Forecast-based financing in Nepal: A return on investment study

Given the increasing unpredictability and magnitude of climate-related disasters, Forecast-based Financing (FbF) is becoming increasingly relevant for disaster-prone countries. The study shows the pertinence of investing additional resources in replicating similar anticipatory action projects in analogous contexts.

According to the study, not only does the FbF modality offer a process to limit damages caused by a natural hazard on vulnerable people (75% damage reduction) and assets (50% of damage reduction on crops and cattle) and thus save a significant amount of money in the immediate response ($34 USD per dollar invested) but it also further decreases long-term recovery needs and costs.