The need to widen the donor base for humanitarian assistance, and to target finance to countries experiencing crisis to address the underlying developmental and climate-related drivers of crisis, is long recognised. This chapter examines the behaviour in 2021 of donors, public and private, looking at all humanitarian funding, as well as that targeted specifically to gender-related interventions. And, beyond humanitarian assistance, it explores the role of key World Bank crisis-financing mechanisms and development funding for disaster risk reduction (DRR).

In 2021, the three largest donors accounted for 59% of all public humanitarian assistance, a similar proportion to previous years. Yet change was evident in individual funding patterns, as increases in excess of 10% from the two largest donors, the US and Germany, counter-balanced a second large annual reduction in funding from the UK, a decrease of US$1.0 billion to US$1.6 billion, 39% less than in 2020. Japan was the fourth-largest donor, with assistance doubling (up 104%) to US$1.2 billion. Funding targeting gender is also concentrated among a small group of donors. The 10 largest donors of gender-specific funding accounted for 88% of all gender-specific funding from public donors in 2021.

Spending on in-country donor refugee costs was US$8.7 billion in 2021, the fifth consecutive reduction in spending since the 2016 peak of US$16.8 billion. Estimates for 2022, as many European donors take in Ukrainian refugees, suggest funding on domestic refugee hosting could be double or triple that of 2016.

In 2020, total international humanitarian assistance from private donors increased by 5%, from US$6.2 million in 2019 to a record US$6.5 billion, with estimates for 2021 indicating a similar volume, US$6.4 billion. In 2020, the most recent year for which a breakdown of data on private donors is available, funding from individuals fell slightly from 2019 levels to US$4.5 billion (68% of all private assistance).

The volume of official development assistance (ODA) provided by multilateral development banks to the annual largest 20 recipients of humanitarian assistance has grown significantly, doubling since 2015 from US$5.8 billion, to US$11.6 billion in 2020. The World Bank in particular is providing more financing through crisis-focused mechanisms that increasingly intersect with traditional humanitarian response. For instance, in 2021, the Fragility, Conflict and Violence Envelope of the World Bank’s International Development Association (IDA) provided finance totalling US$2.3 billion to nine countries with humanitarian response plans.

Funding for DRR is a potentially important anticipatory element of existing approaches to limit the impact of climate change in contexts vulnerable to, or experiencing, humanitarian crises. Between 2018 and 2020, ODA with the primary purpose of DRR increased 45%, from US$1.6 billion to US$2.4 billion, with Japan and the UK being the largest donors over this period.

The impacts of the Covid-19 pandemic have led to rapid growth in humanitarian need over the past two years, accelerating rises over the previous decade. This has placed an ever-greater strain on the aid budgets of donor countries. This situation is being compounded by pressures on the global economy and domestic responses to Covid-19. In 2022, effects of the war in Ukraine, including increased expenditure to support the hosting of Ukrainian refugees among many of the largest donors of humanitarian assistance, have placed further pressure on donor budgets.

Against this backdrop, the donor landscape remained largely unchanged in 2021, with the same small number of donors providing nearly all international humanitarian assistance. As noted in ‘International humanitarian assistance’ (Chapter 2), total international humanitarian assistance from public donors grew from US$23.5 billion in 2020 to US$24.7 billion in 2021. While assistance provided by the UK declined significantly, accelerating further the pace of reductions seen in 2020, further rises in contributions from the US and Germany cushioned the impact of the UK decrease.

• In 2021, the funding base remained unchanged, with no shifts towards greater burden-sharing and diversification. As in previous years, the 20 largest donors in 2021 provided nearly all public international humanitarian assistance, accounting for 97% of all allocations.
• The US, Germany and the UK have been the three largest donors every year for the past decade. In 2021, these three donors collectively accounted for 59% of public international humanitarian assistance, down slightly from 60% in 2020.
• Despite its decrease in contributions, the UK remained one of the three largest donors and has recently announced a new three-year international development strategy, which suggests levels of funding will stabilise but at lower levels than 2020.^[1]

As in previous years, contributions from individual donors fluctuated greatly.

