When a drought hits, when floodwaters rise, or when storms tear through villages, it is often the most vulnerable households that are left with nothing but damage, despair and debt. For decades, the absence of accessible, rapid finance has meant that climate disasters not only destroy crops and homes, but futures.
The Global Shield against Climate Risks was created to change that outlook. Launched at COP27 by the V20 Group of Finance Ministers and the G7, the initiative works with governments, international institutions, and community organisations, to increase financial protection systems and ensure help arrives when it’s needed most to those who need it most. Today, the Global Shield is no longer an idea—it is a solid system of country-led processes, accompanied by regional risk pools and innovative financing solutions that are truly strengthening resilience. By increasing and improving access to pre-arranged finance, the Global Shield supports countries in effectively responding to climate-related risks and loss and damage and better financially protecting vulnerable people and communities.
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Deepening financial protection efforts through In-Country Processes: Progress on the ground
At the heart of the Global Shield is the recognition that every country has its own unique development and climate risk context and should thus take ownership of developing and enhancing its financial resilience strategy and safety nets against climate shocks. The past 12 months have seen nearly half of the Global Shield beneficiary countries submit their request for Climate and Disaster Risk Finance and Insurance (CDRFI) support, each reflecting national priorities and specific areas where support is needed, informed by lessons learned from recent disasters.
Country stories of resilience from design to delivery: building momentum on financial solutions deployment
Costa Rica’s National Emergency Fund (FNE) is in place to respond when frequent disasters strike, but there is a recognition that financial resources are ultimately insufficient to provide necessary disaster relief. With climate shocks becoming more frequent, the country wants a fund that is not just reactive but resilient. That’s why part of its request to the Global Shield is about redesigning the FNE so it can stand the test of time, securing a steady pipeline of resources that can be used for recovery. This effort also reflects Costa Rica’s commitment to putting in place protection for its natural resources—the heart of the country and the backbone of its economy—so that ecosystems, agriculture, and tourism can continue to thrive even as climate pressures mount.
Risk layering, in this context, is intended not as an empty concept but as applied reality: providing the Ministry of Finance with the technical support needed to make strategic decisions that strengthen the country’s financial resilience and safeguard its people and key sectors from climate shocks.
At the same time, Costa Rica is looking to broaden access to insurance for sectors like agriculture, fisheries, and tourism. The country is developing parametric insurance schemes with subsidised premiums in the short term so that small farmers and fishers can afford coverage. It is also improving risk data, building technical know-how, and boosting insurance culture. These efforts aim to ensure that when the next flood or drought hits, payouts flow quickly and families aren’t left scrambling. It’s a push to turn financial protection into an everyday safety net rather than a last resort.
Few countries illustrate the cost of climate vulnerability as starkly as Pakistan. The 2022 floods displaced over eight million people and caused billions in damage, and yet the financial tools to respond were either missing or too slow. The urgency of building stronger protection systems became even clearer in 2025, when devastating floods hit again killing a thousand people and displacing more than two million. Between August 1 and September 16, over 4,000 villages, 220,000 hectares of rice fields, and 1.8 million acres of farmland were inundated. According to NASA’s Earth Observatory, as much as three-quarters of the country’s farmland may have been underwater. Early estimates suggest the loss of rice and other crops could reach USD 3.5 billion, heightening concerns for food security.
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Against this backdrop of staggering loss, Pakistan has laid out a bold plan with support of the Global Shield for the deployment of risk-layered risk financing solutions—from an Anticipatory Action Fund that releases money before a crisis, to parametric insurance for fast payouts, and even exploring catastrophe bonds to tap private capital. Together, these instruments are designed to protect both government budgets and vulnerable communities when climate shocks hit.
The Global Shield Financing Facility (GSFF) is playing a key role in helping Pakistan chart a path toward greater financial resilience. In March 2025, the World Bank’s Board of Directors approved USD 102m in financing for the Resilient and Accessible Microfinance (RAM) Project, which aims to enhance access to microcredit and support the financial resilience of the microfinance sector and its borrowers, particularly in the face of climate-related shocks. At the heart of GSFF’s support is also the establishment of the Climate Risk Fund (CRF), a wholesale financing vehicle that, in total, provides USD 105m in contingent liquidity for eligible microfinance providers whose borrowers are impacted by a qualifying flood. Nearly 1.9m people are estimated to benefit from these instruments over the project’s five-year span. By June 2026, the CRF is expected to be further reinforced by a parametric insurance backstop, which will protect the fund’s capital against severe shocks.
