15th AOGEO Symposium

Financing Water-Related Disasters under Climate Change
Alessio Giardino
Senior Water and Climate Change Specialist
Asian Development Bankagiardino@adb.org

By the numbers• Asia will need USD1.7T / year (ADB)• OECD: 40% of development investments are prone toclimate change hazards• World Water Assessment Program: climate change iscosting 5-20 % GDP / year
• World Bank: <0.5% GDP, adaptation could remove 70%of climate change damages• Global Commission on Adaptation: investing in early
warning systems, resilient infrastructures, improved
dryland agriculture & crop production, protected
mangroves, & resilient water resources could deliver 4xRoI• ADB: $100B in climate financing over 2019-2030, with
$66B for climate mitigation and $34B for adaptation

 Low-Income Economies  Lower-Middle Income Economies

 Upper-Middle Income Economies  High-Income Economies
SOURCE: OECD 2021

Disaster displacements in the region (ADB, iDMC, 2022)

Internal displacements in Asia and the Pacific: Breakdown
by Hazard (2010-2021)
Source: Internal Displacement Monitoring Centre, 2022

Internal displacements by disasters per subregion
Source: Internal Displacement Monitoring Centre, 2022

Climate mitigation benefits

Source: Swiss Re Institute (2021)

 For Asia, the GDP loss could be reduced by about 15% is Paris Agreements targets were reachedcompared to a scenario leading to a temperature increase of 2.6 by end of the century

Funding for Disaster Risk Management
Types of intervention

Risk reduction and preparedness

Early recovery

ReliefReconstruction

Loan/grant modalities

Project loans, sector loans, FILs, MFFs, RBLs
Contingent disaster financing option under PBL(begun 2016; formalized 2019)
APDRF grants
COVID-19 pandemic response option under CSF(interim 15-month measure introduced April 2020)
Emergency assistance loans(established 2004 as part of the DEAP)
Project and sector loans

Funding

Country allocations

Trust funds, including IDRM Fund (established 2013),
RMTF (established 2013), UCCRTF (established2013), BCCDR (established 2019), and JFPRADF 12 disaster risk reduction and regional healthsecurity set-asides (Group A members); ADF 13
Thematic Pool (Group A and B members)

APDRF(established2009)

Event-specific trust funds, JFPR
Disaster Response Facility (ADF and COL) (Group A (and B))
members) (piloted under ADF 11; regularized under ADF
12 for natural hazards; expanded under ADF 13 to covercross-border movements and public health emergencies)
Portfolio restructuring, loan cancellations, savings

ADB’s Contingent Disaster Financing Instrument• Building on experience gained through several related pilots, a tailored contingent disaster
financing (CDF) option under ADB’s policy-based loan instrument was approved in August
2019.
• Focus on disasters triggered by natural hazards (e.g. typhoons, floods, earthquakes,droughts, and tsunamis)• The instrument was expanded to include health-related emergencies, in addition todisasters triggered by natural hazards, in April 2020.
Key features of contingent disaster financing loans and grants• Prior policy and monitorable actions focus on measures to enhance long-term resilience.
• Achievement of the prior actions enables eligibility to disburse funds.
• Funds disburse quickly in the event of a pre-agreed soft trigger event, providing rapid liquidity forgovernment• Designed for events with a frequency once every 3 to 10 years (not too frequent e.g. yearly)$

Private Finance

SOURCE: ALERTS. G.J., 2019

• The public sector dominates water sector infrastructure financing (92% of total investments)• As a reference: private sector finances more than 75% projects in telecommunication , andclose to 50% in the power sector

Future of Resilient Investments in WRD• As the population and urbanization grow, water scarcity and water-related climate risks
will increase, and developing countries will be forced to invest.

• Flood Forecasting and Early Warning Systems are cost-effective in significantly reducing
damage and losses from extreme events.
• Maintenance needs to be supported with sufficient earmarked funds.

• Spatial planning and water resource management are essential to ground resilience andavoid maladaptation.
• Capacity building of city/sub-national and national level government staff is essential tosensitize them about climate change impacts and resilience.
• And there is a vital need to support water conservation, reuse, and nature-basedsolutions.

The Asia and the Pacific Water Resilience Hub
https://hub4r.adb.org/
Join the Hub
 Register for updates
 Join as contributor

Resilience and Adaptive Capacity  Inclusiveness and Gender Equality  Environmental Sustainability and Circular Economy
 Governance and Finance  Innovation and Technology

“Natural hazards don’t
need to turn into
disasters if properly
managed”

More on ADB Water, follow us here:

adbwaterwww.linkedin.com/groups/10479643/

ADBWateradbwater

Newsletter

Community Site