• Allocations of international humanitarian assistance increased from 14 countries among the 20 largest donors, with 10 seeing rises of more than 10%.
• The US and Germany, the two donors providing the largest volumes of assistance, were among those allocating 10% more in 2021 than in 2020. The US provided US$9.8 billion (up 12%), while Germany allocated US$3.2 billion (up 11%), the first increase from Germany since 2017.
• With these increases, and the decline in UK contributions, the US and Germany accounted for a growing proportion of all public assistance: 52% in 2021, up from 49% in 2019.
• Among other donors increasing the volume of assistance provided in 2021, most notable was the increase in contributions from Japan, which more than doubled from 2020 to US$1.2 billion (up 104%), the highest level of Japanese assistance since 2015.
• The trend of large fluctuations in assistance from the United Arab Emirates (UAE) and Saudi Arabia continued in 2021, with two years of respective declines reversed, and volumes increasing by around three quarters to US$745 million (up 74%) for the UAE and to US$553 million (up 87%) for Saudi Arabia.
• The reduction in assistance from the UK dwarfed all others, with UK international humanitarian assistance declining in 2021 by US$1.0 billion, a 39% decrease from 2020, to US$1.6 billion. This follows a 16% reduction between 2019 and 2020.

Spending on in-country refugee hosting

Donor countries also continued to provide financial support for hosting refugees and asylum seekers in 2021. According to preliminary data from the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC), 2021 presented the fifth consecutive annual decrease in ODA for hosting refugees in-country.

• In 2021, the preliminary volume of total ODA spent on in-country refugee hosting costs by DAC members decreased slightly, by 0.3% to US$8.72 billion, from US$8.75 billion in 2020. This is more than half the total spending in 2016, peaking at US$17.2 billion. DAC directives were subsequently clarified in 2017 on what in-country refugee hosting costs could be counted as ODA.^[2]
• The largest increase of expenditure from 2020 to 2021 was seen for the UK (up 42% to US$1.1 billion). This is against the backdrop of declining humanitarian assistance and total ODA^[3] provided by the UK in 2021, meaning the proportion of the UK’s in-country refugee assistance out of the UK’s total ODA almost doubled (from 4.2% in 2020 to 7.5% in 2021).
• Other countries with notable increases of US$100 million or more in 2021 were Italy (up 131% to US$528 million) and Austria (up 74% to US$234 million).

This overall picture of declining spending on in-country donor refugee hosting is likely to be reversed in 2022, as DAC members across Europe take in substantial numbers of refugees fleeing the conflict in the Ukraine. The extent of expenditure and impact of other areas of ODA spending is not yet clear, and the publication of more up-to-date, near real-time information (rather than waiting for delayed retrospective reporting of costs to the OECD DAC) will be important for transparency and accountability, and ensuring that ODA is safeguarded for the most vulnerable populations.

• At the time of writing,^[4] the UN High Commissioner for Refugees (UNHCR) estimates that around 5.3 million refugees from Ukraine have so far been recorded across Europe since 24 February 2022. This is around 75% of all refugees hosted in European countries recorded by UNHCR at the end of 2021.
• Some donors – including Sweden, Norway and Denmark – have already announced decisions to make cuts in their ODA budgets and reallocate this funding to support arriving Ukrainian refugees. Germany has announced a revision to its ODA budget that represents a mix of additional funding for direct support to the Ukraine crisis and to mitigate consequences of the global food crisis on low- and middle-income countries, partly offset by cuts in other areas.^[5]
• How high in-country refugee hosting costs will end up being in 2022 for donor countries hosting Ukrainian refugees, and the knock-on effect on ODA budgets, including humanitarian assistance, remains unclear. Current estimates, partly based on in-country refugee hosting costs from the 2016 influx of refugees in Europe, vary between US$30 billion^[6] and US$47 billion.^[7] This would imply double-to-triple in-country refugee-hosting costs compared to the previous peak for DAC members in 2016 (US$17.2 billion).

The need for more donors to provide greater volumes of international humanitarian assistance has been long recognised.^[8] The humanitarian system, as noted in ‘International humanitarian assistance’ (Chapter 2), remains precariously reliant on a small number of donors. As humanitarian needs continue to grow (see Figure 1.1, Chapter 1), the current configuration of the donor base looks increasingly inadequate. The extent to which individual donors prioritise humanitarian response, relative to other needs and the size of their domestic resource base, is illustrated by the proportion of gross national income (GNI) committed to humanitarian assistance.^[9]

In 2021, among the 20 largest donors of international humanitarian assistance by volume, a third increased the proportion of GNI provided as humanitarian assistance. Stark differences seen in previous years, in the proportion of GNI allocated, were again evident in 2021.

