Results-Based Financing Community of Practice

Discussion » E-Discussion #1: Disaster Risk Management And Climate Resilience: Opportunities and Challenges for Applying RBF Approaches

E-Discussion #1: Disaster Risk Management And Climate Resilience: Opportunities and Challenges for Applying RBF Approaches

Welcome to the RBF/OBA Community of Practice’s e-discussion on disaster risk management (DRM) and climate resilience! Over the course of the next three days, we will explore the opportunities to apply RBF approaches in DRM and climate resilience and discuss potential challenges associated with these approaches. We hope to have a lively, stimulating discussion and welcome your questions and comments. 

Hannah Michael Hughes and Julian Sosa Valles will be facilitating this e-discussion, making sure your questions and comments are seen by our topic specialists. Our e-discussants are Charis Lypiridis, an Infrastructure Specialist, and Tatiana Skalon, a Disaster Risk Management and Financing Analyst.


Discussion board guidelines:


  • Please be respectful of our e-discussants and other e-discussion participants.
  • Please be patient as we compile responses to your comments and questions, we will do our best to respond in a timely fashion.
  • There are no "bad" questions, so ask away!


Background materials:



  • Climate Change
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    Welcome to our E-Discussion on Results-based Financing and Disaster Risk Management. My name is Charis Lypiridis, and I am an Infrastructure Specialist with the Global Partnership on Output-Based Aid (GPOBA) at the World Bank Group. For the next two days, Tatiana and I will be discussing with all of you the use of Results-Based Financing (RBF) in disaster risk management (DRM) and climate resilience.


    We would like to explore the operational linkages between RBF and DRM, identify the benefits and challenges of applying RBF instruments in DRM operations and discuss opportunities for operational and knowledge-sharing partnerships


    Since this is the first time of such a discussion in our community, we prepared draft working paper and deck of slides on the applicability of RBF and OBA in Disaster Risk Management as reference that could inform and stimulate discussion.  The paper, which is still in draft format, was prepared with the support of Tatiana Skalon, a consultant on DRM operations who will join us in this discussion.


    With this first discussion we are aiming at an opportunity to share knowledge and best practices of applying RBF approaches in the DRM sector.


    On behalf of my all my colleagues at GPOBA, thank you very much for joining the discussion and we are looking forward to your active participation!


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    Thanks for this conversation, and for preparing the useful working paper on the matter. Two quick reactions.


    First, one important question is how to include disaster risk in RBF operations that are not specifically about risk management. How to make sure the water or electricity connections supported by RBF are well designed so that they do not create new vulnerability to natural hazards and climate risks? I guess the Independent Verification Agent could also review the resilience aspects of the outputs, and risk could be part of the definition of the "result". What is most important to build the resilience of populations to natural risk and climate change is to provide them with basic services (housing, water, energy, etc.) in a way that is risk-informed and resilient. Some of the most vulnerable people are vulnerable because they lack improved water or live in low-quality housing. If RBF could contribute to providing these individuals to *resilient* services and housing, it would contribute a lot to building resilient. One objective could be to ensure that all RBF interventions take risks in their design so that they do not create new vulnerability and contribute to resilience.


    A second issue is how RBF could contribute to projects directly targeted to risk management, like housing retrofit or flood protections. I think PforR have a key role to play for policies, as illustrated by the operation in Morocco. But OBA could also play a big role, especially in low-income areas. A series of opportunities may arise with the new possibility to do Cat-DDO in IDA countries. Cat-DDO are contingent credit lines: countries can access liquidities if they declare a state of emergency, so that they can finance the management of the crisis. But Cat-DDO needs to include a risk management prevention plan. If Cat-DDO are successful in IDA countries, we can expect the design of such plans in many countries, and much more action to reduce risk in low-income countries. When we get to the implementation of these plans, OBA could offer a way forward in very poor environment...

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  • I have a Product that would help reduce Global warming and advance climate change Programs. My product would replace Paint and wood used in the Development sector of Infrastructures.The product is also Water proof and Fire Resistance. Its Fire resistance element would help in avoiding large disasters caused by fire. The product would benefit the climate as it replaces wood usage leading to less cut down of trees. I am from a developing Country and it is hard to represent my idea. Please would some one advice me if my product would make a difference to Climate change and Disaster Management ?

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    Thank you so much for this initiative. I believe there are quite a few opportunities in this area. Here are some thoughts after a quick read of the paper, which have mostly to do with recovery:

    1. What is a subsidy? This is probably found in RBF and OBA literature somewhere, but I don't see it in the paper. To me, a subsidy is when public funds are used to induce a particular behavior that (ideally) produces a public benefit. Therefore, financing the replacement of a road after a flood is probably not a subsidy, but providing households with funds to raise the level of their houses would be. Central government funding local government DRM improvements might be a subsidy, but it might not be. The examples in the paper seem to mix up pure public funding and public subsidies sometimes.

    2. Business continuity. I think business continuity -- which is a form of preparedness -- is a huge potential area for OBA--for local governments, SMEs, and larger businesses on which recovery depends. Therefore, if the financial sector or the retail sector is back up and running after a disaster, you avoid the (all-too-common) situation where government is buying and distributing construction materials for shelter just because the local building materials place isn't open.

    3. Housing retrofitting and recovery. When government pays for people to repair or replace their housing, it is giving a subsidy in the sense mentioned above (housing is a private good, but risk reduction and recovery have public benefits), but sometimes it's a bad subsidy. The Philippine government distributed almost US$1 billion after Yolanda in unconditional housing subsidies. On the other hand, for a good example, look at the Rekompak program in Indonesia, which has used a type of OBA for housing recovery. The program can withhold a subsidy if the house is not built to specs, they detect any corruption, etc. See here and talk to the Indonesia team. The opportunity for GPOBA may be to help governments design and set up these programs in such a way that risk reduction results. As for retrofitting, this seems to me to be more difficult since so much of the housing of poor people is located where it shouldn't be, but I'd have to think more about it. Related to this, you should look at preventive resettlement as an area to consider. See In both retrofitting and recovery, you have organizational challenges because many governments have no way to deliver these programs, especially retrofitting.

    4. Lastly, just stylistically, I would reverse the sequence of the paper to start with the DRM discussion and some minimal definitions for OBA and RBF, followed by a more in-depth discussion of the aid concepts. Also add some graphics to illustrate the key concepts. I got a bit lost at the beginning!

    Enough for now -- thanks again! Priscilla Phelps

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  • Thank you all for participating on the e-discussion! Although we originally scheduled it for three days, we will like to continue the conversation for people that did not have a chance to collaborate, and for new members. Feel free to share with your colleagues.

  • Thank you everyone for such an interesting and engaging e-discussion!