The government has also prioritised setting up a CDRFI implementation cell—a permanent institutional anchor that will steer the country’s risk financing investments. This cell will support coordination of risk-layered financial instruments that Pakistan has outlined in its Global Shield request. By coordinating everything from sovereign insurance to micro-level protection, the cell is designed to ensure that finance reaches the right people, at the right time, and through the right channel. Over time, this structure could help Pakistan not only respond to climate disasters more effectively but also build trust among vulnerable communities who have often been left waiting for help that came too late.
In Senegal, the financial vulnerabilities exposed by climate change are top of mind for policymakers. In this light, the country has adopted a new National Strategy on Disaster Risk Finance with the support of the World Bank. Building on the national strategy, the Ministry of Finance’s Request for Support to the Global Shield lays out four clear priorities. First, it wants institutions and communities to be more resilient — meaning the State itself needs better financial protection so the focus can be placed on supporting recovery, rather than finding emergency funds. Next, recognising that different places face different risks, Senegal is keen to establish financial protection mechanisms that reflect local realities — so, for example, targeting vulnerable groups in specific territorial hubs including local authorities.
Third, the Request emphasises strengthening financial protection for economic actors and households across the country. That might mean insurance or contingency funding for farmers whose crops fail, or schemes that cushion small businesses from extreme weather. Fourth, Senegal wants to improve its climate risk governance: better data systems, stronger institutions, more coherent regulation. It’s about ensuring that the right people have the right information (for example, early warning, flood maps, risk models) and that there’s a system in place to act on it — not just talking about disasters, but being able to forecast, prepare, finance, and respond to it. For Senegal’s families, fishermen, farmers, shopkeepers and local councils, this could make the difference between rebuilding and being pushed deeper into vulnerability.
While the Global Shield is currently designing a coherent support package to address the Request systematically, a first crucial line has already been provided. The Global Shield Solutions Platform (GSSP) is working through the African Risk Capacity Limited (ARC Ltd.) to strengthen national capacity to manage and respond to flood risks. ARC Ltd., in collaboration with the ARC Agency, is currently developing a sovereign-level flood insurance product and undertaking a comprehensive product assessment phase covering capability development, modelling, technical design, and contingency planning.
In parallel, ARC Ltd. is designing a meso- and micro-level flood insurance solution to promote an inclusive insurance approach. Under the Global Shield, GSSP will support the finalisation and uptake of the national flood insurance policy by ARC, assess the domestic insurance sector’s ability to share flood risk, and advance flood hazard modelling across the main risk types – runoff, groundwater rise, and river overflow. The work will also include quantifying the value of key assets exposed to flood risks in priority zones, defining appropriate risk transfer parameters to protect flood-vulnerable households identified in the National Single Registry (RNU), and providing support for premium payments.
The Global Shield Financing Facility (GSFF) awarded a USD 200,000 technical assistance grant to support Senegal in implementing its national DRF strategy. Implementation of the DRF strategy will be closely aligned to the support package developed under Global Shield. Moreover, a feasibility assessment for a national public asset insurance programme, which will be linked to existing maintenance and repair funds, will cover potential risk transfer options and premium financing sources.
The Gambia’s location along the Atlantic coast makes it especially exposed to rising seas, floods, and coastal erosion. For communities around Banjul and the River Gambia, these risks are not abstract—they are annual crises that wash away livelihoods. Due to a changing climate, the risk landscape has also seen increasing drought risks and a rise in windstorms. Under the Global Shield, early action support was provided by GSSP, through the purchase of a drought cover from ARC Ltd. with much-needed premium support.
As a result of the ever-shifting risk outlook, The Gambia’s Global Shield request puts a strong emphasis on creating a comprehensive disaster risk finance strategy. This includes strengthening its National Disaster Fund, linking it with adaptive social protection (ASP) systems, and ensuring that when money is needed, it’s there.
