Under this program, funding will be provided through a grant of $53.1 million from the Asian Development Fund (ADF), as well as co-financing of $3.3 million from the Asia-Pacific Climate Fund. The ADF offers grants to the most vulnerable and poorest countries in the region, and from 2021 to 2024 has already helped 384,000 people escape poverty by creating around 500,000 jobs.
The statement emphasizes that both countries are exposed to risks from natural disasters, such as earthquakes and floods, while facing limited budgets and inadequate mechanisms for effectively managing these situations. "This multi-tiered financial approach will improve the financial readiness of the countries by utilizing two pre-developed ADB instruments that take into account various levels of disaster risk," the organization stated.
The program includes a disaster financing mechanism (CDF), which provides budget support in the event of medium-severity natural disasters and health emergencies, as well as disaster relief bonds (DRB), which are issued in international capital markets to ensure quick liquidity for states in the event of serious natural disasters.
Lea Gutierrez, ADB's Director General for Central and West Asia, noted that this program will help alleviate the fiscal burden on countries after natural disasters, including geophysical threats and extreme weather conditions.
"By combining policy reforms with strengthening institutional infrastructure and innovative financial solutions, the program will enable a shift towards preventive financing for emergency risks, thereby enhancing the financial resilience of both states," she added.
The program focuses on implementing strategic reforms, enhancing institutional capacity, and optimizing management to ensure a coordinated and transparent approach to disaster risk management and financing. It was created as part of ADB's technical assistance to develop a disaster risk management mechanism in the Central Asia Regional Economic Cooperation (CAREC). This ADB-supported program aims to foster cooperation among countries and partners to promote sustainable economic growth in the region.
The ADB is a leading multilateral development bank committed to inclusive, sustainable, and resilient economic growth in the Asia-Pacific region. By working together with states and partners on solutions to complex problems, it applies innovative financial tools and strategic partnerships to improve people's lives, create quality infrastructure, and protect the environment. The bank was established in 1966 and has 69 member countries, 50 of which are located in this region.
