Protecting Development Gains, on Countries' Terms: The Future of Pre-arranged Crisis Finance in IDA
The World Bank has built a stronger toolkit for crises, but most of its crisis finance is still arranged after a disaster strikes.
This report sets out how IDA could pre-arrange more finance for more countries, and fund the prepardness that makes it work.
It also models what a larger portfolio would cost IDA’s capital, and how transferring part of the risk could bring that cost down. Seven recommendations are addressed to IDA Deputies as they negotiate the IDA22 replenishment.
Key Figures
9x
For every $1 IDA paid out from crisis finance agreed in advance, it committed $9 after disasters had already hit (2018-2025)
US$16.7 billion
crisis finance countries could have ready before disaster strikes if each used its full IDA limit. Today it’s US$1.4bn
Key Terms Used In This Report
Financing approved before crises that is released automatically when agreed triggers are met.
Using different financial instruments for different disaster frequencies.
When disaster risk is shifted to insurers or capital markets.
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The State of Pre-Arranged Financing for Disasters 2025
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What Governments Want from Pre-Arranged Financing: Evidence from Africa and the Caribbean
The first cross-country evidence on what governments actually want from pre-arranged financing, drawing on evidence from nearly 250 government officials and national stakeholders.
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Cost Multiples For Pre-Arranged Financing: A Comparison Of Instruments From International Financial Institutions
This working paper presents a framework that compares contingent loans, grants from multilateral development banks, catastrophe bonds, and insurance provided through regional risk pools.
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