Mexico City - The Global Facility for Disaster Reduction and Recovery (GFDRR), the World Bank, the UK Department for International Development (DFID), and the Centre for Global Disaster Protection, have launched a new Challenge Fund window to pilot the development of innovative risk financing mechanisms, and align global innovation with on-the-ground user needs.

Developing countries are often the hardest hit by natural disasters such as floods, cyclones, droughts and earthquakes, yet they are the most sensitive to the budget volatility caused by major catastrophes, and are least equipped to prepare for extreme events.

Financing is at the core of any disaster management action, whether risk reduction, preparedness, financial protection, or resilient recovery. Unfortunately, financing after a disaster is often long delayed, increasing the human impact.

“The application of new technologies could revolutionize financial mechanisms, for example by better targeting funds to vulnerable communities” said Francis Ghesquiere, Head of the GFDRR Secretariat. “These innovations include forecast based mechanisms that can fund early-action before a disaster strikes, or big data and machine-learning algorithms that can improve the speed at which we assess the impact of an event and accelerate payouts. The real challenge is bringing together the technical experts working on these approaches, with the experts implementing crises response programs, and at-risk communities in affected countries.”

This Challenge Fund will support projects that help bring these communities together and strengthen financial resilience in developing countries. This round is a partnership between the Department for International Development, the Centre for Global Disaster Protection, the Global Facility for Disaster Reduction and Recovery, and the World Bank’s Disaster Risk Financing and Insurance Program. It is launched in association with the program alliance of the InsuResilience Global Partnership. It builds on the success of previous rounds focused on risk identification.

As such, the Challenge Fund seeks to pilot novel approaches to support disaster and climate risk management in developing countries by encouraging “positive disruptive” innovation and non-traditional partnerships between technology institutions, academia, private sector, international organizations, NGOs and user groups.

Interested applicants will respond to challenges, including: implementation of early-action mechanisms into disaster risk financing (DRF) instruments, use of big data and machine learning to revolutionize DRF mechanisms, and application to largely untapped risks such as food insecurity. This Challenge Fund window will provide up to 5 successful projects with funding ranging from US$ 100,000-200,000 to design and implement ground-breaking solutions to address such challenges.

Details about the Challenge Fund and the submission portal can be found here.