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DRF Instruments

This page provides an overview of DRF instruments for selected Pacific countries. The overview will be expanded to further countries in the future. Additional DRF instruments and flexible funding sources will be added as well. This may include budget reallocations; debt financing; in-kind support and donations from bilateral partners, the United Nations system, and the Red Cross; emergency and reconstruction project financing from multilateral development bank; and disaster-specific funds.

DRF by country and instrument

This section provides an overview of available DRF from main DRF instruments in selected Pacific island countries. Additional DRF instruments as well as more comprehensive analysis, including by disaster response phase and disaster type as well as comparisons with estimated damages and losses for various return periods, may be added in the future.

DRF instrumentSolomon Islands (SI$ million)Tonga (T$ million)Vanuatu (VU million)
LikelyMaximumLikelyMaximumLikelyMaximum
Contingency10.020.01.05.01,159.01,159.0
Emergency budget lines68.968.9--311.8311.8
National emergency fund--2.42.4--
ADB CDF84.884.824.224.2574.0574.0
World Bank CatDDO42.442.448.548.51,148.01,148.0
PCRIC insurance--7.516.7--
ADB APDRF8.525.42.47.3114.8344.4
World Bank CERC8.542.42.412.1114.8574.0
Total223.1284.088.4116.23,422.34,111.1

Note: Estimates are based on an exchange rate of 8.5 and a nominal GDP of SI$14.5 billion (equivalent to US$1.7 billion) for Solomon Islands; an exchange rate of 2.4 and a nominal GDP of T$1,438 million (equivalent to US$594 million) for Tonga; and an exchange rate of 115 and a nominal GDP of VU148 billion (equivalent to US$1.3 billion) for Vanuatu.

The methodology is currently under development. Once finalized, details will be provided here and the DRF data table and chart updated. 

DRF instruments by country

This section provides an overview and rapid assessment of available DRF instruments across countries using the progress scale of the Pacific Resilience Standards. Detailed information and related documentation on specific instruments by country is available in the respective DRF Country Manual. The list of countries and DRF instruments will be expanded over time, and DRF instruments potentially be organized by categories/types (e.g., risk retention and risk transfer instruments), beneficiaries (e.g., national government, development agencies, households), and/or DRM phases.

The benchmarking does not imply that every country necessarily needs to have access to all DRF instruments. While each instrument has benefits, it also incurs costs, including by absorbing limited public administration capacity. Further, instruments do not necessarily come with additional resources, as some instruments are rather “channels” for government or development partner resources. Country needs and characteristics of individual DRF instruments should therefore inform the choice and funding levels of DRF instruments. This includes the consideration of general (i.e., non-emergency) public financial management challenges relevant to the specific instrument. For example, alternatives could be to allocate additional emergency funds to a pooled budget contingency, emergency budget lines, and/or a national emergency fund. If a specific instrument is used in a country, it is important to make sure it functions well, including government staff awareness on access, use, and accountability requirements.

Budget contingencies enable governments to quickly access resources to respond to urgent needs. However, funds are often not earmarked for disasters and health emergencies but can be used more broadly for unforeseen needs. This can result in funds already having been depleted when an emergency happens. Further, as allocations are part of annual budgets, these generally lapse at the end of a fiscal year.

In line with Article 103 (2) of the Constitution that provides for authorisation of expenditure in advance of an appropriation, Section 58 of the Public Financial Management Act 2013 establishes a Contingency Warrant that can be issued for an urgent and unforeseen need that requires funding, which is not included in the original or a supplementary budget and cannot be delayed without detrimental effects to the public interest. An amount of SI$20 million (equivalent to about US$ 2.4 million) is allocated in the approved recurrent budget estimates for fiscal year 2024 as the Contingency Warrant Provision.

The Public Finance Management Act 2013 (2020 Revised Edition) defines the Contingency Fund as a budget vote of up to 5 percent of the Tonga Government Fund for expenditure that (a) could not have reasonably been expected to have been included in the estimates of any vote, (b) becomes essential to the carrying on of programme operations, and (c) cannot be met through the re-allocation of financial resources from within a programme allocation or from within the total allocation to the relevant ministry programmes. The budget allocation for fiscal year 2024-2025 is T$5.0 million (equivalent to about US$ 2.1 million).

