Forecast-based Financing in the Red Cross Red Crescent Movement

1. Forecast-based Financing in the Red Cross Red Crescent Movement Mongolia, Early Action for Dzud February 2018 First FbF activation, Uganda. 2015

2. Objectives of this session • Increase understanding of the Forecast based Finance concept • Provide guidelines for National Societies starting to develop an Forecast based Finance mechanismfund Mongolia, Early Action for Dzud February 2018

3. What is Forecast based Financing? A mechanism that enable access to funding for early actionbased on credible forecast and in depth risk analysis

4. Forecast based Financing step by step

5. Risk Assessment or Analysis A comprehensive risk analysis is crucial to design Forecast based Financing triggers and to prioritize forecast-based actions. What are the critical risks that can be managed with an Forecast based Financing mechanism? Source: German Red Cross / Climate Centre, 510. 2018

6. Inventory of Forecasts Identification of Forecast: Analysis of all existing forecast at national and global level. What are the best forecasts we can use to trigger an Forecast based Financing mechanism?

7. Forecast based Financing trigger: Definition of Impact levels At which point a hazard becomes an event that is not manageable and produce severe human suffering? Source: German Red Cross / Climate Centre/ Peru Red Cros 2017

8. Why all this is important for Forecast based Financing?

9. What is Impact-based Forecasting? Impact-based forecasting focuses on what a hazard could DO in terms of consequences rather than forecasting only what a hazard could BE

10. Generate impact-based forecast intervention map It is the tool that will allow the national society to visualize when and where early action should be implemented

11. Selecting forecast-based actions What actions will reduce risks and help to prepare for a more effective response? Think Criteria!!!! • Consistent with Government Contingency Plans • Prevention/Mitigation of Impact and preparedness for response - • Scale • Practicality • Social acceptability • Value for Money • Relevance • Appropriate financing options • Efficiency

12. Forecast-based Actions in Mongolia • To prevent and mitigate the impact of Dzud in the most vulnerable herder communities, the Mongolia Red Cross Society implemented these forecast based actions: • Provide food for livestock • Cash transfers • Provide animal care kit Source: Mongolia Red Cross 2018

13. Early Action and National Society implementing capacity

14. Designing the Early Action Protocol Who will do what, when and how? What are the funds required to implement early actions?

15. Why Monitoring and Evaluation is important for Forecast based Financing interventions?

16. Implementing an FbF mechanism What is the purpose of M&E in FbF EAP? Quick Brainstorming!

17. FbF system design (trigger & EAP development) Where does M&E fit in the FbF project cycle? Monitoring of forecasts Evaluation Theory of Change to identify early actions 3. 1. Define results, indicators & data sources Collect evaluation data (?) Capture everything in an M&E Plan Evaluate achievement of results Danger level exceeded →Activation EAP implementation Accountability 2. Learning Monitor action implementation Collect evaluation data (?)

18. The benefits of Forecast based Financing: Bangladesh (2017) An FbF EAP was activated in Bangladesh in 2017 in anticipation of extreme river flooding. A rigorous impact evaluation was conducted and found a number of important benefits of FbF. • FbF intervention: distribution of unconditional cash grants • Key benefits:FbF contributed to • Greater household food security • Less psychosocial stress during and after the flood period • Reduction in high-interest debt accrual of vulnerable households

19. Scaling up and integrating Forecast based Financing into National Systems: Social Protection, an opportunity E.g. Brazil’s Bolsa Família provided in-kind and cash benefits to 162,000 families in 279 municipalities, within 10 days of the 2011 floods using its registry of beneficiaries and identification cards What is Social Protection? Set of policies and programs aimed at preventing or protecting all people against poverty, vulnerability, and social exclusion (for instance social safety nets: cash transfers, cash for work)

20. Social Protection and Forecast based Financing at national level Linking FbF with social protection can make better use of existing systems to protect people before disasters at scale

21. Considerations for Urban Forecast based Financing

22. Conclusions • The implementation of FbF in the Red Cross Red Crescentoffers the opportunity to protect the most vulnerable population to minimize the risk of disasters and prepare for effective response. • FbF needs to be integrated into the National Society Disaster Risk Management strategies and it should build up and be connected to contingency planning. • Enhancement the National Society capacities for early action is crucialto guarantee impactful forecast-based actions.

23. Thank you! For more information visit: www.forecastbasedfinancing.orgAnd: https://www.climatecentre.org/programmes-engagement/forecast-based-financing and FEDNET FbF section! Contact: fbf@climatecentre.org