February 2, 2023

Caribbean Broadcasting Corporation

The most credible news source in Barbados

World Bank launches Global Shield Financing to help Caribbean adapt to climate change

November 15, 2022
Stock photo

CMC – The World Bank Group has announced a Global Shield Financing Facility to help developing countries, including those in the Caribbean, access more financing for recovery from natural disasters and climate shocks.

The Washington-based financial institution said this facility will support the Global Shield Against Climate Risks, a joint initiative launched at the ongoing United Nations Climate Change Conference (COP 27) on Monday in Egypt by the G7 and V20 “to better protect poor and vulnerable people from disasters by pre-arranging more financing before disasters strike”.

World Bank Managing Director of Operations, Axel van Trotsenburg said, “We estimate that by 2040, over 130 million people could be pushed into extreme poverty by climate change.

“Access to disaster risk finance and insurance solutions for low-income countries is part of the World Bank’s strategy for helping them adapt to the growing risks of natural disasters. We will contribute to the Global Shield initiative through our analytical and advisory work, policy dialogue and country lending operations.” 

The World Bank said the Global Shield Financing Facility will channel grants to developing countries through World Bank projects or through projects prepared by other participating partners, including UN agencies and multilateral development banks.

It will also work closely with key stakeholders, such as civil society organizations, risk pools, private sector and humanitarian partners, the World Bank said.

It said the Global Shield Financing Facility will finance integrated financial protection packages that offer “coordinated and consolidated financial support to those vulnerable to climate shocks and disasters.

The World Bank said these financial packages will complement investments in climate adaptation and disaster risk reduction.

Such packages will also enable and mobilize private capital for improved financial resilience, by offering private financial solutions, including insurance and other risk transfer instruments such as catastrophe bonds, the World Bank said.

It said it has been a “longstanding partner” to Germany and the United Kingdom in risk finance and has brought “strong experience” to the development of the Global Shield Against Climate Risks.

The World Bank said the Global Shield Financing Facility builds on the earlier Global Risk Financing Facility, established in 2018, which has supported country operations in Africa, Asia, and Small Island Developing States (SIDS), such as those in the Caribbean.

The programme has been paired with US$3billion in World Bank lending and helped to mobilize more than US$1billion in private sector capital, the World Bank said.

“The World Bank looks forward to providing concrete advisory and financial support to client countries to improve financial protection of poor vulnerable people and to actively contribute to the collective efforts to make the global risk finance architecture more impactful,” the statement said.

Share this!