Developing Innovative Financial Instruments to Address Climate Risks for Agriculture and Natural Capital in Asia.

proposed

The proposed regional technical assistance (TA) aims to improve the adoption of innovative financial risk management products (FRMP) to enhance climate resilience in agriculture and food systems, and sustainable natural resource management. The TA will focus on Cambodia, Nepal, Pakistan, Sri Lanka, and Viet Nam. The TA will (i) conduct comprehensive assessments to understand root causes and constraints, and the strengths and weaknesses of FRMPs that have already been piloted; (ii) explore the feasibility of developing and deploying new FRMPs such as weather index insurance (WII) and credit guarantees; (iii) develop solutions, including improved designs of the existing piloted products, their distribution channels, and financial sustainability options to ensure scalability and sustainability; and (iv) share knowledge and build capacity of stakeholders on FRMPs to support innovative climate finance solutions. The proposed TA is aligned with Strategy 2030 Midterm Review and with Corporate Results Framework's strategic focus area on climate action and development results indicators 7 and 8 on increasing number of people with strengthened climate and disaster resilience, and food and nutrition security.