Regional : Pacific Disaster Resilience Program

Public sector management / Public expenditure and fiscal management

The program will improve the resilience of the participating countries to disasters triggered by natural hazards. It will support policy actions in disaster risk management (DRM), and provide participating Asian Development Bank (ADB) Pacific developing member countries (DMCs) with a source of contingent financing for timely disaster response, early recovery, and reconstruction activities. The attached TA will support DRM in participating DMCs, and assess the options for, and potential costs and benefits from, a collaborative multi-country mechanism to provide contingent financing in the event of disasters triggered by natural hazards.

The program provides Pacific DMCs with a source of financing for response, early recovery, and reconstruction activities for disaster events caused by all types of natural hazards. To support the development of effective and comprehensive DRM strategies and programs at the country level, the policy-based loan and policy-based grant modality will be used to agree on disaster resilience-related policy actions for each participating DMC. These policy actions will strengthen the resilience of institutions and communities in the participating DMCs. The proposed provision of financing contingent on a disaster is similar to the contingent credit facility provided to the Cook Islands in 2016. The attached TA will support and monitor progress toward achieving the governments' long-term DRM goals included in a program monitoring framework, and explore options for regional collaboration around contingent financing and a potential permanent regional contingent savings mechanism.

The participating DMCs--Samoa, Tonga, and Tuvalu--face similar DRM challenges, and will benefit greatly from a regional approach under which good practices are shared. The program will support coordination and cooperation both between Pacific DMCs and with development partners on financing arrangements, policy reform discussions, and regional TA programs. The TA activities will include regional sharing of experiences and lessons on DRM, particularly on post-disaster financial management.

The program will complement existing disaster risk financing instruments available to Pacific DMCs, including annual contingency budgets, national disaster funds, parametric disaster insurance, and traditional indemnity insurance. Its unique features are as follows: (i) it can make a payment quickly and use the funds flexibly with no additional requirements, beyond national public financial management requirements, to track and report on expenditures; (ii) the amount that can be released is significant in terms of immediate response needs; (iii) the amount is not dependent on any assessment of loss or measure of the intensity of the natural hazard; and (iv) funds are available for disaster events triggered by any type of natural hazard. The program is aligned with the Sendai Framework for Disaster Risk Reduction 2015-2030 and the Framework for Resilient Development in the Pacific.

Resilience to climate change and disasters, and disaster preparedness, response and recovery strengthened

Strengthened disaster risk management in participating countries.

Strengthened regional collaboration on disaster risk financing.

Strengthened enabling framework for disaster risk financing.

The loan and grant agreements with the Government of Samoa were approved on 18 December 2017. Both the loan and the grant projects became effective on 27 December 2017.

The loan and grant agreements with the Government of Tonga were approved on 15 December 2017. Both the loan and grant projects became effective on 25 December 2017. Cyclone Gita hit Tonga on 12 February 2018, causing widespread destruction on the main island of Tongatapu, and the neighboring island of 'Eua, and the government declared a state of emergency for the whole of Tonga. ADB released to the Government of Tonga the amount of $6 million for cyclone recovery.

The grant agreement with the Government of Tuvalu was approved on 15 December 2017 and the grant became effective on 1 March 2018.

The disaster risk management specialist and team leader, and the disaster risk financing expert for the attached TA have been mobilized.