Category 5 Storm Triggers Pacific Catastrophe Risk Insurance Payout
WASHINGTON, March 30, 2015 – The World Bank Group today announced that Vanuatu has received a US$1.9 million payout from the Pacific Catastrophe Risk Insurance Pilot, the first of several measures that will help the Pacific Island country recover from Tropical Cyclone Pam, which struck the Pacific Island country on March 13.
“We are deeply concerned for the people of Vanuatu in the face of devastation caused by Cyclone Pam,” said Franz Drees-Gross, Country Director for the World Bank in Timor-Leste, Papua New Guinea, and the Pacific Islands. “The insurance payout will support Vanuatu in financing urgent relief and recovery efforts, as we continue to work with the government to identify priorities and offer assistance through various financial mechanisms.”
A delegation from the World Bank Group visited Vanuatu last week to conduct an initial scoping mission to assess the impact of the cyclone and the government’s emergency response needs, including immediate financial needs beyond the insurance payout.
In addition, to help restore Vanuatu’s tourism sector, a World Bank technical team will arrive in Port Vila on Tuesday, March 31, to negotiate an IDA credit of up to US$59.5 million for the Vanuatu Aviation Investment Project. IDA, or the International Development Association, is the World Bank’s fund for the poorest.
“The effect of Cyclone Pam on our country has been catastrophic – destroying years of development and investments,” said Maki Simelum, Vanuatu’s Minister for Finance. “The need for a cohesive and coordinated approach to recovery and reconstruction is immediate and we look forward to working with the development and aid agencies to ensure this is managed.”
The Category 5 storm caused widespread damage on 22 of 83 islands in the archipelago, affecting more than half of the population, or about 166,000 people. Initial reports from the country’s national disaster management office estimate that about 65,000 people need temporary shelter, amid severe damages to buildings as well as power and communications networks.
The Pacific Catastrophe Risk Insurance Pilot reduces the financial vulnerability of Pacific island countries to natural disasters and is made possible through the collective efforts of the Government of Japan, the World Bank Group and the Secretariat of the Pacific Community.
A grant from the Government of Japan helped cover the Government of Vanuatu’s insurance premium. This grant was provided through the World Bank Group Program for Mainstreaming Disaster Risk Management in Developing Countries, coordinated by the World Bank Group’s Disaster Risk Management Hub in Tokyo, which was established in partnership with Japan in 2014.
This payment is the second payment under the Pacific Catastrophe Risk Insurance Pilot launched in January 2013. Tonga was the first country to benefit from a payout in January 2014 after Cyclone Ian.