ObjectivesFund scope
Pacific Small Island Developing States (PSIDS) are highly vulnerable to natural hazards that include earthquakes, volcanic eruptions, tsunamis, tropical cyclones, storm surges, drought, and other events. Their occurrence leads to significant budget reallocations and diversion of funds in the South Pacific from critical health, education, and economic development programmes. Annual disaster-related direct losses have soared to $284 million US dollars and the frequency and severity of disasters are on the rise thanks to climate change, disrupted economic, development, and social progress, and threats of mass displacement and forced migration.
Although many PSIDS governments developed national and sub-national disaster risk management (DRM) plans, none have integrated a climate disaster risk financing (CDRF) strategy with administrative frameworks to better manage economic losses following a disaster. This poses a serious problem for SDG acceleration while also challenging blue/green economy growth and safeguarding people, businesses, and industries against financial ruin. The lack of micro- and medium-level climate risk insurance or CDRF instruments for individuals, small businesses, local organizations, and cooperatives means stakeholders and members of the public at large turn to a handful of less attractive options such as borrowing, draining savings, postponing investments, or becoming dependent on government assistance.
Theory of change
To address existing financing and protection gaps at micro, meso, and macro levels, the United Nations leaned into South-South and triangular cooperation to partner with change makers and innovators on PSIDS vulnerability and the absence of regional CDRF mechanisms in Fiji, Samoa, the Solomon Islands, Tonga, and Vanuatu. Equipping governments and communities with tailored CDRF strategies and solutions makes them better positioned to address the effects of climate change.
The PICAP builds resilience via four workstreams:
- Enabling policy and regulation: Increasing risk awareness and understanding toward preparing the enabling environment for introducing CDRF tools, including parametric (index based) insurance and creation of CDRF strategies.
- Open digital payments ecosystem: Using digital links for products and payment delivery.
- Inclusive innovation: Developing and deploying inclusive market-based insurance and blended financing instruments for micro and meso levels, using mobile and digital technologies.
- Empowered customers: Educating individuals and consumers on the benefits of using insurance and other risk financing tools as part of a DRM strategy.
Improving financial preparedness of Pacific Island governments and communities augments their capacity to handle disasters and being financially ready results in faster post-disaster recovery, rebuilding of livelihoods, and improved resilience. Making market based parametric insurance and other CDRF instruments widely available also assists communities and governments in being ready to ward off socioeconomic ruin and build back better in the wake of climate-induced or natural disasters.
> $55M 
$55M - $25M
$25M - $5M
< $5M