Section 34C of the Public Finance and Economic Management Act 1998 (2020 Consolidated Edition) establishes a Standing Appropriation for a declared state of emergency or a financial emergency of up to 1.5 percent of the annual budget appropriation that the Council of Ministers may authorize after an emergency if urgency prevents the passing of a supplementary appropriation bill by Parliament. At a total budget appropriation of VT 77,261 million for fiscal year 2024, the Standing Appropriation of 1.5 percent amounts to VT 1,159 million (equivalent to about US$ 9.8 million). 

Emergency budget lines are allocations specifically earmarked for emergencies. As part of annual budgets, the allocations generally lapse at the end of a fiscal year.

The Solomon Islands Government Approved Recurrent Estimates include disaster preparedness & relief budget lines. In fiscal year 2024, the following budget lines are included for a total of SI$ 68.9 million (about US$8.2 million):

HeadMinistryDivisionAmount (SI$)
03Agriculture & Livestock Development001 Central Headquarters & Administration300,000
032 Agriculture Quarantine50,000
05Education & Human Resources Development001 Central Headquarters & Administration1,100,000
06Finance & Treasury150 Economic Reform60,000,000
09Health & Medical Services217 Social Welfare80,000
202 National Reproductive & Child Health95,000 (budget support)
10Infrastructure Development001 Central Headquarters & Administration197,000
14Office of the Prime Minister & Cabinet300 Prime Minister & Cabinet Administration147,699
16Police, National Security & Correctional Services333 Royal Solomon Islands Police Force5,441,275
21Commerce, Industries, Labour & Immigration393 Immigration61,250
22Communication & Aviation001 Central Headquarters & Administration100,000
30
Women, Youth and Children’s Affairs001 Central Headquarters & Administration115,136
32Environment, Climate Change, Disaster Management & Meteorology571 National Disaster Council1,200,102
Total68,887,462

The Tongan budget does not include emergency budget lines. Earmarked allocations for emergencies are channelled through the National Emergency Fund (NEF). That said, in selected fiscal years over the past decade, allocations for the NEF have been used as emergency budget lines rather than being transferred into the NEF. 

Vanuatu maintains an ‘Emergency Fund’ budget line under the Department of Finance and Treasury (DoFT) within the Ministry of Finance and Economic Management (MFEM). Section 42 of the Disaster Risk Management Act 2019 mandates a guideline for the use of the Emergency Fund, including procedures for urgent requests of funds and types of emergencies or disasters for which the fund could be utilized. Such guidelines are currently not in place.

In addition, the national budget includes ministerial emergency-related budget lines but allocations are small.  

Available DRF in fiscal year 2024:

  • Emergency Fund budget line under DoFT, MFEM:
    • Non-earmarked allocation: VT 300 million (about US$ 2.5 million)
    • Earmarked allocation: VT 700 million (about US$ 5.9 million) for post-disaster cash transfers for households affected from Tropical Cyclones Judy and Kevin. 
  • Ministerial emergency-related budget lines: Total of VU$ 11.8 million (about US$ 100,000) 
    • Ministry of Agriculture: VU$ 5.6 million
    • Ministry of Education: VU$ 0.5 million
    • Ministry of Health: VU$ 5.7 million

Section 17 of the National Disaster Council Act 1989 created the National Disaster Council Fund as a Special Fund under Section 100 (2) of the Constitution. However, while the NDC Fund account is in place, guidelines have not been developed and the fund has not received an appropriation since 2008 when a special audit found that funds were misused and often diverted away from disaster response activities (PCRAFI, 2015). As of 2024, the NDC Fund is used only for standing imprest of the NDC and for transactions under the Building Safety and Resilience in the Pacific project. 

The National Emergency Fund (NEF) is set up by the Emergency Fund Act 2008 and has since been used for several emergency responses. Detailed guidance on application, selection, use, and accountability for funds is provided in the NEF Guideline from April 2023. Separate financial reports and audits required by the act have not been prepared and published to date, but opening and closing balances are included in the Financial Statements of the Government of Tonga (latest available is for fiscal year 2021-2022 as of October 2024).  

