The United Nations Capital Development Fund (UNCDF), the India-UN Partnership Fund, the United Nations Office for South-South Cooperation (UNOSSC) and the Fiji Government announce the official launch of the 'Scaling Climate and Disaster Risk Financing Framework and Parametric Insurance in Fiji' project. This initiative refines and expands coverage of the parametric insurance product that was first launched in 2021. It aims to strengthen Fiji’s financial resilience against climate change and natural disasters.

The project, supported by a generous funding of approximately FJ$1.6million [~US$700,000] from the Government of India, through the India UN Development Partnership Fund, managed by the United Nations Office for South-South Cooperation, will be jointly implemented by UNCDF and the Fiji Government over the span of 18-months.

While launching the project in Tavua, Hon. Prof. Biman Prasad, Deputy Prime Minister and Minister for Finance, Strategic Planning, National Development and Statistics said: “The Fiji Government understands the urgent need for innovative solutions to safeguard vulnerable segments of our communities such as women, persons with disabilities, smallholder farmers and our social welfare recipients, against the escalating threats posed by climate change,”

“To further ease the burden on vulnerable segments, the Government has retained the policy of keeping the premiums on all climate and disaster risk parametric insurance products VAT-free. This is expected to provide financial relief to these households and increase access to the product. In addition, as a government, we have set a target to include a minimum of 2,000 social welfare recipients under this scheme to broaden the safety net and build resilience across the country.”

This new initiative builds on the successes and lessons learned from the 'Climate Disaster Risk Financing Framework and Parametric Insurance (pilot) Project', which equipped thousands of households and communities with tailored Climate Disaster Risk Financing Instruments (CDRFI). This includes the Pacific’s first parametric insurance product, offering vital support against cyclonic winds and heavy rainfall.

The scale project ambitiously aims to cover a minimum of 5,000 households, roughly 25,000 individuals, for the next cyclone season, increasing the coverage by more than double from year one.

The High Commissioner of India, representing the India-UN Development Partnership Fund, said: "India’s approach to development partnership is completely demand driven and has a strong focus on high impact community oriented projects. The project to scale up Climate and Disaster Risk Financing Framework and Parametric Insurance in Fiji along with partner UN agencies showcases India’s steadfast commitment to assisting the most vulnerable communities across the world, on the front line of climate change.”

“India’s well-established parametric insurance solutions, particularly for crops and livestock farmers, will serve as valuable resources for Fiji. Through this partnership, we are not only sharing expertise but cultivating enduring friendships that will strengthen our collective ability to address the challenges of our times."

Fiji, faces annual challenges from cyclones and floods, leading to substantial economic losses. Low-to-moderate income households, farmers, and women bear the brunt of these disasters, often resorting to drastic measures to cope financially.

The 'Scaling Climate and Disaster Risk Financing Framework and Parametric Insurance in Fiji' project will focus on five key areas:

1. Customer-centric Products and Services
2. Strengthening and Leveraging Digital Solutions
3. Reaching More Women
4. Awareness and Information Refreshers
5. Learning, Knowledge, and South-South Cooperation

UNCDF, with its technical prowess in index insurance, digital finance, and market ecosystem development, will lead the project, deploying strategic de-risking instruments grants, loans, and guarantees.

To ensure the relevance, accessibility, and sustainability of the parametric insurance product, UNCDF will engage and collaborate closely with a wide array of public and private stakeholders. Through extensive consultations with grassroot level organizations, farmers, and rigorous research efforts, the project will implement initiatives that not only meet the immediate needs of the community but have long-term sustainable impact on Fiji's resilience against climate change and disasters caused by natural hazards.

Mr. Dirk Wagener, the UN Resident Coordinator for Fiji, Solomon Islands, Tonga, Tuvalu, and Vanuatu, said: “The UN emphasizes the need for a Pacific region whose people and communities are more resilient to the ‘negative impacts of climate change, climate variability and disasters.’ This is a strategic priority for us, and we are firm and resolute in our commitment to making this a reality. UNCDF’s work in this project, underlines this priority by scaling the development of accessible, affordable, and practical climate insurance solutions.”

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