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PRESS RELEASE March 19, 2019

World Bank Announces $90 Million to Strengthen Mozambique’s Resilience to Natural Disaster

WASHINGTON, March 19, 2019 — The World Bank approved today a $90 million grant from the International Development Association (IDA) in support of the government of Mozambique’s Disaster Risk Management (DRM) and Resilience Program. This financing will support the implementation of the government’s second DRM master plan, which seeks to improve financial protection against natural disaster, including the operationalization and capitalization of the recently established Disaster Management Fund; strengthen disaster preparedness and response; and build climate resilience into vulnerable education infrastructure.  

“As we approve this financing, my thoughts go to the families of those who perished during the cyclone Idai and the flooding season in the center of Mozambique. We will ensure that $9 mllion of this financing be made available for emergency as soon as the project becomes effective,” noted Mark Lundell, World Bank country director for Mozambique. “This program seeks precisely to strengthen the capacity of the government to respond quickly and build more resilience in the communities for future climate hazards.”

Evidence shows that the poor tend to bear the brunt of natural hazards prompted by climate change as they are often the least prepared and have limited financial capacity to cope. It is estimated that the program will directly benefit a total of 3,360,000 people. This includes women and other vulnerable groups, as well as children who will benefit from school retrofitting.

Mozambique exposure to climatic shocks is made worse by the effects of climate change, which highlights the importance of strengthening the country’s financial resilience. Without changes in climate and disaster risk management and financing policy, climate change is expected to cause economic damages of up to US$7.4 billion during the period 2003–50 in Mozambique.“Indeed, the negative impact of economic and disaster-related shocks is exacerbated, among other things, by limited fiscal space to respond quickly and effectively to these shocks,” added Michel Matera, World Bank senior urban specialist and the project’s task team leader.

Public resources allocated ex-ante for emergency response and recovery have systematically been significantly lower than the funds needed to cope with catastrophic events. The program will seek to maximize innovative financing approaches such as incentivize the government to purchase sovereign risk transfer products from the insurance and capital markets to manage the financial impacts of disaster shocks. The government could thus leverage up to US$120 million of private sector capital to support the financing of disaster response in Mozambique.

The total funding for the program is $132.27 million, of which $90 million is provided by IDA; $6 million is from the Global Risk Financing Facility (GRiF); and $36.27 million are Government of Mozambique’s counterpart funding.

* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 75 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.5 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $18 billion over the last three years, with about 54 percent going to Africa.

* GRiF was launched in 2017 under the G20. It seeks to strengthen the financial resilience of developing countries to protect poor and vulnerable people and livelihoods against the risks arising from climate change and natural hazards by developing and introducing risk financing and insurance solutions.


Rafael Saute
(+258) 21482300