisis and Disaster Risk Finance team. The visit involved four countries seeking to understand and exchange best practices in Disaster Risk Financing (DRF).  The knowledge visit was organized in collaboration with the Disaster Risk Financing and Insurance Program (DRFIP) and the Global Shield Financing Facility (GSFF).

Twenty senior policymakers from Bangladesh and Sierra Leone travelled to Malawi, where they were joined by their counterparts from Malawi. After the visit to Malawi, eight senior representatives from Malawi joined their Bangladesh and Sierra Leone counterparts for the second part of the learning visit in Mozambique, where they were joined by seven senior representatives from Mozambique. This marks the first-ever knowledge exchange involving four countries implementing programs financed by GSFF, as they delved deeply into their experiences of establishing financial solutions to mitigate climate shocks and disasters.

This program was unique as it comprised a two-part study tour; the first part of the knowledge visit was in Blantyre, Malawi and second part of the visit was in Maputo, Mozambique. The two countries offered very relevant experiences that will help DRF programs being designed by Bangladesh and Sierra Leone. These included setting up and managing of the Disaster Risk Management (DRM) Fund in Mozambique and understanding the implementation of contingent finance using instruments such as the Catastrophe Deferred Drawdown Option (Cat DDO) and that of shock responsive social protection programs in Malawi.

MALAWI:

- July 3^rd and 4^th in Malawi: The knowledge visit commenced with a welcome note from Kate Langwe (Director of Poverty Reduction and Social Protection), followed by a session on the fundamentals of DRF. This session included an interactive exploration of financial instruments such as Contingency Funds, Risk Transfer Solutions Contingent Lines of Finance, as well as World Bank offered instruments under its recently launched crisis preparedness toolkit. These offer different solutions that countries can consider while strengthening their financial planning against natural disasters and climate shocks. Next, participants took part in a hands-on session on mapping and influencing stakeholders to develop strategies to effectively engage with diverse stakeholders.

The knowledge visit in Malawi was then formally opened by Md. Muhibuzzman (Additional Secretary, MD Jiban Bima Corporation, Bangladesh), Samuel E. B. Momoh (Principal Deputy Financial Secretary, Sierra Leone) and Dr. Kondwani Santhe (Executive Director for National Local Government Finance Committee, Malawi). Subsequently, delegates from Sierra Leone, Bangladesh and Malawi delivered in-depth and engaging presentations on their DRF activities and implementation plans.

A full day was focused on a deep dive in Malawi, including a focus on the design and implementation of their DRF strategy. The learnings focused on the shock-responsive social protection program that is insured by a parametric drought product, which triggered in April 2024, a series of policies purchased from the Africa Risk Capacity, as well as implementation of a contingent line of finance, the Cat DDO, which triggered during the COVID pandemic.

- July 5^th in Malawi:  30 delegates from Bangladesh, Sierra Leone and Malawi had the opportunity to visit three social protection program sites in Chiradzulu district, Malawi. The delegates were able to meet some of the beneficiaries under the World Bank financed project. The visit provided a first-hand understanding of the reach and benefits of the programs. Projects financed in Malawi include procurement of parametric insurance to protect households in six districts for two agricultural seasons. In 2023-2024, the policy has triggered in four out of six districts, benefitting 91,000 households. Additionally, support has been provided to strengthen delivery systems including social registry and digital payment.

MOZAMBIQUE

- July 8^th and 9^th in Mozambique: The knowledge visit in Mozambique was formally opened by Paul Chipeta (Project Coordinator, Social Support for Resilient Livelihoods Project, National Local Government Finance Committee, Malawi), Md. Muhibuzzman (Additional Secretary, MD Jiban Bima Corporation, Bangladesh), Samuel E. B. Momoh (Principal Deputy Financial Secretary, Sierra Leone) and Luisa Celma Meque (President, National Institute for Disaster Management and Risk Reduction [INGD], Mozambique). On the first day, the representatives from the four countries discussed their DRF strategies and implementation plans in detail. The second day was focussed on Mozambique with the emphasis on setting up and implementing a DRM fund and designing and implementing two sovereign parametric risk transfer solutions. World Food Program was were invited to share their experience on replica products provided to complement the sovereign level ARC products.

The Learning Program concluded with a hands-on activity where delegates brainstormed in their country groups and presented their key takeaways, key actions, and challenges that need to be resolved to implement the key actions.

The key priority areas and next steps that emerged were as follows:

1. Establish and/or further strengthen a dedicated DRM fund.
2. Utilize innovative financial tools and effective risk layering techniques, including adding Catastrophe Deferred Drawdown Options (Cat DDO), other risk retention products such as contingent credit, and risk transfer solutions to existing DRF strategies.
3. Develop legal/regulatory frameworks and governance mechanisms for implementing effective DRF strategies. Continue advancing regulations and policies for macro-level products.
4. Establish flexible and sustainable fund mechanisms to ensure the rapid mobilization of resources in times of need.
5. Use data and analytics to inform financial decisions for updating and enhancing the DRF strategy.
6. Develop a robust monitoring and evaluation framework that leverages data and analytics to support the implementation of the DRF strategy.
7. Collaborate with development partners for financing and technical assistance on DRF activities outlined in the strategy.
8. Enhance engagement with all stakeholders and build medium- and long-term partnerships for financing DRM initiatives.
9. Plan and implement capacity-building initiatives, including risk modelling to quantify the impacts of various disasters, to strengthen competencies and resources.

The knowledge visit provided a platform to exchange ideas and innovative practices by offering a blend of theoretical knowledge and practical applications, equipping delegates with tools that can strengthen their countries' DRF strategies.

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For more information, please write to Sumati Rajput (srajput1@worldbank.org) or gsff@worldbank.org.