• Four donors allocated more than 0.1% of their GNI to humanitarian response (the UAE, 0.21%; Luxembourg, 0.18%; Sweden, 0.16%; and Norway, 0.15%). This is two fewer than in 2020.
• Turkey also reported international humanitarian assistance representing a high proportion of GNI: 0.86% in 2021, a decrease from 1.02% in 2020. Turkey’s reported contributions are not directly comparable with those of other donors, however, as the assistance voluntarily reported to the OECD DAC largely comprises spending on hosting Syrian refugees within Turkey.
• Seven donors increased the proportion of GNI provided as international humanitarian assistance. Among those donors, all increases were driven by assistance rising more than GNI, with the exception of the UAE and Saudi Arabia, where assistance still grew but GNI decreased.
• Six countries saw the proportion of GNI provided as humanitarian assistance decrease. In one country, Luxembourg, the volume of humanitarian assistance grew but at a slower rate than GNI. In the other five, humanitarian assistance decreased while GNI grew.
• The most notable decreases in assistance as a proportion of GNI were from Denmark and the UK. Denmark’s assistance reduced from 0.15% of GNI in 2020 to 0.09% in 2021. Despite this fall, Denmark remained among the five largest donors measured by GNI, down from fourth to fifth place.
• The UK’s assistance accounted for 0.05% of GNI in 2021, down from 0.1% in 2020, placing it 13th, down from 6th in the previous year.

Effective immediate and long-term support to people at risk of, experiencing or recovering from crisis, requires a combination of types of finance including humanitarian assistance but also development, peacebuilding and climate interventions. More funding for humanitarian assistance is needed. But this should not come at the expense of other financing provided to those experiencing poverty or crisis (see ‘International humanitarian assistance’, Chapter 2). Assessing the behaviour of the 20 largest donors, who contribute nearly all international humanitarian assistance, indicates where changes in policy could generate greater volumes of resourcing. The greatest impact would be made by those countries with the largest economies.

• The US, while the largest donor of international humanitarian assistance by volume, has the world’s highest GNI, of which 0.04% was for humanitarian response in 2021, placing it 15th among other countries.
• Other countries with high GNI already among the largest donors, where increases in the proportion of GNI provided could mobilise significant volumes of assistance, include Spain (13th-highest GNI, providing 0.03%), Italy (8th-highest GNI, providing 0.03%) and Canada (10th-highest GNI, providing 0.04%).

Outside this group of 20 donors, there are other countries with large, developed economies that currently provide a relatively small proportion of their GNI as international humanitarian assistance.

• Notable high-income countries currently allocating relatively small proportions of GNI to humanitarian assistance in 2021 include: Japan (3rd-highest GNI, providing 0.02%), France (5th-highest GNI, providing 0.02%), South Korea (11th-highest GNI, providing 0.01%) and Australia (14th-highest GNI, providing 0.02%).

As noted in ‘Gender-relevant funding’ (Chapter 2), gender-related needs are perceived to have grown rapidly, with the Covid-19 pandemic reported to have reversed previous gains in gender equality and the empowerment of women and girls. There has been an increasing focus on gender-related humanitarian needs that has been accompanied by growing volumes of funding, although these increases are failing to keep pace with rising need. Gender-related funding is not consistently reported. With some interventions mainstreamed within programmes, sometimes supported by core funding, it is not possible to assess accurately the scale and impact of these mainstreamed programmes. Recent analysis by Development Initiatives has begun to unpack gender-related funding, identifying the broad scope of mainstreamed funding as well as pinpointing more focused gender-specific programming, which has gender-related needs as a primary objective. Most of this gender-specific funding is provided by a small group of donors.

• The 10 largest donors of gender-specific funding accounted for 88% of all gender-specific funding from public donors in 2021.
• The largest donors by volume were the US (US$122 million), EU institutions (US$54 million) and Canada (US$48 million). Alone, the US provided 27% of all gender-specific funding from public donors in 2021.

The proportion of total funding provided by donors that is for gender-specific programmes varies significantly.

• Four donors allocated 4% or more of their total assistance to gender-specific programmes: Australia (9.4%), Norway (6.3%), Italy (4.8%) and Canada (4.0%).

While the US and EU institutions contributed the largest volumes of gender-specific assistance in 2021, this accounted for less than 2% of the total volume of humanitarian assistance they each provided. Germany, the second-largest donor of international humanitarian assistance in 2021, allocated 0.5% to gender-specific projects.

Private donors play an important role in financing humanitarian response. The outbreak of the Covid-19 pandemic in 2020 (the latest year for which a breakdown by donor type is available) saw contributions significantly increase from foundations, companies and corporations, offsetting a slight decrease from individuals.