In this regard, Global Shield Financing Facility’s Steering Committee endorsed a USD 10 million GSFF grant to develop two CDRFI instruments in The Gambia that will strengthen the financial resilience of the country’s social protection system. The creation of a sub-window within a national contingency fund dedicated to emergency cash transfers following climate shocks will allow an estimated 775,000 climate-vulnerable individuals to benefit from rapid financial assistance. This will mean quick and direct support for women farmers, fishers, and low-income families, when floods or storms hit.
In addition, the grant will fund the country’s first national DRF strategy, which currently includes the following parameters: defining government contingent liabilities in the event of identified priority hazards; defining the CDRFI instruments to cover these contingent liabilities in a risk-layered approach.
The launch of an Inclusive Insurance Market Development Committee is one of the most forward-looking aspects of The Gambia’s request. The idea is to move beyond the outdated 2003 Insurance Act and introduce modern frameworks that truly serve those most at risk. This new committee would unite government, insurers, regulators, and development partners to identify and close gaps in the insurance market, creating the enabling environment needed for transformational change. Alongside modernising regulation, the country aims to build technical capacity for innovative products such as parametric insurance for floods and windstorms, while expanding protection to livelihoods where tourism meets coastal erosion. Scaling inclusive insurance by leveraging remittances, a prominent component of the country’s economy, will ensure the safeguarding of the most vulnerable people and communities.
In Malawi, where changing rain patterns and more frequent floods and droughts aren’t just predictions but lived experience, many farmers and low-income households are one bad season away from crisis. While Malawi has made strides — buying its first drought insurance via the African Risk Capacity back in 2015, rolling out microinsurance pilots, and scaling up social protection schemes — gaps still exist. The data often lacks granularity, modelling is done superficially at a high level, and there isn’t enough local input. For instance, flood models aren’t validated at the district level, and historical records of disasters are patchy, making it hard to know just how many people and assets are exposed. Also, awareness among rural communities about what insurance or disaster finance tools exist is low; farmers are often forced to sell livestock or pull children from school when disasters strike, when pre-planned financial protection is not in place.
Under its Global Shield support, Malawi wants to get its National Disaster Risk Management Fund and the National Climate Change Fund fully up and running — not just on paper, but with enough capital, clear rules, and operational procedures that work at local and district levels. It also aims to integrate risk transfer tools like microinsurance and sovereign drought insurance into social protection programmes. For example, through the expansion of the Social Cash Transfer Programme (SCTP) both vertically (more money per recipient in shock times) and horizontally (more households) when disaster strikes. The proposal includes strengthening electronic payment systems, updating registries to include climate vulnerability data, and using mobile money and community savings groups to reach remote rural areas. All this would mean that when the rains fail or floods sweep through, there’s not just aid, but a system that is fast, reliable, and inclusive for the deployment of financial help.
Support from the GSFF ensured that women benefited from adaptive social protection. For instance, the aforementioned national cash transfer programme guaranteed women’s participation in the system’s governance and enabled record-fast payouts, reducing disbursement time from six months to one month. Drought-triggered payouts reached around 330,000 people in the 2025 financial year, with women-headed households prioritised in the targeting process.
In addition, the GSFF Steering Committee approved a new USD 10m grant for Malawi, which is expected to finance additional investments in risk transfer instruments to backstop the social protection fund and to enable dynamic inclusion of beneficiaries. More recently, Malawi joined the second phase of the World Bank’s Regional Emergency Preparedness and Access to Inclusive Recovery (REPAIR) Program, which is supported by a GSFF grant. Once preparatory work and capacity building is completed, this is expected to enable the country to access contingent financing and reserves through the Regional Climate Risk Fund.
Resilience in action: Ghana’s Global Shield payouts
The past year has shown how Global Shield support packages can translate policy to action—and the impact is already being felt on the ground.
In Ghana, when prolonged dry spells threatened harvests in 2024, the country received two drought insurance payouts totalling roughly USD 3 million from the African Risk Capacity (ARC), supported through premium support by the Global Shield. Disbursements like these are vital to strengthening the government’s ability to address the needs of affected farmers and vulnerable households. As Ghana’s Ministry of Finance put it, the payouts were “not only a lifeline” for farmers and their communities at the peak of hardship, “but a testament to the importance of disaster preparedness”, showing that pre-arranged finance can deliver help quickly, predictably, and with dignity.
