The World Bank approved a $275 million Disaster Risk Management Development Policy Loan for Morocco designed to both help the country strengthen its capacity to manage the financial impact of natural disasters and climate-related shocks, and to upgrade its institutional framework for disaster risk management.
Morocco has been hit in recent years by the impact of climate change taking the form of drought and summer flash floods as well as raising temperature.
“Developing a comprehensive risk insurance is particularly critical for the vulnerable population whose livelihood can be threatened in the event of a natural disaster” Jesko Hentschel, World Bank Maghreb Country Director, was quoted in a WB statement as saying.
The loan is also meant to support reforms designed to strengthen the financial, governance, and operational framework of the Solidarity Fund against Catastrophic Events (FSEC).
“This fund is a critical tool which complements private insurance by providing compensation to the uninsured, such as the poor and most vulnerable,” the WB said.
The FSEC includes a parafiscal charge on insurance policies designed to create a sustained source of financing for the FSEC, as well as measures to bolster the private insurance market in case of a catastrophic event. The program also aims to develop a registry of beneficiaries to allow timely, targeted compensation to populations affected by a disaster.