• In 2020, total international humanitarian assistance from private donors increased by 5%, from US$6.2 billion in 2019 to a record US$6.5 billion in 2020 (see Figure 2.1, Chapter 2).
• Individuals are the largest source of private funding for humanitarian response. After a sizeable jump in individual giving in 2019 to US$4.7 billion, from US$4.0 billion, 2020 saw funding fall to US$4.5 billion. This drop, and the increase in funding from other private donors, drove down the proportion of total private funding donated from individuals, from 76% in 2019 to 68% in 2020, returning to pre-2019 levels.
• This slight decrease in funding from individuals was offset by significant increases in funding from other private donors engaging strongly with the Covid-19 response. Funding from trusts and foundations more than doubled, from US$0.4 billion in 2019 to US$0.9 billion in 2020, and the overall proportion of private funding grew from 6% to 14%. This marks a significant increase in funding from the previous four-year average of US$0.5 billion.
• Funding from the private sector also doubled, from US$0.3 billion in 2019 to US$0.6 billion in 2020, accounting for 9% of total funding in 2020, from 5% in 2019.
• Funding for humanitarian response is also raised through national societies at country level, including the Red Cross National Societies. Funding from national societies has remained consistent throughout the past five years at US$0.2 billion. While the exact breakdown is not known, donors to national societies include the private sector, foundations and individuals.

Funding from private donors is channelled primarily to non-governmental organisations (NGOs), with only a small proportion directed to multilateral agencies. Public donors, in contrast, provide most of their assistance to multilaterals (see Figure 4.2, Chapter 4). In 2020, there was a shift, with relatively more private assistance going to multilaterals and less to NGOs.

• In 2020, 78% (US$5.1 billion) of assistance from private donors was provided to NGOs. This represents a smaller proportion than in 2019 (85%, US$5.3 billion) and less than the average over the past five years (also 85%).
• With relatively less funding to NGOs in 2020, more was directed to multilateral agencies. In 2020, the proportion of total private funding provided to multilateral agencies grew from 12% (US$740 million) in 2019, to 19% (US$1.2 billion).
• The International Red Cross and Red Crescent Movement typically receives only a small proportion of private funding: 3% in 2020 (US$219 million).

► Learn more about private humanitarian funding: what kinds of donors provide it, what are the key trends in type and volume, and how could greater transparency support crisis response?

Over the last decade, multilateral development banks (MDBs) have become increasingly active in crisis contexts. As the concentration of poverty in crisis-affected countries grows, MDBs are choosing to target a growing share of resources to these countries (see Figure 3.5). This is through traditional MDB financing, as well as a growing number of crisis-focused instruments and tools (see ‘World Bank financing in crisis contexts’). Support from MDBs to crisis contexts is primarily in the form of loans, with the aim of protecting social and economic development gains made by supplying long-term financing to governments and the private sector to support long-term recovery. Overall, volumes of development ODA to countries experiencing crisis far exceed humanitarian assistance (see Chapter 2, ‘Volumes of assistance compared with appeal requirements’) and, while the degree and scale of engagement differs between crisis context and MDB, there is a need to ensure greater understanding and coherence between development and humanitarian actors.

► Read DI’s analysis of the role of development actors in crisis settings and operationalising the humanitarian-development-peace nexus in Cameroon, Somalia and Bangladesh.

• The volume of MDB ODA disbursements to the annual largest 20 recipients of humanitarian assistance has significantly grown, doubling since 2015 from US$5.8 billion, to US$11.6 billion in 2020. Growth in ODA to crisis contexts has outpaced disbursements elsewhere and the share of total ODA from MDBs being channelled to the 20 largest recipients of humanitarian assistance has increased from 27% in 2011 to 38% in 2020.
• MDBs provide the majority of financing to countries in crisis as concessional loans, although the grant component has risen in recent years. Over the last decade, loans have made up at least 60% of MDB ODA to crisis contexts, which steadily increased to a peak of 80% in 2016. In 2017, the share of grants as a proportion of total ODA from MDBs to crisis contexts was 20%, but this has steadily increased since then, to 34% in 2020. This reflects a weaker trend seen more broadly in MDB behaviour; total MDB ODA provided as grants has grown from 23% in 2016 to 29% in 2020.
• Nearly all ODA from MDBs to countries experiencing crisis is reported as development assistance. Just 4% of ODA to the annual 20 largest humanitarian recipients was reported as humanitarian assistance between 2011 and 2020, consistent throughout the period.

The largest MDB donor to countries experiencing crisis is the World Bank’s IDA, followed by the Asian Development Bank (AsDB) and the African Development Fund (ADF).

