43553-012: Developing a Disaster Risk Financing Capability | Asian Development Bank

Regional: Developing a Disaster Risk Financing Capability

Sovereign (Public) Project | 43553-012 Status: Closed

This project will assess potential disaster risk financing (DRF) options for climate-related and geological risk for selected cities in Indonesia and the Philippines in terms of feasibility, demand, and effectiveness. The project is funded through the Japan Fund for Poverty Reduction. It is an outcome of TA 6474-REG: Natural Catastrophe Risk Insurance Mechanisms for Asia and the Pacific, which studied the feasibility of catastrophe risk transfer programs in the region.

Project Details

Project Officer
Benson, Charlotte Sustainable Development and Climate Change Department Request for information
  • Regional
  • Technical Assistance
  • Finance
Project Name Developing a Disaster Risk Financing Capability
Project Number 43553-012
Country Regional
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7812-REG: Developing a Disaster Risk Finance Capability
Japan Fund for Poverty Reduction US$ 2.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Partnerships
Private sector development
Sector / Subsector

Finance / Finance sector development

Gender Equity and Mainstreaming No gender elements
Description This project will assess potential disaster risk financing (DRF) options for climate-related and geological risk for selected cities in Indonesia and the Philippines in terms of feasibility, demand, and effectiveness. The project is funded through the Japan Fund for Poverty Reduction. It is an outcome of TA 6474-REG: Natural Catastrophe Risk Insurance Mechanisms for Asia and the Pacific, which studied the feasibility of catastrophe risk transfer programs in the region.
Project Rationale and Linkage to Country/Regional Strategy

Traditionally, developing countries have relied heavily on ex post government budget allocations, public borrowing and international assistance to finance their disaster relief, early recovery and reconstruction efforts. This practice has resulted in delays in reconstruction, exacerbating the indirect impacts of disasters. The additional post-disaster pressure on public resources has also had adverse implications for the achievement of long-term social and economic development goals.

Over the past decade, there has been increasing interest in proactive, ex ante financing mechanisms via public-private partnerships (PPP) to help address these issues. These mechanisms allow the participating country to transfer and manage disaster risk via private sector finance and insurance mechanisms before a disaster occurs. They are typically developed with the support of private sector reinsurance and risk modeling companies, which quantify and estimate disaster risk. Ex ante DRF mechanisms complement ex post arrangements, creating a long-term solution for sustainable and timely DRF.

Both Indonesia and the Philippines are highly exposed to both geological and hydrometeorological hazards and disaster risk is expected to increase as a consequence of climate change. The TA will assist two selected cities in each country to develop ex ante DRF mechanisms. The project''s urban focus reflects the fact that urban areas face unique and rising disaster risk and climate change challenges and account for an increasing share of both countries'' total population and economic productivity, yet have received relatively little attention to date in the development of DRF solutions.

The project will be complemented by additional activities under TA 8012, a subproject under a climate change cluster TA that is also funded through JFPR. This subproject will focus on the development of DRF solutions in two cities in Viet Nam that face hydrometeorological risks.

Impact The impact of the TA will be greater disaster risk management (DRM) capacity, reduced disaster impacts over time, and enhanced climate resilience.
Project Outcome
Description of Outcome The outcome will be strengthened national and urban capacity in DRF in the context of integrated DRM in Indonesia and Philippines.
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

(i) Risk profiles and risk models completed and available to Indonesia and Philippines

(ii) Two DRF projects completed in each country

(iii) Consultation, training, and dissemination activities completed to increase awareness within Indonesia and the Philippines regarding IDRM

(iv) Project management units (PMU) established

Status of Implementation Progress (Outputs, Activities, and Issues)

The project activities will be organized around four outputs to achieve the outcome outlined above: (i) risk profiling and risk modeling, (ii) product design and implementation of DRF projects, (iii) awareness raising through consultation, training, and dissemination and (iv) establishment of a project management unit to implement the TA.

Status of Operation/Construction or Implementation Progress:

The project is being implemented in three phases: Phase 1: development of disaster risk profiles for selected medium-sized urban areas in Indonesia and the Philippines, culminating in the selection of two project cities in each country; Phase 2: development of in-depth hazard and loss models for each city, leading to the identification and development of DRF options tailored to the disaster risk circumstance, capabilities and interests of each one; Phase 3: selection of one DRF mechanism, following an independent review of all Phase 2 options.

