MAPUTO – The World Bank has approved a US$90 million grant from the International Development Association, to support the government of Mozambique’s Disaster Risk Management (DRM) and Resilience Program.
The programme was estimated to directly benefit a total of 3,360,000 people, including women and other vulnerable groups, as well as children who would benefit from school retrofitting.
The financing is meant to support the implementation of the government’s second DRM master plan, which seeks to improve financial protection against natural disaster, including the operationalization and capitalization of the recently established Disaster Management Fund, strengthen disaster preparedness and response and build climate resilience into vulnerable education infrastructure.
The World Bank’s country director for Mozambique, Mark Lundell said this week the multilateral institution would ensure the money is made available for emergency as soon as the project became effective.
“As we approve this financing, my thoughts go to the families of those who perished during the cyclone Idai and the flooding season in the center of Mozambique,” said Lundell.
“…This program seeks precisely to strengthen the capacity of the government to respond quickly and build more resilience in the communities for future climate hazards.”
Evidence shows that the poor tend to bear the brunt of natural hazards prompted by climate change as they are often the least prepared and have limited financial capacity to cope.
Mozambique’s exposure to climatic shocks is made worse by the effects of climate change, highlighting the importance of strengthening the country’s financial resilience. Without changes in climate and disaster risk management and financing policy, climate change is expected to cause economic damages of up to US$7.4 billion during the period 2003–50 in Mozambique.
World Bank senior urban specialist and the project’s task team leader, Michel Matera said, “Indeed, the negative impact of economic and disaster-related shocks is exacerbated, among other things, by limited fiscal space to respond quickly and effectively to these shocks.”
Public resources allocated ex-ante for emergency response and recovery had been significantly lower than the funds needed to cope with catastrophic events, hence the program would seek to maximize innovative financing approaches like incentivising the government to purchase sovereign risk transfer products from insurance and capital markets to manage the financial impacts of disaster shocks.
The government could thus leverage up to US$120 million of private sector capital to support the financing of disaster response in Mozambique.
The total funding for the program is $132.27 million, of which $90 million is provided by IDA, $6 million is from the Global Risk Financing Facility (GRiF) and $36.27 million are Government of Mozambique’s counterpart funding.