By Favour Nnabugwu
Seven countries which are most vulnerable to climate change are to benefit from US$260.1million Global Shields of G7 of world powers
The first group of countries to benefit from the new program includes Bangladesh, Costa Rica, Fiji, Ghana, Pakistan, the Philippines, and Senegal.
The “Global Shield” mainly includes insurance coverage against damage to crops, buildings or business interruption
The new fund has been endowed with an amount of 260.1 million USD, of which 175.5 million USD come from Germany, 61.9 million USD from France (over three years), 10.3 million USD from Ireland, nearly 5.2 million USD from Denmark and 7.2 million USD from Canada.
This, money in specifically, is where catastrophe bonds and risk transfer to the capital markets are cited, particularly at the sovereign level, alongside risk pooling and development insurance.
Reinsurance capital and third-party capital could have a significant role to play in supporting the role out of Global Shield initiatives, through and alongside the World Bank facilitated Global Shield Financing Facility, as capacity requirements are going to be particularly significant if this is to become a meaningful initiative.
The German presidency of the G7 group of world powers and the 58 members of the club of countries most vulnerable to climate change (V20) have set up a “Global Shield” against climate risks.
The Group of Seven (G7) is an intergovernmental political forum consisting of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States; additionally, the European Union (EU) is a “non-enumerated member”.
This initiative was launched on 14 November 2022 at the COP27, which is being held between 6 and 18 November 2022 in Sharm El Sheikh, Egypt.
The new international structure aims at helping the populations most affected by climate change to cope with extreme events such as droughts and floods.