A bold warning about disaster funding: pre-arranged finance for catastrophes has surged to new heights, yet the world’s poorest and most fragile nations still receive only a sliver of it.
The Centre for Disaster Protection, an independent think tank dedicated to strengthening how the globe funds responses to climate and disaster shocks, has released new findings. Their 2025 report, The State of Pre-Arranged Financing for Disasters 2025, shows that worldwide pre-arranged disaster risk financing climbed to a record USD 9.4 billion in 2024—the highest level ever recorded.
This sharp rise signals a growing global emphasis on lining up funds before crises unfold, a trend driven by intensifying climate impacts and tighter humanitarian and development budgets. Proponents argue that pre-arranged financing enables faster, more reliable responses, reducing delays and uncertainty for governments and communities affected by disasters.
Yet the benefits aren’t shared evenly. The analysis reveals that in 2024, low-income countries and fragile or conflict-affected states received less than 7 percent of total international pre-arranged financing. This gap highlights persistent barriers around affordability and eligibility, underscoring how access to financial protection remains limited for those facing the greatest risks.
Payouts from pre-arranged financing jumped in 2024, more than doubling to USD 879 million and reversing a downward trend since the peak of COVID-19-related responses in 2020. Most of these disbursements came from World Bank Catastrophe Deferred Drawdown Options, underscoring the growing importance of contingent credit instruments within disaster finance.
Support from development partners for pre-arranged financing grew only modestly in 2022 and 2023, rising about 6 percent to USD 889 million and representing roughly 1.2 percent of total crisis financing. The report emphasizes that funding to low-income countries remained particularly constrained during this period, even as climate and disaster risks in these regions intensified.
For clarity, the Centre defines pre-arranged financing as crisis funding that is approved in advance and automatically released when predefined trigger conditions are met. Securing funds ahead of disasters helps governments act quickly, minimize losses, and shield vulnerable populations when shocks strike.
The 2025 edition, now in its third edition, is authored by Michèle Plichta (Senior Researcher at the Centre for Disaster Protection), Zoë Scott (consultant), and Darshni Nagaria (Senior Researcher at the Centre). The Centre consolidates data from multilateral development banks, regional risk pools, and humanitarian partners to present a clearer, more accessible picture of where pre-arranged financing stands, who benefits most, and where gaps persist.
The report notes that growth has been driven largely by a sharp rise in contingent loans—especially from the World Bank and the Inter-American Development Bank—while regional risk pools and catastrophe bonds continue to play important supporting roles.
Colin Bruce, a Board Member and Co-Chair of the Centre, commented: “Pre-arranged financing reached an all-time high of USD 9.4 billion in 2024, with gains across all country groups and types. But low-income countries and those affected by fragility and conflict still secure the smallest shares. More must be done to help the most vulnerable prepare for and address crisis risks. We’ve seen in recent shocks that having funding ready to flow supports proper planning and helps families and businesses recover far more quickly. While money isn’t the only requirement, funding in place is crucial for effective planning and rapid recovery, as Hurricane Melissa demonstrated.”
Kimberly Gire, another Board Member and Co-Chair, added: “This year’s findings offer the most comprehensive, up-to-date global view of how pre-arranged financing works. There is clear, positive momentum toward proactive disaster risk management, but the report also highlights challenges. We urge the international community to keep scaling up pre-arranged financing, improve accessibility and affordability for low-income countries and fragile and conflict-affected states, and increase transparency among all actors.”
Michèle Plichta, the study’s lead author and Senior Researcher, concluded: “By consolidating data that was previously hard to access, this report aims to boost transparency and accountability in the international financing system, a vital step toward ensuring timely, equitable, and dignified protection when crises strike.”
But here’s where the discussion gets controversial: is ramping up pre-arranged funding truly leveling the playing field, or does it risk masking deeper structural inequities in how aid and credit are allocated? And should the global community push even harder to ensure LICs and fragile states receive a fairer share, or focus on improving risk reduction and domestic financing as a longer-term solution? Share your thoughts in the comments: do these numbers reflect progress, or do they reveal persistent gaps that demand more radical change?
