Finance and insurance solutions The Global Shield Financing Facility (GSFF)

The GSFF has the purpose of enhancing the financial resilience of vulnerable people in developing countries against natural disasters. It supports governments' efforts to develop and use pre-arranged finance mechanisms. This makes it possible to close coverage gaps and facilitate a quick, sustained recovery after a disaster.

The GSFF builds on key insights gained from the work of the GRiF:

1. Protect the real economy against climate shocks. Sustainable development not only requires action by governments, it also requires targeted measures to protect the real economy and especially micro, small, and medium enterprises (MSMEs). Giving MSMEs access to credit, including in the aftermath of a disaster, can help the local economy – and, thus, also the population – to recover more quickly.

2. Move from financial instruments to integrated financial strategies. Climate crises are often intertwined with other risks. This means that it is all the more important to develop long-term strategies that combine policy actions, effective financial instruments and appropriate delivery channels. This facilitates a quick, targeted and effective post-disaster response.

3. Complement financial instruments with policy reforms. The introduction and application of financial instruments can encourage political reform and incentivise efforts to strengthen adaptation and systematically build resilience.

4. Facilitate access to private risk capital for recovery financing. The level of resources needed to fund actions for climate change adaptation and recovery is enormous. In many countries, this exceeds the public resources available to the government. The GSFF's work therefore includes efforts to engage private capital in the right places to provide effective support to the recovery.

5. Engage with non-traditional partners. Numerous public, private and civil society players are active in the field of climate and disaster risk finance. The GSFF is working to coordinate this diverse range of actors and to assist partner countries in their efforts to implement suitable reforms and financial instruments and to encourage investment in risk mitigation.