The Disaster Risk Management Act 2021, which received Royal Assent in June 2023, includes additional provisions for the NEF (Sections 14, 31, 32, 36, 48, 54, 56, 81, 99, 100, 105, 122, and 127). These will need to be reflected in an amended Emergency Fund Act and an update of the NEF Guideline, which are planned for early 2025. 

Available DRF in fiscal year 2024-2025: 

  • Opening balance: Data not available
  • Budget allocation: T$ 2.4 million (about US$ 1 million)

Vanuatu has currently no ring-fenced emergency fund that can be rolled over from fiscal year to fiscal year.

The Government of Vanuatu is planning to establish an Emergency Recovery Fund under the Disaster Recovery and Resilience Bill that has been approved by Cabinet and is awaiting Parliament approval as of October 2024. 

The option of establishing the Emergency Fund as a ring-fenced fund—rather than as the current lapsing emergency budget line—could be considered, which would allow accumulation of funds in years where no major disaster occurs. Additional account management and financial reporting and audit requirements as well as political economy factors would need to be considered when assessing this option.

Contingent disaster financing (CDF) in the form of general budget support is currently available to Pacific island countries through the Asian Development Bank's CDF, the World Bank's Catastrophe Deferred Drawdown Option (CatDDO), and the Japan International Cooperation Agency's Standby Emergency Credit for Urgent Recovery (SECURE) products.

Triggering events are disasters and health emergencies. Processes for withdrawal, use, and accountability for funds are generally outlined in the respective program documents and the financing agreements.

ADB's CDF:

World Bank's CatDDO:

ADB's CDF:

World Bank's CatDDO:

ADB's CDF:

World Bank's CatDDO:

Currently, parametric insurance coverage from the Pacific Catastrophe Risk Insurance Company (PCRIC) is covered here. PCRIC’s coverage focuses on emergency losses, which are estimated using a modeled representation of the event based on hazard parameters and calculation of total physical damages.

Information on public asset insurance will be added in the future.

Solomon Islands briefly participated in the Pacific Catastrophe Risk Insurance Pilot but discontinued it after neither the Santa Cruz earthquake nor the flash floods of early 2014 generated payouts.

Tonga has purchased parametric insurance coverage for earthquake, tsunami, and tropical cyclone risk from PCRIC. Payouts to date were received after Tropical Cyclone Ian (US$1.3 million), Tropical Cyclone Gita (US$3.5 million), and Tropical Cyclone Harold (US$4.5 million), amounting to an average of US$3.1 million per qualifying event.

Available DRF: Based on purchased coverage, the maximum possible payout is US$6.9 million per year for Tonga.

Vanuatu is a member of the Pacific Catastrophe Risk Insurance Foundation (PCRIF) that wholly owns PCRIC but is currently not a PCRIC policy holder after discontinuing its participation in the Pacific Catastrophe Risk Insurance Pilot several years ago. 

Recently, the Government of Vanuatu expressed the intention to resubscribe to PCRIC products.

Several additional DRF instruments are available to Pacific island countries. The following list is largely derived from the DRF instrument inventory compiled by the Pacific Resilience Partnership's DRF TWG and will be expanded over time. 

DRF instrumentSolomon IslandsTongaVanuatu
ADB: APDRFYesYesYes
IFRC & others: Forecast-based/AA financingTo be confirmedTo be confirmedTo be confirmed
IFRC & Red Crescent Societies: DREFYesYesYes
IMF: RCF & RFIYesYesYes
UNCDF & others: Market-based instrumentsYesYesYes
United Nations: CERFYesYesYes
CERC (World Bank)To be confirmedYesTo be confirmed

The fund provides quick disbursing grants to assist ADB developing member countries meet immediate expenses to restore life-saving services to affected populations following a disaster and to augment aid provided by other donors in times of crisis. Additional information is available here.

