ISLAMABAD: The Asian bank on Thursday approved a $200 million loan to strengthen Pakistan’s disaster risk management and support the National Disaster Risk Management Fund (NDRMF).
The NDRMF will reduce the socio-economic and fiscal vulnerability of the country and its population to natural hazards by prioritising and financing investments in disaster risk reduction and preparedness that have high economic benefits, taking into account climate change, as well as disaster risks and their impacts.
As part of the support, a $1m technical assistance grant has been approved for Capacity Building of Disaster Risk Management Institutions. The ADB will also administer a $3.3m grant provided by the Australian government.
“Pakistan is increasingly exposed and vulnerable to various natural hazards and climate change which pose a significant risk to the fiscal stability of the federal and provincial governments,” said Werner Liepach, ADB Country Director for Pakistan.
“The establishment and operationalisation of NDRMF will help reduce vulnerabilities to natural hazards and improve the fiscal management of disaster risks,” he said.
The government will pass on the ADB loan funds to the NDRMF as a grant, for on-granting by NDRMF to eligible implementing partners. The NDRMF will finance up to 70 per cent of the cost of eligible subprojects that will enhance Pakistan’s resilience to extreme weather events and other natural hazards.
The NDRMF will also enter into insurance arrangements to develop markets for the transfer of residual risks that cannot be mitigated.
According to the ‘Global Climate Risk Index’, Pakistan is one of the most affected countries by extreme weather events from 1995 to 2014. Increasing natural hazards have resulted in significant loss of life, economic damage, and the reversal of development gains.
These events severely impact the livelihoods of the poor and vulnerable, resulting in mass migration, trade and commerce disruption, and market destabilisation. The annual economic impact of flooding alone is estimated at $1.2 billion-$1.8 billion, equivalent to 0.5pc to 0.8pc of GDP.
The government’s disaster risk management policy and strategy have transitioned from a largely response-oriented approach to a broader focus on disaster risk reduction and preparedness. However, progress is limited by financing and capacity constraints.
The assistance will provide financial, technical, and capacity development support to NDRMF and is expected to contribute to the country’s increased and sustainable institutional and physical capacity to reduce the socioeconomic and fiscal impacts of natural hazards and climate change.
November 25th, 2016