The Asian Development Bank (ADB) and the Royal Norwegian Embassy have signed an agreement to further support Pakistan’s National Disaster Risk Management Fund (NDRMF) and strengthen financing for natural disaster risk reduction and preparedness in the country.
Under the agreement, the Government of Norway will provide $5 million to the NDRMF from the unused resources of the Pakistan Earthquake Fund, which would be administered by the ADB, an ADB press release said.
Secretary Economic Affairs Division Syed Pervaiz Abbas, Norwegian Ambassador Kjell-Gunnar Eriksen, and Director General of ADB’s Strategy, Policy, and Partnerships Department Tomoyuki Kimura signed the agreement.
The NDRMF was approved in 2016 to provide support in the immediate aftermath of disasters and to invest in disaster mitigation projects in Pakistan.
The ADB provided the initial financing through a $200 million loan while the Government of Australia contributed a $3.4 million grant. In 2018, the Swiss Agency for Development provided a $1.5 million grant and technical assistance via the secondment of disaster risk finance experts.
The NDRMF is currently fully operational, financing up to 70% of the cost of eligible projects that enhance Pakistan’s resilience to climate change and other natural hazards. It is structured as a nonprofit, government-owned company incorporated with the Securities and Exchange Commission of Pakistan.
In the last 15 years, Pakistan lost 85,000 people, including more than 26,000 children, and suffered substantial economic losses due to various natural disasters. The government as well as the affected people had limited capacity and resources to recover.
The NDRMF was established to finance projects aimed at mitigating disaster risks, while also developing and piloting disaster risk financing instruments in Pakistan for fiscal risk transfer.
Norway has offered significant financial and technical support to Pakistan, including in good governance, education, health, and emergency assistance. Norway worked with the ADB and other partners to help Pakistan swiftly rebuild and recover from the 2005 earthquake. Following the heavy floods which devastated large parts of Pakistan in 2010 and 2011, Norway provided more than $56.4 million in aid for flood-affected families and to restore basic services.
“The ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members, 49 from the region,” the press release said.