Three emergency conditions have to be met for access:

  1. A disaster has occurred.
  2. An emergency has been officially declared that is of a scale beyond the capacity of the country and its own agencies to meet the immediate expenses necessary to restore life-saving services to the affected populations.
  3. The United Nations humanitarian/resident coordinator (H/RC) has confirmed the scale and implications of the disaster and has indicated a general amount of funding that would be required to assist in alleviating the situation.

Available DRF: Up to US$3 million per event, subject to (i) geographical extent of damage; (ii) initial estimate of death, injuries, and displaced persons; (iii) the response capacity of key agencies in the country; and (iv) the date and magnitude of the last disaster that affected the country (thereby taking into account the cumulative effect of disasters on the country’s ability to respond).

Countries: All of ADB's developing member countries in the Pacific

Establishment of the APDRF

Author: ADB
Year: 2009
APDRF Implementation Guidelines

Author: ADB
Year: 2022

Description: Forecast-based/anticipatory action financing is triggered ‘post-forecast, pre-emergency’. These concepts refer to financing arrangements that use available climate and weather information and forecasts to trigger financing for pre-planned actions designed to prevent risks and reduce the potential for harm to people and property before an event occurs.

Countries: To be confirmed

Beneficiaries: National Red Cross Societies & other stakeholders.

Information on specific instruments will be added in the future.

Description: The Disaster Relief Emergency Fund (DREF) provides immediate financial support to National Red Cross and Red Crescent Societies. The DREF is managed by the IFRC Secretariat as a central fund and requests are reviewed on a case-by-case basis. Funds can be allocated in as little as 24 hours. Grants can be provided for small to medium scale disasters and health emergencies that do not always attract the attention and interest of media or the international community. Funding can also be accessed in the form of loans for Emergency Appeal to kick start operations in large-scale disasters.

Countries: All Pacific island countries with National Red Cross Societies.

Beneficiaries: National Red Cross Societies.

Description: The Rapid Credit Facility (RCF) provides rapid concessional financial assistance to low-income countries facing an urgent balance of payments need with no ex post conditionality where a full-fledged economic program is neither necessary nor feasible. The IMF’s Rapid Financing Instrument (RFI) provides rapid finance to all countries facing an urgent balance of payments need as the result of a financial crisis, disaster event, or other major sources of economic disruption.

Countries: Papua New Guinea, Samoa, Solomon Islands (RCF and RFI), Tonga

UNCDF, UNDP, and UNU-EHS are jointly implementing the Pacific Insurance and Climate Adaptation Programme (PICAP) that aims to develop, deploy, pilot, test, and scale market-based financial instruments including parametric insurance. This new approach to offering insurance will provide Pacific people with immediate cash relief after extreme weather events and natural hazards. The programme will offer an option for the national and sub-national governments to consider subscribing to a ‘macro to micro’ scheme, where a government level insurance policy pays out to individuals, to support the most vulnerable segments.

Countries: Fiji, Solomon Islands, Samoa, Tonga, Vanuatu

Description: The Central Emergency Response Fund (CERF) provides quick-disbursing grants via UN organisations to support national responses to three types of emergency situations: a) sudden onset emergencies, b) the deterioration of an existing humanitarian situation, and c) time-critical interventions. Guidance and templates are available here.

Available DRF: Up to US$30 million in most cases.

Countries: To be confirmed

Beneficiaries: UN agencies, with implementation through local implementing partners.

CERC is an Immediate Response Mechanism arrangement within the World Bank's International Development Association (IDA) financed projects that allow IDA funds to be quickly reallocated to emergency recovery activities in the event of a disaster. Inclusion of a CERC in IDA projects enables countries to use IDA funds without the need for time-consuming project restructuring. Up to 5% of undisbursed IDA funds can be drawn upon through the CERC budget line, with small states and countries with small undisbursed balances able to access up to US$5 million. The inclusion of CERCs within World Bank projects is increasingly recommended for all IDA eligible countries.

Available DRF: Up to US$5 million.

Countries: Federated States of Micronesia, Marshall Islands, Samoa, Tonga

CERC Guidance Note to Staff

Author: World Bank
Year: 2009