The AsDB promotes poverty reduction and the social and economic development of its member states. Through its focus on fragile and conflict-affected situations and small island developing states, the AsDB provides flexible processes for member countries experiencing fragility, including Afghanistan and Myanmar.^[11] Cumulative loans and grant disbursements from the AsDB to Afghanistan total US$2.91 billion,^[12] and US$2.18 billion to Myanmar.^[13] The Disaster and Pandemic Response Facility also provides assistance for emergency response and reconstruction including disasters triggered by natural hazards. More recently, policy changes were approved to enable the AsDB to support disaster and emergency response more efficiently, including proposals to expand the Disaster and Pandemic Response Facility to cover conflict-related humanitarian emergencies and public health emergencies.^[14]

The ADF is the concessional window of the African Development Bank. Support is provided to member countries in fragile settings through the Transition Support Facility financing mechanism. This is a flexible disbursement mechanism, which provides support for state-building efforts, capacity-building and arrears-clearance. Addressing fragility and improving resilience is a key priority of the ADF, and ADF-14 saw a 13% increase in resource allocation to the Transition Support Facility.

• Between 2011 and 2020, IDA has provided 76% of total MDB ODA disbursements to the annual largest 20 humanitarian recipient countries.
• The AsDB and the ADF both channelled just under 10% each of total ODA from MDBs to countries in crisis in the same period.
• While being the largest provider of ODA to countries in crisis, IDA has consistently provided the lowest share of grants among its disbursements since 2016, although this share increased from 13% in 2016 to 30% in 2020.
• The ADF has seen a significant jump in the proportion of funding provided as grants to crisis contexts, from 21% in 2017 to 72% in 2020.
• As noted above, very small proportions of ODA disbursed from MDBs to countries affected by crisis have been provided as humanitarian assistance. Since 2012, IDA has provided an average of 3% as humanitarian assistance, peaking in 2019 at 6%. Since 2013, the ADF and the AsDB have provided all ODA to countries in crisis as development assistance.

While MDB ODA disbursements to countries experiencing crisis have increased overall, countries in crisis have not been equally supported, with MDBs channelling most funding to countries with more established private sectors and state structures. Many countries experiencing acute crisis are unable to access MDB support. For example, regular assistance to Afghanistan from the AsDB has been placed on hold since August 2021, and going forward AsDB support is being channelled through the UN.

• The countries from the largest 20 humanitarian recipients across the period 2011 to 2020 that received the largest volumes of MDB ODA were Ethiopia (21%) and Pakistan (12%).
• Other countries affected by crisis that have consistently been among the top 20 recipients of humanitarian assistance over the past decade have received notably less funding. For example, Yemen has received just 3.2% of total MDB ODA funding, South Sudan 0.6%, Somalia 1.2%, Iraq 0.2% and Syria 0.01%.

There is growing intersection between work supported by the World Bank and traditional humanitarian response (see ‘Multilateral development bank financing to countries experiencing crisis’). Over the past decade, the World Bank’s strategy has pivoted from focusing mainly on post-conflict reconstruction, towards providing specific support to fragile contexts, with an expanded range of tools and financing mechanisms for crisis prevention, response, mitigation and resilience-building.^[15] Shifts in the number and duration of protracted crises have also brought the World Bank increasingly into proximity with humanitarian actors. This is evident in the strengthened partnership the Bank has developed with the United Nations and other actors across the humanitarian–development–peace nexus.

Relevant resources cut across the World Bank’s expansive financing architecture, including: IDA country allocations and its thematic envelopes and windows; emergency mechanisms embedded in development policy loans; and mechanisms leveraging public and private resources such as financial intermediary funds and trust funds (see ‘Multilateral development bank financing to countries experiencing crisis’). The following section provides an overview of World Bank financing in fragile, conflict and violence-affected settings by focusing on seven of the main channels and tools available from four sources.

These instruments were selected based on their relevance for humanitarians, the volumes of financing available, and the public availability of information. Greater understanding of the scales, ways of working and types of interventions this financing provides is a first step towards improved coordination and efficiency between humanitarian and development actors. The many interventions complementary to traditional humanitarian responses include large-scale infrastructure projects, strengthened access to basic services, and immediate pandemic and disaster responses.

• Financing from the selected instruments is frequently allocated to countries with humanitarian response plans (HRPs) or regional refugee response plans (RRRPs), however it is not equally spread across all humanitarian crisis settings. Over the past few years, IDA financing has prioritised displacement, conflict and climate-related crises in Africa, while the Syrian and Venezuelan displacement crises have been targeted through specific Financial Intermediary Funds.
• In most cases, financing is provided as loans to governments for their long-term national responses (see ‘Multilateral development bank financing to countries experiencing crisis’).^[16] The overall volumes of financial transfer therefore appear high and provide significant amounts of capital in comparison to volumes of humanitarian grants. As loans must be repaid, the World Bank works with recipients of lending to manage debt effectively, through its Sustainable Development Finance Policy.^[17]
• There is regular engagement between the World Bank and the United Nations to support policy, diplomatic, strategic and operational dialogue and collaboration through bilateral, inter-agency and inter-governmental engagement. The World Bank – United Nations Partnership Framework for Crisis-Affected Situations lays out operational commitments to leverage complementarities and mandates. In some circumstances, UN agencies and non-government actors implement programmes on behalf of the World Bank. However, the extent to which World Bank financing in countries experiencing crises is coordinated and aligned with humanitarian action implemented by non-UN actors is unclear.

