Strengthening Climate and Disaster Risk Finance Capacity in Bangladesh

To build resilience against climate change, the United Nations Development Programme (UNDP), through its global Insurance and Risk Finance Facility (IRFF), organized a three-day training workshop on Climate and Disaster Risk Finance (CDRF) on 18-20 April in Cox's Bazar.

The event brought together representatives from government ministries, financial institutions, specialized agencies, and the UN system to enhance their capacity in managing climate and disaster-related financial risks more proactively and strategically.

Bangladesh, one of the most climate-vulnerable countries in the world, often responds to disasters after they strike, relying on emergency aid. This reactive approach can be slow and expensive. The workshop focused on shifting this approach towards smarter, anticipatory planning, integrating risk financing into national budgets and development planning.

During the workshop, participants explored how climate and disaster risks, such as floods, cyclones, sea-level rise, and droughts, require a range of financial instruments, from reserve funds and contingency credit lines to various forms of insurance. A core lesson was the understanding of risk as a combination of hazard, exposure, and vulnerability, with emphasis on reducing vulnerability through investments in early warning systems, resilient infrastructure, and social protection programmes.

One of the key messages from the training was that disaster risk financing is not the responsibility of a single ministry. Effective coordination among the Ministry of Finance, Ministry of Disaster Management and Relief, Ministry of Agriculture, Local Government Division, and the Planning Commission is essential. Joint efforts can ensure a timely response, protect vulnerable communities, and maintain economic stability during crises.

The workshop introduced practical tools such as indemnity and parametric insurance, catastrophe bonds, and post-disaster loans. Participants also learned about the Global Shield initiative, led by the G7 and V20 countries, which aims to close the financial protection gap for vulnerable nations. Aligning such global mechanisms with Bangladesh's National Adaptation Plan (NAP) could strengthen the country's resilience financing architecture.

Through interactive group work, participants began drafting a Climate and Disaster Risk Finance (CDRF) strategy tailored for Bangladesh. They identified major risks, mapped institutional roles, evaluated existing financial tools, and explored new funding options. Emphasis was placed on transparency, stakeholder engagement, and strong monitoring frameworks.

A key takeaway from the workshop was that building financial resilience demands more than just technical fixes it calls for inclusive governance, cross-sector collaboration, and sustained political commitment. Moving forward, it will be crucial to ensure that financial tools are not only in place but are also accessible, rapidly deployable, and capable of delivering timely support when disasters strike.

This initiative marks a critical step toward equipping Bangladesh with the knowledge, tools, and partnerships necessary for climate-smart, inclusive, and coordinated disaster risk financing. As climate threats intensify, such efforts will ensure that the country is better prepared and more resilient in the years to come.