TA-10363 PAK: Climate and Disaster Resilience Enhancement Program (Subprogram 1) - Firm on Disaster Risk Financing and Insurance (58054-001)

Objectives: The Climate and Disaster Resilience Enhancement Program (Subprogram 1) aims to enhance disaster resilience in Pakistan by facilitating the establishment and operationalization of a Disaster Solidarity Fund (DSF). The primary objective is to create a dedicated solidarity fund that acts as a countercyclical reserve mechanism, providing ex-ante funding post-disaster through the use of risk sharing and transfer instruments like insurance, reinsurance, and CAT bonds. This approach seeks to reduce reliance on ad hoc financial support, minimize the protection gap against disaster events, and support the National Disaster Risk Management Fund and the Ministry of Finance in developing risk transfer mechanisms through a diagnostic study. The implementation will include the engagement of international and national consultants over twelve months to develop business and operational models and ensure sustainable stakeholder engagement.