A $5 million grant has been approved by the Board of Directors of the World Bank to provide the Government of Kazakhstan with help to address the effects of climate change on the economy. The grant is intended to develop an advanced insurance infrastructure.
Kazakhstan, a natural hazard prone country, is expected to experience more disasters due to the climate change which will have negative effects on home owners and Small and Medium Enterprises (SMEs). To address this impact on the nation’s economy, a national program of a mandatory catastrophe insurance for the homeowners and SMEs has been launched. The World Bank will be providing technical assistance for the preparation of a law to that effect.
The grant is geared towards ensuring development of essential insurance programs to support catastrophe insurance. It will also support the efforts of the government in the reformation of the agricultural insurance program to improve the financial sustainability of the nation. The World Bank and the Swiss Secretariat for Economic Affairs (SECO) in collaboration with Global Environmental Facility (GEF) has launched a reinsurance program called the South East Europe Catastrophe Insurance Facility (SEE CIF).
The SEE CIF hopes to support mass sales of catastrophe insurance products using the local insurance companies. This is to assist Kazakhstan to launch cheap and innovative catastrophe insurance programs to cover a large variety of risks.
This project will be implemented by the Europa Reinsurance Facility (Europa Re) which specializes in catastrophe reinsurance, with extensive support from the World Bank. The Europa has been successfully managing the implementation of the project for the US $10 million total grant from GEF and SECO.