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a more semi-detached involvement including financial contributions to established funds and
programmes, and
a risk financing aware approach that involves aligning risk management, development and
humanitarian investments to complement and support risk-financing initiatives undertaken by
others.
Cutting across these levels of direct engagement, there is a strong programmatic rationale for
investing in complementary public goods to strengthen the enabling environment for risk
financing and risk transfer.
In practice, donors may want to engage in one or a combination of these modes or levels of
engagement.
Adapt internal ways of working
Donors may need to adapt their modus operandi to accommodate new partnerships and
programming approaches. They may need to invest in developing internal capacity, including
building awareness of risk financing as a programming option among staff at recipient-country
level. They may also need to develop ways of coordinating and collaborating across disparate
internal technical teams. More flexible approaches to programme monitoring and accountability –
which may need to incorporate several tiers of partners including private sector actors – may also
need to be developed.
Establishing high-level policy commitments and supporting institutional ‘champions’ has helped
some organisations to manage internal scepticism and resistance.
Catalytic investment
The private sector, governments and citizens of developing countries will ultimately bear the
financial responsibility for preparedness against risk. Actors from the private sector and technical
specialists in multilateral institutions and NGOs will most likely develop technical solutions.
Donors have particular comparative advantages – including resources that can be directed to
support the public interest (rather than profit) and political influence – which can serve catalytic
functions, drawing in investment from private and public sector actors and enabling others to
develop and deliver risk-financing solutions.
Support innovation, experimentation and learning
Scaling-up risk financing is not a simple matter of adding more money to existing solutions. New
technology, products, approaches and partnerships will be needed to address existing
challenges in affordability and coverage, and to adapt to emergent risks.
Donors should continue to act as ‘first movers’ in funding the development and start-up costs of
experimental approaches and initiatives in untested environments that might be considered too
costly or risky for private sector investors, at least in the initial stages.
Donors can also ensure that partners commit to learning and openness in communicating
lessons and experiences to stimulate further innovation and adaptation among the wider riskfinancing
community.
A CALCULATED RISK: HOW DONORS SHOULD ENGAGE WITH RISK FINANCING AND TRANSFER MECHANISMS
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