Finance

Finance

ADB sets up Asia Pacific Disaster Response Fund

09 April 2009 09:30 (UTC +04:00)

Baku. Nijat Mustafayev â€“ APA-Economics. The Asian Development Bank (ADB) will establish a new fund that will enable it to immediately provide financial aid to developing member countries (DMCs) hit by natural disasters.

The ADB Board of Directors approved the establishment of the Asia Pacific Disaster Response Fund (APDRF), which will provide grants of up to US$3 million to help DMC’s meet the immediate costs of restoring life-saving services following a declared disaster.

The financial assistance will bridge the gap between existing ADB emergency loans and grants.

"ADB has an existing emergency assistance loan that is designed for longer term reconstruction and rehabilitation. While this mechanism allows for quick fund disbursement, it still takes at least 12 weeks before funds can be made available to affected DMCs," says Neil Britton, Senior Disaster Risk Management Specialist of ADB’s Regional and Sustainable Development Department (RSDD). "The new APDRF will complement ADB’s existing mechanisms and allow for the disbursement of additional funds almost immediately."

The Asia and Pacific region is extremely vulnerable to the impacts of natural disasters. In 2008, out of the top 10 countries worldwide with the highest number of disaster-related deaths, nine were in Asia."

Disasters are increasingly viewed as a core development challenge as they derail social and economic development. From 1996 to 2005, disasters caused over $670 billion in direct material losses worldwide with economic losses 20 times more in developing countries compared to developed countries.

APDRF assistance will be extended after three conditions are met â€“ a natural disaster has occurred; a statement of national emergency has been officially declared by the affected DMC; and the United Nations humanitarian/resident coordinator has confirmed the scale and implications of the disaster and indicated a general amount of funding needed.

The size of the grant extended by APDRF will depend on the extent of the disaster.

RSDD will manage the fund in consultation with ADB regional departments and resident missions and coordinate with various ADB departments in implementing activities financed by the APDRF.

An initial $40 million will be transferred from the Asian Tsunami Fund to establish the APDRF. The tsunami fund was set up by ADB in February 2005 in response to the pressing needs of DMCs adversely affected by the December 2004 tsunami. Asian Tsunami Fund contributors have approved the transfer to the new fund.

ADB will also accept a minimum $500,000 contribution for the APDRF from bilateral, multilateral, and individual sources. Â© Asian Development Bank