The Foreign, Commonwealth and Development Office (FCDO), which leads the UK’s diplomatic, development and consular work globally, has committed an additional £3 million to the Technical Assistance Facility (NDF TA Facility), operated by the Natural Disaster Fund (NDF), a blended risk transfer vehicle designed to mitigate climate-related challenges and build resilience for low-and-middle-income countries.
The NDF has been successfully sponsored by the government since 2018. From 2020, the NDF has shared risks with private sector reinsurer Hannover Re. Now, though, MS Amlin has joined the NDF as an additional private sector risk capacity provider.
This additional funding will allow the NDF to support the development of another round of 10-15 high-impact risk transfer projects seeking to help climate-vulnerable communities and businesses until 2030.
The move reflects the FCDO’s long-term commitment to enhancing climate resilience in the Global South, and aims to achieve wider engagement in the Climate and Disaster Risk Finance and Insurance (CDRFI) landscape.
The FCDO, alongside Germany’s development bank KfW on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), were the founding public partners of the NDF in 2018 and 2020, respectively, with an initial capitalisation of approximately US$70 million in risk capacity.
Baroness Champan, the UK’s Minister for Development, said, “The recent payouts of $662 million to Jamaica in response to Hurricane Melissa shows the value of pre-arranged finance both for the immediate response but also for reconstruction and longer-term stability.
“That is why the UK is working with the multilateral development banks and insurance industry to scale pre-arranged finance and strengthen disaster responses. This will help develop insurance solutions that work for people in climate-vulnerable countries – driving more confident investment, resilient financial systems, and stronger, more stable growth.”
Angus Kirk, Chief Executive Officer, Global Parametrics, commented, “This additional funding from the FCDO is a tribute to the continued successes of the NDF. Climate and natural catastrophe risks have a disproportionate impact on low-and-middle-income countries.
“A significant lack of insurance coverage in these countries hinders their ability to recover and build resilience against catastrophic climate events and is a significant constraint to their economic growth and prosperity. Public-private partnerships, such as between the NDF, the FCDO and the KfW, play a crucial role in combining expertise and resources to help foster global knowledge sharing, innovation and long-term resilience-building efforts.”
