The Global Shield against Climate Risks has supported climate-vulnerable communities of Pacific Island Countries (PICs) through a €10 million contribution by the German Ministry for Economic Cooperation and Development (BMZ), dedicated to the Pacific Catastrophe Risk Insurance Company (PCRIC).
This support is provided through the Global Shield Solutions Platform (GSSP), a financing mechanism under the Global Shield.
PICs have become increasingly vulnerable due to the worsening effects of climate change, exposing them to a range of natural disasters such as tropical cyclones, droughts, and floods. This grant agreement aims to bolster the resilience of PICs by collectively reducing risks and ensuring rapid access to funds during emergencies.
With funding from the GSSP, PCRIC can offer premium support to member countries, thereby improving access to pre-arranged financial protection through the Pacific risk pool.
The primary objective is to ensure the availability of funds, enabling governments to swiftly initiate relief efforts in the aftermath of a disaster.
Dr. Annette Detken, head of the Global Shield Solutions Platform, emphasises, “Pacific Island Countries are among the most climate vulnerable in the world, with related damage estimated at around 10% of their GDP, or USD 1 billion annually. As climate hazards intensify across the Pacific region, the significance of climate disaster risk finance and insurance becomes increasingly evident.”
“By providing parametric insurance products, PCRIC assists PICs and their vulnerable populations in delivering reliable and timely fund disbursement and facilitates the inflow of disaster response capital to the region in the aftermath of a disaster, “ Detken adds.
Shiri Krishna Gounder, Permanent Secretary for the Ministry of Economy Fiji, states, “Fiji appreciates the partnership between the Global Shield Solutions Platform and PCRIC, which will bolster our efforts in disaster risk financing. With increased financial support, we can better prepare for and respond to the adverse impacts of climate change, safeguarding our vulnerable communities and fostering resilience.”
Saoleititi Maeva Betham-Vaai, CEO for Ministry of Finance, Samoa, highlights, “Samoa is grateful to have a regional institution like PCRIC dedicated to disaster risk finance. However, we recognize that PCRIC alone cannot address all our disaster risk finance needs. Comprehensive protection requires a blend of financial instruments and strategies.”
H.E. Kilisitina Tuaimei’api, CEO for Ministry of Finance, Tonga, underscores, “Tonga’s unwavering support for PCRIC comes from our firsthand experience of the benefits. We have been the highest recipient of payouts following multiple cyclones. Our enduring partnership symbolizes our shared commitment to building a resilient future for Tonga’s communities by accessing DRF instruments such as PCRIC’s parametric insurance, to supplement our fiscal balances when a disaster strikes.”
