2024 has been an exciting year for the Global Shield against Climate Risks, as Global Shield countries continued to make headways in delivering and taking progressive steps towards implementing pre-arranged financing solutions. With the promise of a new year on the horizon, and the adoption of the Global Shield Ambition, the initiative continues to evolve towards a future of climate change resilience through country leadership and engagement, innovation and the strategic positioning of the Global Shield in the broader loss and damage financing architecture.
A Great Opportunity Unlocked
The V20 Group of Finance Ministers and the G7 launched the Global Shield at COP27 in Sharm El-Sheik back in 2022 to boost pre-arranged financing solutions for climate-vulnerable people and communities to better cope with climate and disaster risks in an effort to bolster financial resilience for those who need it most.
Two years on, and with around €350 million in committed funding for the initiative, the Global Shield is now active in 16 countries across Africa, Asia-Pacific and Latin America. Under the leadership of national governments, the Global Shield Secretariat coordinates the In-Country Process (ICP) and the ecosystem of actors working in national Climate and Disaster Risk Financing & Insurance (CDRFI) to develop robust protection packages that identify priority CDRFI solutions.
The commitment of governments and the inclusion of local stakeholders are cornerstones of the Global Shield ICPs, which make it truly unique. With countries driving the process, the Global Shield Secretariat, often in tandem with local partners, coordinates and facilitates platforms for dialogue and knowledge exchange, which then serve as a basis for comprehensive analyses and country diagnostics.
At the time of this blog post’s publication, 10 of 13 ICPs* were either in progress or completed, with 10 countries having hosted at least one in-country workshop. Of these, 3 are nearing completion of a Request for Support – Senegal, Costa Rica and the Pacific region – expected in Q1 2025. Ghana and Pakistan have already submitted their Request for Support.
A Major Milestone Achieved
In 2024, the Global Shield implemented its first risk transfer solution in Ghana. The Government of Ghana took proactive steps to better protect its agricultural sector against the risk of drought. The policy, designed to provide financial relief in the event of a drought, will enable the government to respond quickly and efficiently to support affected farmers and communities. Funds from the insurance pay–out will be directed towards safeguarding food security and stabilising the agricultural sector.
This outcome is a true testament to the coordinated, inclusive and tailormade effort by the Global Shield of convening Ghana’s Ministry of Finance and relevant local actors for concrete inputs on the country’s needs. The Global Shield’s ecosystem of stakeholders then comes into play. In this case, the African Risk Capacity (ARC) issued the drought insurance policy, with financing and premium support provided by KfW Development Bank on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the Global Shield Solutions Platform (GSSP), managed by the Frankfurt School of Finance & Management.
The Global Shield Financing Facility (GSFF) launched its programmatic window on adaptive social protection. Integrating financial tools with social systems ensures quick liquidity to support vulnerable populations, fostering sustainable and equitable recovery.
A Dynamic Year Bearing Fruit
At COP29, the Government of Pakistan also officially handed over its Request for Support to the Global Shield demonstrating the urgent need for the deployment of pre-arranged financing in the country that has sustained billions in climate-induced loss and damage. With steer from the Global Shield, the Ministry of Climate Change and Environmental Coordination (MOCC), in close collaboration with UNDP Pakistan, coordinated and facilitated the ICP in Pakistan. This resulted in several consultations at both provincial and federal levels with pertinent national and subnational stakeholders which informed the country’s Request for CDRFI Support.
In 2025, the Global Shield expects to complete several other country requests and likewise advance fit-for-purpose pre-arranged financing solutions through its key Financing Vehicles – the aforementioned GSSP, the Global Shield Financing Facility (GSFF), managed by the World Bank and the CVF-V20 Joint Multi-Donor Fund (JMDF).
Following the kick-off workshop in July, a second workshop was held in Senegal last month to identify the most urgent needs to strengthen resilience and financial protection against climate-related disasters in the country. Strengthening access to solutions for the most vulnerable in Senegal’s different regions, through cooperation with NGOs, enhancing financial support for flooding (e.g. for MSMEs in the urban context), and driving the comprehensive climate risk governance and regulation were some of the priorities highlighted by local stakeholders. Together with local partners, the Global Shield is now working towards finalising the analysis of financial protection gaps in the country, which will inform Senegal’s Request for Support to the Global Shield, expected to be submitted at the start of 2025.
