WASHINGTON, June 6, 2019 —The World Bank Board of Executive Directors today approved a $70 million operation to help Malawi recover from Tropical Cyclone Idai.
The operation, referred to as Disaster Risk Management (DRM) Development Policy Financing (DPF), authorizes two grants to help tackle the economic and humanitarian costs associated with the impact of the cyclone. It will strengthen the institutional and financial capacity of the government to prepare for, and deal with future similar crises.
The first grant is a regular DRM DPF with upfront financing of $40 million from the International Development Association* (IDA) Crisis Response Window. This is part of a multi-pronged response to help government secure prompt financial support to respond to the impact of Tropical Cyclone Idai.
The second grant is a DRM DPF with a Catastrophe Deferred Drawdown Option (Cat DDO) of $30 million. This will be available in the event of future crises within three years of signing the grant, but renewable for a further three years. Drawing down from the Cat DDO will be triggered by a presidential declaration of a state of disaster according to the country’s laws, related with an occurring or imminent natural or health disaster.
“Our aim is to help strengthen Malawi’s resilience to climatic hazards so that economic gains made are not easily reversed by such shocks,” said Bella Bird, World Bank Country Director for Malawi. “Hence, alongside this operation, we will simultaneously provide targeted technical assistance to implement policies that strengthen disaster risk management and climate adaptation.” Technical assistance will be financed through programs funded by the Global Facility for Disaster Reduction and Recovery (GFDRR) and the European Union, in the framework of the Africa Caribbean Pacific–European Union Natural Disaster Risk Reduction Program, managed by GFDRR.
Through the DRM DPF with Cat DDO, Malawi will be implementing policies to strengthen the institutional framework and coordination mechanisms to advance their national disaster and climate resilience agenda. This instrument will also address resilience in physical developments and infrastructure; and strengthen adaptive social protection mechanisms and government financial capacity to respond to disasters.
Cat DDOs are relatively new financial instruments for IDA countries. The Malawi operation is the third Cat DDO in Africa after Seychelles and Kenya. Since 2008, the World Bank (IBRD/IDA) has approved 17 Cat DDOs for an approximate total value of $3 billion.
*The International Development Association (IDA) is one of the largest sources of funding for fighting extreme poverty in the world’s 75 poorest countries. IDA provides interest-free loans and grants to countries for projects and programs that boost economic growth, build resilience, and improve the lives of poor people around the world. Since 1960, IDA has provided more than $371 billion for investments in 113 countries. As an institution of the World Bank Group, IDA combines global expertise with an exclusive focus on reducing poverty and boosting prosperity in the world’s poorest countries. Learn more online: IDA.worldbank.org. #IDAworks”