International Development Association (IDA)

The International Development Association (IDA) is one of the World Bank’s main financing channels for low-income countries, providing zero- or low-interest loans, as well as grants, to governments. Loan repayments are stretched over 30­–40 years. However, countries at high risk of debt distress receive financing in the form of grants; in 2021, a third of all IDA financing was committed as grants.^[18] IDA is financed by contributions from high- and middle-income partner countries, transfers from other World Bank Group institutions, borrowers’ repayments of earlier IDA credits, and funding raised in capital markets. Typically, every three years, IDA’s objectives are reassessed and its available funding is replenished. Total funding for the 19th replenishment of IDA (IDA19) was US$82 billion, 29% of which was enabled by donor contributions. In December 2021, IDA20received a total replenishment of US$93 billion.^[19]

IDA makes general disbursements to countries; around 80% of financing was channelled directly through country allocations in 2021.^[20] The rest of the financing is allocated through envelopes and five dedicated financing windows,^[21] of which the Crisis Response Window (CRW) and the Window for Host Communities and Refugees are most relevant to crisis response. The share of IDA resources going to countries facing challenges related to fragility, conflict and violence has increased fivefold since 2010, reflecting the World Bank’s strategy to increase support in this area.^[22]

IDA Fragility, Conflict and Violence Envelope

Objective

Under the 19th replenishment of IDA funds, covering July 2020 to June 2022, a new envelope of allocations was created specifically for countries facing acute risks of fragility, conflict and violence (FCV). The FCV Envelope aims to support the prevention of conflict, uphold engagement during conflict, and build resilience in countries emerging from crises.

Financing

FCV Envelope financing is provided in the form of grants and loans at concessional rates.

• 9% (US$7.5 billion) of IDA19 was allocated to the FCV Envelope.^[23]
• This proportion has remained stable for the 20th replenishment covering fiscal years 2023 to 2025, with US$8.8 billion allocated to the FCV Envelope.^[24]

Eligibility

Financing through the FCV Envelope is channelled through three allocations.^[25] The Prevention and Resilience Allocation scales up preventative approaches for countries at risk of falling into high-intensity conflict or large-scale violence. The Remaining Engaged during Conflict Allocation is for countries experiencing high-intensity conflict with extremely limited government capacity. The Turn Around Allocation supports countries emerging from a period of conflict, social/political crises or disengagement, through resilience-building.

IDA Crisis Response Window (CRW)

Objective

The CRW provides rapid resources to countries experiencing severe crises and contributes to coordinated international responses.^[35] It aims to prevent emergencies from diverting finances away from work to achieve longer-term development goals, as well as to avert and mitigate future crises. The CRW was piloted under IDA15 to address the repercussions of the global financial crisis. Under IDA16 in 2010, it was formally established, and natural disasters were included under its remit; in 2014, following the Ebola outbreak, it was further expanded to cover public health emergencies.^[36] Since IDA19, the CRW has been equipped with an early-response financing mechanism to cover slower-onset crises such as disease outbreaks and food insecurity.

Financing

CRW financing is provided in the form of grants and loans at concessional rates. The total volumes available for the CRW, capped at 5% of IDA financing,^[37] have risen from US$1 billion^[38] for IDA16, to US$2.5 billion under IDA19 (with up to US$1 billion for the early response financing framework)^[39] and US$3.3 billion allocated for IDA20 (US$1 billion for early financing).^[40]

Eligibility

All IDA countries are eligible for CRW support, but allocation is based on the magnitude of the crisis. Eligibility for early-response financing to slower-onset crises depends on countries having in place (or confirming they will develop) credible preparedness plans. IDA’s board of executive directors approves financing requests. The CRW stands out among World Bank financing tools as a rapid mechanism (see Figure 3.5 in the Global Humanitarian Assistance Report 2021), as it allocates and disburses funds faster than the regular IDA allocation framework, with an average time from concept note review to first disbursement below six months.^[41]

IDA Window for Host Communities and Refugees

Objective

The Window for Host Communities and Refugees (WHR) aims to create long-term development opportunities in countries hosting refugees. Introduced in 2017, the window promotes inclusive growth for refugees and host communities in protracted situations, responds to new displacement flows and supports policy changes for refugee protection, integration and/or other relevant durable solutions. The window was established during the formation of the Global Compact on Refugees and marked new strategic collaboration between the World Bank and UNHCR on displacement.^[45]

Financing

WHR financing is available as either grants or loans, depending on the country’s risk of debt distress.

