The Centre for Disaster Protection, an independent organisation working to strengthen the way the global system finances responses to climate and disaster shocks, has published new analysis showing that pre-arranged disaster risk finance has expanded rapidly worldwide, while the poorest and most fragile countries continue to receive only a small fraction of the total.
According to the Centre for Disaster Protection, this sharp increase signals a growing international focus on putting financing in place before crises strike, particularly as climate impacts intensify and humanitarian and development budgets become more constrained.
The Centre notes that pre-arranged financing is increasingly seen as a way to ensure faster, more reliable responses when disasters occur, reducing delays and uncertainty for governments and affected communities.
However, the Centre for Disaster Protection emphasises that the benefits of this growth are not shared evenly. Its analysis shows that in 2024, low-income countries and countries affected by fragility and conflict each received less than 7 percent of total international pre-arranged financing.
The Centre for Disaster Protection highlights this as a clear indication that access to financial protection remains limited for those facing the greatest risks, with affordability and eligibility continuing to act as major barriers.
The Centre for Disaster Protection also finds that payouts from pre-arranged financing rose significantly in 2024, more than doubling to USD 879 million and reversing a downward trend that had persisted since the peak of COVID-19-related responses in 2020. The Centre attributes most of these payouts to World Bank Catastrophe Deferred Drawdown Options, pointing to the growing importance of contingent credit instruments in the overall landscape of disaster financing.
At the same time, the Centre for Disaster Protection reports that support for pre-arranged financing from development partners increased only modestly in 2022 and 2023, rising by 6 percent to USD 889 million. This represented roughly 1.2 percent of total crisis financing. The Centre stresses that funding directed to low-income countries remained particularly limited during this period, even as climate and disaster risks affecting these countries continued to intensify.
As defined by the Centre for Disaster Protection, pre-arranged financing refers to crisis funding that is approved in advance and automatically released when clearly defined trigger conditions are met. The Centre explains that by securing finance ahead of disasters, governments are better positioned to act quickly, reduce losses, and protect vulnerable populations when shocks occur.
Now in its third edition, The State of Pre-Arranged Financing for Disasters 2025 is authored by Michèle Plichta, Senior Researcher at the Centre for Disaster Protection, together with Zoë Scott, consultant, and Darshni Nagaria, Senior Researcher at the Centre. The Centre for Disaster Protection brings together data that has previously been fragmented and difficult to access, drawing on information from multilateral development banks, regional risk pools and humanitarian partners.
According to the Centre, the report offers the most detailed and up-to-date overview available of how much pre-arranged financing is in place, which countries and regions benefit most, and where significant gaps remain. The Centre for Disaster Protection also notes that recent growth has been driven largely by a sharp increase in contingent loans, particularly from the World Bank and the Inter-American Development Bank, while regional risk pools and catastrophe bonds continue to play an important supporting role.
Colin Bruce, Centre for Disaster Protection Board Member and Co-Chair, commented: “PAF reached an all-time high of USD 9.4 billion in 2024, with growth across all country groupings and types. But low-income countries and fragile and conflict-affected situations still have the smallest share of pre-arranged financing, and more should be done to support the most vulnerable communities to prepare for and address crisis risks. As we’ve seen in countries hit by recent shocks, having finance ready to flow when disaster strikes can underpin proper planning and help families and businesses recover far more quickly.
“While financial resources are not the only requirement, Hurricane Melissa underscores how essential it is to have funding in place to support effective planning and rapid recovery for families and businesses.”
Kimberly Gire, Centre for Disaster Protection Board Member and Co-Chair, noted: “This year’s findings give us the most comprehensive and up-to-date picture yet of how pre-arranged financing is working at a global level. There is unquestionably good news here, with growing momentum behind more proactive approaches to disaster risk. But the report also surfaces challenges. We call on the global community to continue to scale up international pre-arranged financing, improve accessibility and affordability for LICs and FCSs, and strengthen transparency from all actors.”
Michèle Plichta, Centre for Disaster Protection Senior Researcher and report Lead Author, added: “By consolidating previously inaccessible data, this report aims to bring greater transparency and accountability to the international financing system; an essential step towards ensuring timely, equitable and dignified protection when crises strike.”
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