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Multilateral Development Bank Support for Disaster-Resilient Infrastructure Systems (August 2022)

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It highlights opportunities in three areas: risk-informed planning, financing assistance, and knowledge building through regional and global networks. Examples from around the world illustrate some of the successes that have been achieved so far. The publication draws on a literature review, insights from stakeholders in developing member countries of the Asian Development Bank, and input from specialists in eight MDBs.

Executive Summary

The disaster resilience of infrastructure systems is a critical challenge for developing Asia. Exposure to climate and geophysical hazards is already widespread. Between 2004 and 2020, disasters led to losses of over $500 billion in the region, affecting 2.1 billion people (Sirivunnabood and Alwarritzi 2020). The risk posed by natural hazards is expected to increase notably in the coming decades as economies grow, urbanize, and come to grips with climate change.

Infrastructure has a central role to play in supporting economic resilience. Large-scale spending on infrastructure will underpin economic development, and the way in which the systems are planned, operated, and financed will fundamentally determine how well the region can withstand, and recover from, natural calamities. To sustain economic development and reduce poverty, the region must have disaster-resilient infrastructure systems, with provisions for reducing, transferring, and managing the climate and disaster risks to the systems.

Multilateral development banks (MDBs) have both the capacity and the aspiration to play a crucial role in promoting disaster-resilient infrastructure in the coming decades. Their direct contribution to infrastructure investments in the developing member countries (DMCs) of the Asian Development Bank (ADB) in 2015 amounted to 2.5% of the total—10% excluding the People’s Republic of China and India (ADB 2017d). MDBs can likewise have a key role in crowding in private sector investments in infrastructure, to meet significant infrastructure needs across developing Asia and globally. Climate and disaster resilience is one of the seven operational priorities identified in ADB’s Strategy 2030 (ADB 2018b), and a common focus shared by other MDBs.

This report identifies opportunities for MDBs to provide effective support to their members in improving infrastructure resilience. The opportunities are specifically aimed at addressing the challenges faced by members despite the MDBs’ current offerings, and are presented here together with best-practice examples showcasing successes achieved by MDBs worldwide. The discussion draws on an extensive review of the literature, as well as on original insights from stakeholders in ADB’s DMCs and from numerous experts in eight MDBs. This report highlights 11 opportunities across the following three main themes based on these insights.

First, infrastructure resilience can be enhanced through consistent MDB involvement throughout the infrastructure life cycle, starting with early planning and extending beyond the completion of project-specific support. MDB support is currently sought only after important infrastructure design choices have been made, and is often limited to the duration of a specific phase of the project (e.g., asset construction). Early involvement of MDBs in project planning, their continued support throughout the asset life cycle, and embedding of project-specific initiatives in the strategic development support they provide can magnify MDB impact in promoting infrastructure resilience (Opportunities 1, 2, and 7).

Second, MDBs can build a strong business case for resilience by improving the understanding and accessibility of user-friendly risk data and targeted finance products. Disaster risks and resilience benefits continue to be underestimated in investment decisions. Decision-makers are often unaware of the full range of benefits infrastructure resilience can provide, or lack the data or the technical capacity needed to assess them. MDBs, with their considerable expertise in disaster risk and resilience assessments, can play a major role in making user-friendly risk information more readily accessible. Once the risks and benefits are understood, these can be managed effectively by public and private stakeholders within their projects, with the help of targeted infrastructure and disaster risk finance solutions from MDBs (Opportunities 3, 5, 6, 8, and 9).

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