• US$2 billion was allocated to the window under IDA18 (2.6% of total IDA).^[46]
• US$2.2 billion was allocated under IDA19 (2.7% of total IDA).^[47]
• Under IDA19, a dedicated sub-window of US$1 billion was included for programming responding to the impacts of the Covid-19 pandemic.
• US$2.4 billion has been allocated for IDA20 (2.6% of total IDA).^[48]

Eligibility

WHR funding is available for IDA countries that: (1) host at least 25,000 refugees, or at least 0.1% of the country’s population; (2) adhere to a framework for the protection of refugees (assessed in coordination with UNHCR); and (3) have an action plan involving the strengthening of the policy and institutional environment for refugees and host communities.

Emergency mechanisms and instruments

The World Bank provides what it terms ‘development policy loans’ to the general budgets of national governments, to support policy reforms and institutional reform processes, rather than specific projects.^[52] Tools and features, such as the Catastrophe Deferred Drawdown Option (discussed below) and the Contingent Emergency Response Component, are built into these loan arrangements, so that when an emergency arises, financing from these development policy loans can be re-purposed or rapidly disbursed to support an immediate response.

Catastrophe Deferred Drawdown Option (Cat DDO)

Objective

The Catastrophe Deferred Drawdown Option (Cat DDO) enables countries to seek rapid financing proactively, before a natural or health-related disaster hits. CAT DDOs are aimed at developing and enhancing the capacity of borrowers to manage natural hazard risk, while providing a source of immediately available liquidity that could serve as bridge financing while other sources are being mobilised following a natural disaster. Financing is disbursed only once a drawdown trigger (such as the declaration of a state of emergency) is activated. Resources then become available within weeks or even days of activation, enabling countries to respond to immediate humanitarian needs before mobilising longer-term financing for reconstruction and rehabilitation, and without compromising funding for longer-term development goals.

Financing

Cat DDOs are options pre-agreed in development policy loans, released only in the event of a catastrophe. IDA countries can secure budget support of up to US$250 million, or 0.5% of GDP (whichever is lower).^[53]

Eligibility

Cat DDOs were initially created in 2008 for middle-income countries for seismic and hydro-meteorological events, but were expanded to cover low-income countries and public-health-related shocks in IDA18. To be eligible, countries must have an adequate macroeconomic policy framework and a disaster risk management programme. Financing is available for three to six years.

Financial intermediary funds

Separate from the IDA financing system, the World Bank also hosts several financial and partnership platforms to provide global public goods or tackle broad themes (such as climate change, health, education and crisis response). These platforms, known as financial intermediary funds (FIFs), support projects implemented by several actors, including multilateral development banks and/or UN agencies. The World Bank often hosts FIF secretariats, as well as providing financial, investment and technical services.^[56]

Global Concessional Financing Facility

Objective

One of the relevant FIFs for crisis response is the Global Concessional Financing Facility (GCFF), which provides development financing for middle-income countries affected by refugee crises. The GCFF was launched in 2016 in response to the growing Syrian refugee crisis, and expanded in 2019. Funds are intended for development projects that benefit refugees and host communities.

Financing

The GCFF fills an important gap for countries often unable to access loans at concessional rates traditionally reserved for lower-income countries, and that may be unable to spend national resources or take on additional debt to support refugees. Donor contributions reduce the cost of borrowing to highly concessional levels. In exceptional cases, the facility can also provide grant funding, and a private sector funding modality is also currently being piloted in Jordan.

• Since 2016, total contributions to the GCFF have amounted to US$831 million,^[58] of which US$773 million has been allocated to support lending on concessional terms.^[59]
• This has leveraged over US$5 billion in concessional financing^[60] (US$1 dollar from donors can leverage US$5 dollars in concessional loans).

Implementation

The World Bank provides trustee and secretariat services, and manages GCFF financing alongside the Islamic Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank and the Inter-American Development Bank. Canada, Denmark, the European Commission, Germany, Japan, the Netherlands, Norway, Sweden, the United Kingdom and the United States provide the grants that unlock concessional financing. Allocation decisions are made by the GCFF steering committee.

Global Risk Financing Facility

Objective

Another relevant FIF is the Global Risk Financing Facility (GRiF), set up in 2018 to support countries in managing climate risks and shocks. The facility, supported by the United Kingdom and Germany, promotes the development of pre-arranged financing instruments, such as insurance, derivatives, catastrophe bonds, contingent finance and budget reserves. While the GRiF does not directly disburse funding for these financing instruments, it provides grants and technical expertise and leverages private sector support, and therefore lowers the barriers that prevent countries from accessing them. It also supports countries to include financial planning and climate risk management in their development agendas.

