Instead of waiting until a disaster happens before providing aid, forecast-based financing allows humanitarian organisations to prepare proactively for a possible disaster based on a particular forecast, thus hopefully reducing the impact of the disaster on vulnerable communities.
Typically, the national Red Cross or Red Crescent Society works closely with vulnerable communities to develop preparedness actions they can take when they receive a forecast of an impending disaster. This can include distributing supplies, activating volunteers, or increasing awareness-raising campaigns.
The National Society also works with the national hydrometeorological agency or other forecasting agency to develop forecasting thresholds to trigger these actions, which can then be combined into a Standard Operating Procedure for local governments, NGOs and communities.
For example, a flood forecast can be quickly communicated to communities, who then take pre-determined preparedness actions such as moving their valuables and ensuring drainage channels are clear, while the National Societies can ready their staff, and preposition emergency stocks.
Funded by the German Federal Foreign Office, forecast-based financing pilots led by National Societies and the World Food Programme are running in Uganda, Peru, Nepal, Bangladesh, Mozambique, the Dominican Republic, Haiti and the Philippines. Warning thresholds to trigger funding have already been reached in the pilot projects in Peru and Uganda. In Peru, seasonal forecasts of increased flooding risks in late 2015 and short-term forecasts in February 2016 triggered humanitarian funding. This allowed the Peruvian Red Cross to provide refresher trainings for their staff and volunteers, distribute drinking water, and fumigate against mosquitos, which carry diseases such as dengue fever, ensuring that the local populations were more prepared when floods came in early March 2016.
In order to learn more about this concept and explore pilot-project possibilities in South East Europe, the Austrian Red Cross attended the third IFRC Dialogue Platform on Forecast-Based Financing in Geneva on 5 July 2016. Staff and volunteers from Red Cross and Red Crescent National Societies and the World Food Programme presented their experiences with the forecast-based financing approach to movement partners and other NGOs at the meeting.