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World Bank introduces new toolkit to help create world free of poverty in livable planet
The World Bank Group introduced a new comprehensive toolkit with an aim to create a world free of poverty on a livable planet.
The World Bank said “We work to make people better prepared for threats of any kind by sharing our expertise, building resilience, and insuring against risks.”
At the Summit for a New Global Financial Pact, World Bank President Ajay Banga said the toolkit aims at pausing debt repayments; redirecting financing; linking crisis preparedness and financing; backstopping development projects with private sector support, and building enhanced catastrophe insurance without debt.
The World Bank’s toolkit seeks to allow countries to focus on meeting the urgent needs of their people instead of on loan repayments, the World Bank Group will launch Climate Resilient Debt Clauses. These will provide a pause in debt repayments for the most vulnerable countries in times of crisis or catastrophe.
“We will start these new crisis debt clauses with the most vulnerable clients, and we intend to learn and work with all stakeholders to expand coverage,” according to a statement by the World Bank.
The World Bank Group will put in place a new rapid response option, offering all client countries the ability to immediately repurpose a portion of their lending portfolio for emergency needs when a crisis occurs – for example to redeploy undisbursed funds in longer-term infrastructure projects for immediate disaster response.
The bank also seeks to allow more countries to build emergency systems and have quick-disbursing finance available in times of crisis, the World Bank Group will increasingly link investments in prevention and preparedness with financing for catastrophe and crisis response support.
“We will also step up our expertise and analytical support available to every country to design a crisis preparedness and response financing strategy,” the bank said.
The World Bank Group will evolve its tools to more effectively support private sector clients in crisis preparedness and response. This will enable businesses to sustain operations and protect jobs, building resilience and long-term sustainability.
The Multilateral Investment Guarantee Agency is partnering with the private insurance industry through the Insurance Development Forum, a public-private partnership, to design an innovative parametric insurance product, and the International Finance Corporation has designed a private sector-led crisis response solution to support financial institutions in addressing the impact of natural disasters due to climate change.
The World Bank Group will build on its catastrophe insurance solutions such as Cat Bonds and give all countries the option of embedding catastrophe insurance into lending products. “Because not every country can afford this insurance, we will work with donors to make these products affordable for lower-income countries, including funds that can buy down insurance premiums. This will develop enhanced catastrophe insurance products that can provide resources for disaster-struck countries without adding to their debt.”
Across countries, and as a result of these measures combined, billions of dollars could be available for crisis response.