Consultative Groups:

In the Philippines a Project Consultative Group was formed in 2013 to oversee the design and implementation of TA activities, and comprised of the Office of Civil Defense (OCD), Department of Finance (DOF), Department of Interior and Local Government (DILG), National Economic and Development Authority (NEDA), Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), Philippine Institute of Volcanology and Seismology (PHIVOLCS), Mines and Geosciences Bureau (MGB), and the National Mapping and Resource Information Authority (NAMRIA). In Indonesia a Consultative Steering Committee was formed in 2012, comprised of the National Agency for Disaster Management (BNPB), Ministry of Finance (MOF), National Development Planning Agency (BAPPENAS), and the Ministry of Home Affairs (MOHA).

Geographical Location Regional
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Business Opportunities
Consulting Services

The project will require 8 international consultants for a total of 48 person-months on an intermittent basis.

(i) Lead Consultant and Project Coordinator (24 person-months) will take overall responsibility for coordinating and managing other consultants' work and their participation in executing the ADB entry strategy, including close coordination with ADB climate change adaptation specialist.

(ii) 3 technical consultants (4 person-months each) will be responsible for disaster risk assessment, disaster risk financing feasibility and disaster risk financing solution design, and will have specialist knowledge in disaster risk financing and disaster risk management within the Asia-Pacific region

(iii) 3 technical consultants (3 person-months each) will be responsible for production of necessary hazard assessment, mapping and loss modeling that will be required to design DRF solutions

(iv) 1 technical consultant (3 person-months) will be responsible for developing a public private partnership (PPP) strategy for disaster risk financing-climate change adaptation going forward.

Responsible ADB Officer Benson, Charlotte
Responsible ADB Department Sustainable Development and Climate Change Department
Responsible ADB Division SDGG
Executing Agencies
Asian Development Bank
6 ADB Avenue,
Mandaluyong City 1550, Philippines
Concept Clearance 20 May 2010
Fact Finding 30 Sep 2010 to 06 Jan 2011
Approval 23 May 2011
Last Review Mission -
PDS Creation Date 25 May 2010
Last PDS Update 20 May 2014

TA 7812-REG

Approval Signing Date Effectivity Date Closing
Original Revised Actual
23 May 2011 - 23 May 2011 31 May 2014 31 May 2015 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 2,000,000.00 0.00 0.00 0.00 0.00 2,000,000.00 23 May 2011 1,701,446.48

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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Phase 1 Activities

cambodia railway
August 2013 Padang briefing

As part of Phase 1, initial risk profiling and city selection were completed in Indonesia and the Philippines, the two project countries. A preliminary risk assessment was completed in December 2012, yielding a list of eleven candidate cities for the Philippines and twelve for Indonesia. More in-depth risk profiling was undertaken by January 2013, yielding a short list of five cities for each country. In February 2013, the Government of Indonesia selected Manado and Padang as pilot cities and the Government of the Philippines selected Davao City and Marikina.

Phase 1 wrap-up workshops were held in Manila and Jakarta in February 2013, involving focal point representatives from each city, together with the implementing agency and other government agencies. The Phase 1 Final Report was issued in April 2013. Project briefings for national and city focal point officials and other interested city departments were held in the pilot cities in August 2013.

Phase 2 Activities

cambodia railway
Participants in the April 2014 Manado training workshop

cambodia railway
Participants in the April 2014 Davao training workshop

In February 2014, project team members refined and agreed on the Phase 2 work-plan during the inception meeting at ADB headquarters in Manila. Work commenced immediately to organize the first of three training workshops in the pilot cities. The purpose of the workshops was to introduce fundamental risk modeling and disaster-risk financing (DRF) concepts to key city officials responsible for disaster risk management (DRM), budget and fiscal affairs, and city administration. Workshops were held in Marikina and Davao on 8 and 10 April 2014, respectively, and in Padang and Manado on 21 and 24 April 2014. Key national government officials, including representatives from the implementing agencies, attended the workshops. The training sessions helped identify each city's DRM priorities, such as what key hazards and classes of exposure initial DRF efforts should focus on. Data requirements necessary for the risk modeling work were also explained.


No tenders for this project were found.

Contracts Awarded

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Procurement Plan

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