+

Financing Post-disaster Recovery and Reconstruction

Sudhir KumarRecovery and Disaster Risk Reduction Specialistsudhir.ise@gmail.com

+Objective

An overview of mechanism to finance post-disaster recovery and reconstruction

+Understanding recovery

IFRC- Recovery: Process that results in people’s lives returning

to normal in a way that they will be more resilient to future disasters.

- Early recovery: Process of people’s lives returning to normal in the immediate aftermath of a disaster. Include assistance in the earliest stages of response in conjunction with relief, ... providing the basis for longer-term recovery.

UNISDR Restoration, and improvement where appropriate, of facilities, livelihoods, and living conditions of disaster-affected communities, including efforts to reduce disaster risk factors.

+

Recovery Financing

+

5

Recovery financing Source: World Bank &

et al

+Domestic Funding Sources Source:

World Bank & et al

Reallocation among the budget items from “less” to “more” disaster-hit sectors

Issue of sovereign reconstruction or development bonds

Levy of tax or surcharge for reconstruction

Introduction of policy incentives for private sector to share reconstruction costs

Voluntary civil society and private philanthropies’ contributions

Insurance

+External funding…contd. Credits or loans from multilateral development banks

Reallocation of existing portfolio of international development institutions

Multi-donor Trust Funds

Debt relief

Ex-ante contingent component of standard investment operations

Risk Insurance

Standby financing

Catastrophic Deferred Drawdown Option (Cat DDO)

+Disbursement options

On budget on treasury

On budget off treasury

Off budget off treasury

+

Case: IFRC’s recovery

financing

+ IFRC’s Key Financial instruments

Disaster Relief Emergency Fund (DREF)

Provide immediate financial support to Red Cross Red Crescent National Societies, enabling them to carry out their unique role as first responders after a disaster.

Available to all 187 National Societies, now has two main purposes:

Start-up funding to respond to large scale disasters – the “loan facility”

Funding for National Society responses to small- and medium-scale disasters and health emergencies for which no international appeal will be launched or when support from other actors is not foreseen – the “grant facility”.

Both the loan and the grant facilities are also used to help National Societies pre- pare for imminent crises.

+ IFRC’s Key Financial instruments

Appeal : Annual appeals and Emergency appeals

The plan is launched at the beginning of each year to fund programmes that meet an identified need that year. Programme updates and annual reports report on these activities.

Emergency appeals are issued during the year in response to disasters that arise - their timeline is flexible. Operations updates, interim narratives & financial reports and final reports report on these activities..