The payouts also help instil confidence in Ghana’s broader disaster risk financing strategy, demonstrating to both citizens and international partners that the country’s systems work. For local governments, having funds flow rapidly through ARC’s insurance payout show the value of embedding insurance into national planning and encouraging greater alignment with social protection schemes. For the Global Shield, this is a proof point: the right mechanisms don’t just deliver cash—they help shift entire systems from crisis management to bolstered resilience.
Other tailored support packages are close to completion. Each represents not just a financial instrument, but a promise that climate shocks will no longer undo decades of progress overnight.
These stories show a shift: from siloed, piecemeal aid responses to systematic, pre-arranged financing that empowers governments to act fast and save lives.
Keeping Gender Equality and Social Inclusion at the centre of Global Shield interventions
Many climate finance systems still overlook the very people they aim to protect and the bottom line is that any efforts are ineffective without addressing these inequalities. In this vein, the Centre of Excellence on Gender-Smart Solutions (CoE), an initiative operating under Global Shield, aims at advancing gender-responsive CDRFI. Through its Technical Advisory Facility (TAF), the CoE has provided governments, regulators, and financial institutions with tailored assistance, including gender gap analyses, action plans, and capacity development to embed gender and social inclusion into CDRFI systems.
Moreover, the TAF has also taken up gender-related components outlined in the country requests submitted to the Global Shield. Costa Rica, for instance is taking steps to ensure that its financial protection systems are equitable and inclusive. As part of its Global Shield support package, the country has hosted two training sessions led by the Centre of Excellence on Gender-Smart Solutions. These built on recommendations from the gender analysis conducted by Oxford Policy Management (OPM) on behalf of the CoE, which identified key barriers women face in accessing and using pre-arranged financial protection instruments.
These sessions—one engaging rural women leaders during the National Forum of Rural Women and another targeting insurers and regulators—aim to build awareness, strengthen technical capacity, and embed gender considerations into financial protection instruments. By investing in gender and social inclusion training, Costa Rica is ensuring that future risk financing and insurance solutions respond to the specific needs of women and vulnerable groups, helping to build resilience that truly leaves no one behind.
The CoE will also address the topic of mainstreaming gender and social inclusion in CDRFI at the COP30 Side Event: Making Climate Risk Finance Work for Women and Communities in the Pacific, which will be held at the Moana Blue Pacific Pavilion on 19 November. This session will highlight real-world examples of gender-responsive approaches from the Pacific region, discuss opportunities for regional collaboration, and provide a platform for dialogue among Pacific policymakers, climate finance stakeholders, and practitioners.
Scaling impact through Regional Risk Pools
The Global Shield, through the Global Shield Solutions Platform is also strengthening regional solidarity by supporting the work of Regional Risk Pools (RRPs). In April this year, a joint grant of EUR 4.7 million was signed to boost the capacity of regional risk pools – African Risk Capacity Ltd. (ARC Ltd.), Southeast Asia Disaster Risk Insurance Facility (SEADRIF), Pacific Catastrophe Risk Insurance Company (PCRIC) and Caribbean Catastrophe Risk Insurance Facility (CCRIF SPC). This joint request builds on and operationalises the Memorandum of Understanding signed by the RRPs with GSSP in 2022, marking a significant step forward in strengthening collaboration among the RRPs and reaffirming their shared commitment to financial resilience and sustainable growth.
Why does this matter? Because RRPs allow countries to share climate risks across borders, lowering costs and ensuring that when cyclones, droughts, or floods strike, nations are not left on their own.
For climate-vulnerable countries, RRPs are transformative in helping governments manage the financial impact of climate disasters. They provide a financial buffer against disasters that is predictable, fast, and collective, helping countries avoid the vicious cycle of debt and delayed aid. By investing in education and research, technical capacity, and the development of pre-arranged financing solutions, the Global Shield is strengthening and complementing the work of RRPs, helping countries move toward more sustainable disaster finance and enabling focus on timely relief and recovery.
