Governments in nine Caribbean countries will still be able to maintain their disaster risk management efforts even with national finances stretched by the demands of responding to the COVID-19 pandemic.
This is because the Government of Canada has partnered with the Caribbean Development Bank to offer assistance through a new CAD$20 million fund – the Canada-CARICOM Climate Adaptation Fund (CCAF).
The Bank’s Board of Directors approved the establishment of the Fund last Thursday. CCAF will be financed through Global Affairs Canada, while CDB will provide in-kind contribution valued at CAD$ 1.2 million. The projects to be financed will run from July 2020 to March 2022.
CDB Borrowing Member Countries (BMCs) which are eligible for CCAF assistance are Antigua and Barbuda, Belize, Dominica, Grenada, Guyana, Jamaica, St. Lucia, St. Vincent and the Grenadines and Suriname.
The fund will support both short-term and longer-term measures to maintain and strengthen the disaster risk financial management capacity of the countries. The nine countries will have their Caribbean Catastrophe Risk Insurance Facility (CCRIF) insurance premium payments for either 2020-21 or 2021-22, covered through the fund.
CDB’s Director of Projects Daniel Best lauded the Government of Canada for increasing its support for the Caribbean’s climate resilience efforts in a difficult time, stating:
“We know the ongoing COVID-19 pandemic has been placing severe pressure on BMCs’ public finances which could redirect resources away from planned investments in climate resilience. We are also conscious that the Caribbean is vulnerable to natural disasters; so it is equally critical that countries remain adequately protected against disaster risk. We appreciate the intervention of the Government of Canada which recognised this and quickly stepped up to support Caribbean countries in maintaining their ongoing disaster risk reduction and climate resilience efforts.”
Through risk-pooling and access to reinsurance and capital markets, CCRIF has enabled Caribbean countries to purchase catastrophe risk insurance at 40-50% less than they would have paid had they approached the insurance market individually. Since its inception, CCRIF has made an estimated USD$ 150 million (mn) in payouts to 13 BMCs, within the guaranteed 14 days of an insurable event.
A key longer-term focus of the CCAF is the support for technical expertise to help identify and design new innovative financing instruments to support disaster risk financing and climate resilience initiatives for all BMCs.
The project is consistent with CDB’s policy on disaster risk management, which encourages and supports BMCs to use measures that offer protection even before an event takes place.
