Asia-Pacific Nature-based Risk Reduction & Insurance Facility (On Hold)

Implemented by Danish Red Cross

The Red Cross and Red Crescent, together with Replexus (UK) and Base Carbon have established the Asia Pacific Protection, Restoration and Resilience Financing Facility (or the Facility). The Facility will cover multiple Ecosystem-based Adaptation solutions that protect communities from natural disasters, whilst at the same time contributing to the restoration of valuable and vulnerable ecosystems.  

This Facility enables capital markets to contribute to climate adaptation efforts, by setting up a value proposition that serves both the humanitarian sector and commercial investors. By structuring commercially viable financial vehicles that embrace global capital markets, humanitarian organisations, like the Red Cross, can change their funding paradigm from one focused on grant funding to one focused on blended finance.

The Facility’s first Nature-based Climate Solution program seeks to cover up to 30,000 hectares mangrove restoration and reforestation in the Philippines. At the heart of the Facility is a trust fund where proceeds are pooled from four revenue streams. These revenue streams (or Loops) correspond to specific input actives, for example planting mangroves generates revenues from selling call options or warrants on associated carbon credits; or paying an annual insurance premium for the tropical typhoon catastrophe bond cover that protects the newly planted mangroves and related coastal communities.

Cohort: 2nd (September 2021 cutoff)

Award: US$231,495

Header Image: © DRC / Gregory Piper; Footer Image: Louie Martinez © Unsplash

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