Demystifying Pre-Arranged Financing For Governments: A Stocktake Of Financial Instruments From International Financial Institutions
As the toolkit for pre-arranged financing expands, it is becoming increasingly challenging for governments to determine which instrument, or combination of instruments, best meets their needs. There is no silver bullet or single ‘best’ PAF instrument. To help governments and international partners better prepare for disasters, this report offers an in-depth assessment of pre-arranged financing tools using seven key criteria for ensuring pre-arranged financing reduces the human and financial costs of disasters.
Key Figures
7
Criteria used to evaluate pre-arranged financing instruments
0
Single instrument that performs best across all criteria.
Key Terms Used In This Report
A provision in sovereign debt contracts that enables the borrower to temporarily stop repaying debt service for a pre-agreed period when a predefined event occurs.
Using different financial instruments for different disaster frequencies.
When governments retain and finance disaster costs themselves.
When disaster risk is shifted to insurers or capital markets.
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