The gap analysis is also being finalised in Costa Rica, after fruitful stakeholder consultations and two in-country workshops were held in 2024. Local stakeholders consider intersectoral dialogue vital to fostering sustainable CDRFI actions at national level and appreciate contributing to the development of Costa Rica’s Request for Support, which is expected in Q1 2025. The need for an increased access to education around CDRFI both at the institutional level and for the population as well as promoting access to effective solutions at macro-, meso- and micro-level, in particular for vulnerable groups were highlighted as key outcomes thus far. The streamlining, integration and implementation of gender into CDRFI solutions was also emphasised as vital.
Piloting a Regional Approach: Global Shield in the Pacific
The Global Shield is piloting a regional approach in the Pacific – namely in Fiji, Republic of the Marshall Islands, Samoa and Tonga. The region’s Small Island Developing States (SIDS) are some of the most climate-vulnerable countries in the world and pre-arranged financing solutions are vital to ensure disaster preparedness and financial resilience of their people and communities. An early win for the region includes Global Shield’s contribution to the Pacific Catastrophe Risk Insurance Company (PCRIC) via GSSP in 2024. This contribution allows PCRIC to offer their member countries premium support and thus increase accessibility and affordability of financial protection from the Pacific regional risk pool. The above-mentioned Pacific countries are in advanced stages of finalising their CDRFI support needs that will ultimately be packaged as a Pacific Regional Support Package, noting that some of the support needs will be best deployed nationally.
A New Cohort and a Year of Promise in Store
In April when the Global Shield Board approved a new cohort of five countries, The Gambia was one of those countries and has since made strides in accessing Global Shield support through the In-Country Process. The West African country, an established pacesetter in climate resilience held its first workshop in September, where a local multisectoral Global Shield Task Force of country experts was formed to guide further progress ahead of a planned second workshop in 2025.
Shortly afterward, Madagascar organised its first workshop with Global Shield support and the process is in full swing, with a stock-take and preliminary gap analysis already in the process of being developed. The collaboration with the Global Shield provides an opportunity to not only capitalise and strengthen already-existing mechanisms such as ARC insurance, but also to fill gaps in climate risk financing as advocated in the national disaster risk management strategy. The country-led process will continue into 2025 with a second workshop and the Request for Support submission foreseen for the first half of the year.
Bangladesh held its first in-country Global Shield workshop this week from 18-19 December, kickstarting consultations on gauging the country’s CDRFI gaps and priority needs and formally launching the Global Shield initiative in the country.
As part of its vision, the Global Shield also supports access to pre-arranged financing solutions for fragile and conflict-affected states (FCS). In this vein, the Global Shield has undertaken the kick-off of its ICP in Somalia, in partnership with the World Bank. The gap analysis in Somalia will build upon a recent diagnostic on disaster risk finance that identified entry points to strengthen Somalia’s resilience. While the ICP will seek to strengthen collaboration with humanitarian interventions, it will also focus on scaling up good practices, such as adaptive social protection.
Progress is also expected in Malawi, Peru, the Philippines and Rwanda, with the first consultations and/or workshops planned for Q1 2025.
Global Shield at COP29
As well as unveiling the Global Shield Ambition – a blueprint for enhancing climate resilience and tackling loss and damage via pre-arranged financing solutions – the Global Shield highlighted the critical role of pre-arranged finance in reducing loss and damage at COP29. During the high-level dialogue on Coordination and Complementarity for Funding Arrangements Responding to Loss and Damage, Co-Director Nilesh Prakash read out a formal statement reiterating the Global Shield’s commitment in supporting as an important funding arrangement in the emerging global loss and damage landscape. Alongside him, fellow Co-Director Dr. Astrid Zwick led the delegation in Baku, where the Global Shield featured on several side event panels, and presented a joint request from regional risk pools to strengthen collaboration.
Looking Ahead
Climate-vulnerable countries must be financially resilient and able to recover more quickly from climate-related disasters. The Global Shield’s unique approach guided by inclusivity, country ownership, complementarity, transparency and timeliness is bottom-up, multi-stakeholder and tailored. This ensures a paradigm shift in pre-arranged financing solutions – from crisis to risk management and ultimately to increased resilience.
* While the Global Shield is active in a total of 16 countries, there are a total of 13 ICPs. In the Pacific region, one ICP covers four countries.