Investment - Articles - Aiming to unlock climate adaptation investment


WTW to develop a breakthrough ‘Resilience Wrapper’ pilot facility that will protect and de-risk loans to private enterprises from key climate risks.

 WTW have announced that it will receive funding from the U.S. Agency for International Development (USAID) to develop a climate-resilient insurance solution that aims to unlock  from the private sector.

 With USAID funding, WTW will design a pilot facility enabling the U.S. Development Finance Corporation (DFC) to offer a parametric insurance solution (Resilience Wrapper) that protects its direct loans to private enterprises from climate-related shocks. Following a triggering event (such as a cyclone, flood, or drought), the subsequent loan repayment will be covered by the insurance payout. The Resilience Wrapper protects the borrowers’ debt servicing obligations from the most impactful climate risks, ensuring that they can remain operational and avoid default following a shock event.

 Simon Young, Senior Director, Disaster Risk Finance & Parametrics, WTW, said: “Vulnerability to climate change and disaster risk can have a direct effect on the cost of borrowing, particularly in lower-income countries. This adds additional pressure on debt servicing capacity and increases the likelihood of debt default, which can lead to credit rating downgrades.

 “With USAID funding, the WTW parametric solution will be a game changer for building the financial resilience of communities to extreme weather events by helping to unlock much-needed private sector investment in critical adaptation projects in climate vulnerable countries.”

 In support of the President’s Emergency Plan for Adaptation and Resilience (PREPARE), the short-term catalytic funding was awarded through the USAID Climate Finance for Development Accelerator’s Adaptation Finance Window initiative. The initiative utilises catalytic grant funding to de-risk the development and scaling of private sector-led climate adaptation approaches in frontier and emerging markets; it also includes an investment from the USAID Enterprises for Development, Growth, and Empowerment (EDGE) Fund.

 Gillian Caldwell, USAID Chief Climate Officer, said: "A disaster can bankrupt a business overnight. Innovations like the WTW Resilience Wrapper make communities better equipped to withstand disaster by supporting the local companies they depend on, while incentivising lenders to work in places they might otherwise consider too risky for investment. I commend WTW's leadership in this area as it signals both the need and the opportunity for greater private investment in resilience.”

Back to Index


Similar News to this Story

The Autumn Budget will inevitably bring higher taxes
Oliver Faizallah, Head of Fixed Income Research at Charles Stanley, part of Raymond James Wealth Management, comments: “Markets are concerned about th
US shutdown knocks equities off course
Asian stocks are down along with US and European futures as US fails to avoid shutdown. Gold hits another all-time high as investors seek out safe hav
Celebrity splits shows need for financial advice in divorce
The separation of an Oscar-winning actress and Grammy-winning musician sparks questions for divorce and finances. While high-profile splits often domi

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.