The Pacific is an example of how the Global Shield operates at both national and regional levels. Through the GSSP, support will be provided to three Pacific Island Countries (PICs) to develop country-specific Requests for Support that strengthen national financial protection against climate disasters.
At the regional level, GSSP is also supporting PCRIC to enhance its service offering and expand coverage across the region. With this support, PCRIC is advancing education and awareness on disaster risk financing, conducting demand studies for potential new insurance products and upgrading its risk modelling capacities. PCRIC is also assisting its member countries in developing national contingency plans and facilitating premium support for some of the world’s most climate vulnerable countries. Together, these efforts aim to embed financial protection not only within governments but across entire economies.
Leveraging the country-led model for Loss and Damage finance
The Global Shield is carving out an important role in the wider loss and damage finance architecture, showing how a country-led model can accelerate access to funds and make them work where they are most needed. While traditional disaster relief remains essential, the Global Shield complements it by pairing pre-arranged finance with initiatives such as V20 Loss and Damage Funding Program, supported through its Financing Vehicle – the V20’s Joint Multi-Donor Fund (JMDF).
One of the clearest examples is in Ghana, where the Akosombo Loss and Damage Funding Program (AkoLAD) was launched in 2024 as part of the country’s Global Shield support package. Supported by the JMDF, AkoLAD is designed to restore physical and livelihood assets as well as community infrastructure for families who lost homes, crops, or livelihoods to the intense precipitation triggered Akosombo dam disaster. It is not just about immediate relief, but about helping households rebuild quickly, reducing the risk that short-term shocks cascade into long-term poverty. Other countries are watching closely: AkoLAD is the first program of its kind under the Global Shield and a potential template for future national loss and damage programs.
The Global Shield is also scaling this model in the Pacific, where the Pacific Loss and Damage Funding Program (PacLAD) will align with Global Shield processes in Fiji, Tonga, and the Marshall Islands. Backed by JMDF resources, PacLAD aims to provide a lifeline to communities already facing existential threats from sea-level rise, floods, droughts and cyclones. Together, AkoLAD and PacLAD show that grant-based loss and damage finance can be tailored to different contexts and compounding risks.
In April, the Global Shield made a strong statement at the First Annual High-Level Dialogue on “Strengthening Response(s) to Loss and Damage through Complementarity, Coherence and Coordination”, convened by the Fund for responding to Loss and Damage (FRLD). At that event, Global Shield Secretariat’s Co-Director, Nilesh Prakash stressed the need for coherence across financing streams, greater coordination among multilateral funds, and the recognition of pre-arranged finance as part of the loss and damage toolkit. He positioned Global Shield as a ready collaborator—offering its country-led architecture, technical platforms, and financing vehicles as an operational partner for FRLD. By bringing its models, relationships, and momentum directly into such high-level fora, the Global Shield is actively helping to shape how loss and damage funds will function in practice.
Looking Ahead
The Global Shield’s proof of concept—showing that financial protection systems can be country-led, responsive, and effective – is now at a point for truly scaling impact through its various tailored support packages.
The implementation efforts from Costa Rica, Ghana, Malawi, Pakistan, Senegal and The Gambia, already demonstrate the difference that pre-arranged finance makes. Germany’s and other donors’ new funding commitments to the Global Shield are a further testament of the trust in and impact of pre-arranged finance. Families keep their children in school, farmers keep their land, and governments can protect lives with dignity.
The Global Shield is stepping up as a bridge between country-led efforts and global loss and damage finance, making sure that vulnerable states have both voice and access in the emerging architecture, including through its membership of the Santiago network. Earlier this year, the Global Shield Secretariat made a formal submission to the Fund for responding to Loss and Damage, proposing how the in-country processes, gap analyses, and approved support packages structured under the Global Shield could inform FRLD pipelines of Global Shield beneficiary countries. The submission emphasised how Global Shield support mechanisms, from social protection and insurance to contingency finance, can complement grant-based loss and damage funding, rather than compete with it.
As more countries finalise their Request for Support triggering the disbursement of financial support to regional and national systems and programmes, the Global Shield is turning promise into reality: while climate disasters continue to occur, they need not become humanitarian catastrophes, as readily-available pre-arranged financing solutions are put in place to safeguard the most vulnerable people and communities.