Ethiopia disaster risk financing

Discussion draft · Evidence reviewed to 3 November 2026

Status reflects the reviewed evidence. Readiness and usable finance are assessed separately.
DRFS Chapter 5 · Strategic Overview

One Portfolio, Different Jobs

Start with the six instrument families used in the strategy. Explore their trade-offs together, then follow the links to individual providers and financing routes.

Value for Money Across the Portfolio

Table 19 in the full strategy gives a historical assessment of generic instruments. Select a cell for its rationale and the evidence needed for a current decision.

FavourableMixed / conditionalConstraintSplit rating

The historical matrix always covers the six DRFS families. It covers wider considerations. Marginal cost, instrument terms and government priorities also matter. Reassessment follows §5.5 and must use current offers and assumptions.

Cost, current offers and the DRFS review process

The strategy’s marginal-cost comparison assumes a 10% sovereign borrowing rate, a 4% investment return, a 77% social return on displaced expenditure and an ARC pricing multiple of 1.5. These are historical modelling inputs. Their implied switching points require recalibration.

For each current offer, compare premium or interest, fees, reserve carrying cost, displaced programme benefits and future debt service on the same loss and payment schedule. Include the cost of a missed trigger, late settlement and policy renewal.

Section 5.5 proposes a detailed instrument submission, Technical Committee review using updated costs and wider criteria, recommendations, and a ministerial decision. Confirm the operative institutional route before adoption.

Complementary Finance and Delivery

RRO/CERCs repurpose project resources, IMF facilities address macroeconomic needs, and PSNP delivers assistance. These retain distinct functions in the detailed inventory.