Climate Credit Kerala

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The southern Indian state of Kerala was hit by extreme rainfall in the 2018 monsoon, causing flooding and thousands of small and large landslides. It is said to be the worst flood in 100 years. The Government of Kerala believes that it is necessary to go beyond traditional approaches to reconstruction in order to be better prepared for future natural disasters and the foreseeable consequences of climate change. To this end, Kerala has undertaken an ambitious reform program as part of the Rebuild Kerala Initiative to realize the vision of a more resilient, green and sustainable Kerala. The proposed FC module is to support the envisaged reform efforts through reform financing (Policy Based Lending - PBL). This instrument supports the government's plans to implement structural and forward-looking reforms that are embedded in the Rebuild Kerala Initiative and a reform program currently being prepared by the World Bank. The overarching objective of the FC module is to improve the resilience of the state of Kerala to the future impacts of natural disasters and the consequences of climate change. The objective is to be achieved through political and institutional reforms in the two pillars (i) improving Kerala's institutional and financial capacity with a special focus on disaster risk and climate change management and (ii) mainstreaming disaster and climate resilience in critical infrastructure and services. The proposed accompanying measure is intended to provide substantive support for the further implementation of the reform agenda over a period of 2 years. The direct target group is the population of Kerala, who are affected by the impacts of climate change and recurring natural disasters. For this purpose, a policy-based loan of EUR 100 million (subsidized loan) and an accompanying measure of EUR 2 million will be made available.