The GIR 2025 Finance Working Paper examines how to close the financing gap for disaster resilient infrastructure and capture the “resilience dividend.” It shows that disasters disproportionately affect low- and middle‑income countries and small island states, undermining growth, fiscal stability, and development.
Current financing is largely reactive, prioritizing response and recovery over risk reduction. The paper proposes an analytical framework based on three capacities – absorb, respond, and recover – and emphasizes investing across the full resilience cycle. It reviews disaster risk financing instruments, from budgets and maintenance funds to insurance, catastrophe bonds, and contingent credit. To scale resilience, governments must define resilience standards, improve public–private risk allocation, quantify and monetize resilience benefits, and mobilize diverse funding sources.
The paper introduces an Infrastructure Financial Resilience Framework to diagnose gaps and design country‑specific resilience pathways, enabling proactive, risk‑informed infrastructure investment.
Key points
- Disasters disproportionately impact developing economies, threatening growth, stability, poverty reduction.
- Current disaster finance prioritizes response and recovery, neglecting risk reduction.
- Infrastructure resilience depends on capacities to absorb shocks, respond, recover.
- Investing in standards, maintenance, early warning yields long-term resilience dividends.
- Layered financing combines budgets, insurance, credit, bonds, and international support.
- Financial resilience frameworks guide countries toward proactive, risk-informed infrastructure investment.
