The role of disaster risk finance in tackling pandemic and epidemic risk
This note intends to shift the discussion on pandemic and epidemic risk finance to a practical approach about the benefits of applying a disaster risk finance (DRF) lens to new financial mechanisms as they are developed and deployed. It outlines key trends of financial flows toward outbreak response and identifies relevant emerging initiatives and opportunities to help governments scale up pre-agreed finance.
Currently, and as a result of the lessons learned from the covid-19 global response, contingent loans are the most common and sizeable form of pre-arranged financing available for health emergencies. Typically issued by multilateral development banks, they offer governments rapid access to relatively large amounts of loan financing when specific conditions are met, and if the country declares a state of emergency after the occurrence of a crisis.
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