Financing

• In financial year (FY) 2021, US$238 million was contributed to the facility, US$204 million of which was allocated to projects.^[62] There are 38 projects currently in development.
• Seven of these projects deal with risks arising in fragile, conflict-affected or violent situations.

Eligibility

Application for GRiF grants is led by World Bank country teams. Up to US$200,000 in preparation funds are available for the scoping phase of the project, after which a concept note can be prepared. GRiF grants are endorsed by the steering committee (led by the World Bank, Germany and the United Kingdom) and awarded by its secretariat.^[63]

Trust funds

Resources relevant for crisis response can also be found in the World Bank’s portfolio of trust funds (529 active accounts in 2021).^[66] Trust funds are financing arrangements hosted by the World Bank in which one or multiple donors pool contributions, with the intention of scaling up grant funding for coordinated action.^[67] They are used for individual crises and countries, and for catalysing global public goods. Programmes include tackling climate change, promoting equitable growth and supporting infrastructure. Among the largest World Bank trust funds are the Afghanistan Reconstruction Trust Fund (which disbursed US$3.9 billion between FY2017 and FY2021), the Global Financing Facility, Carbon Finance and the Global Facility for Disaster Reduction and Recovery.^[68] In 2021, US$3.8 billion was disbursed from World Bank trust funds.^[69]

State and Peacebuilding Fund

Objective

The State and Peacebuilding Fund (SPF) is the World Bank’s largest global multi-donor trust fund supporting the implementation of its FCV strategy. The SPF focuses on four priorities: preventing violent conflict and interpersonal violence; remaining engaged during conflict and crisis situations; helping countries transition out of fragility; and mitigating the effects of fragility, conflict and violence.^[71] The SPF’s cross-cutting priorities are supporting the most disadvantaged and vulnerable people, and systematically addressing gender-based inequalities.

Financing

Funding is provided as grants for either full-scale projects or project components. The SPF is supported by nine donors (Australia, Denmark, France, Germany, the Netherlands, Norway, Sweden, Switzerland and the United Kingdom) and the International Bank for Reconstruction and Development.

• The total fund value of the SPF since 2009 has been US$376.4 million.
• The current total active portfolio stands at US$43.5 million.
• 20 new grants totalling US$15.3 million were added to the SPF portfolio in 2020.
• 25 grants were approved in 2021.^[72]

Eligibility

All developing countries and territories facing challenges related to FCV are eligible. This means that SPF funding is available for countries with no access to IDA or International Bank for Reconstruction and Development financing or that are in arrears (breach of contractual obligation to repay loans). For example, in 2020, Sudan had no IDA funding due to being in arrears but was able to access US$7 million in seed funding for the Sudan Emergency Covid-19 Health Response project through the SPF.^[73]

The SPF secretariat supports the development of proposals, which are elaborated by World Bank task teams and approved on a rolling basis by the technical advisory committee in five business days. Emergency approval can be provided for rapid assessments of disasters and reconstruction needs in three days. This rapid mechanism was used to process financing for a rapid damage and needs assessment following the explosion in Beirut in 2020.^[74]

Disaster risk reduction (DRR) aims to substantially decrease the impacts of a potential disaster by increasing the existing capability of a country to respond, regardless of whether the disaster is small- or large-scale, frequent or infrequent, sudden or slow-onset, caused by natural or human-made hazards, or classified as environmental, technological or biological.^[76] DRR funding is specifically focused on reducing hazard exposure or vulnerability to a disaster, increasing preparedness and response across sectors, and strengthening resilience. It does this through developing infrastructure (such as early-warning systems), mapping risk and providing training on disaster management.

In 2021, half of all people in need of humanitarian assistance were living in countries with high levels of vulnerability to the impacts of climate change (see ‘Humanitarian need and intersecting dimensions of risk’, Chapter 1). DRR is conceived as a wider developmental intervention, and reaching populations in need of humanitarian assistance is not a specific objective. However, it is a potentially important anticipatory element of existing approaches to limit the impact of climate change in contexts vulnerable to, or experiencing, humanitarian crises.

► Read more from DI and the Centre for Disaster Protection about the volumes, timeliness and targeting of other funding for disaster response drawing from nine case studies.

DRR funding can be delivered through targeted interventions or mainstreamed as secondary elements of wider programmes. Data on all DRR funding is not consistently or widely reported, nor is it easy to identify the types of interventions this funding supports. However, there has been an increased focus on DRR in recent years.^[77] 2020 was an important evaluation milestone for the UNDRR Sendai Framework commitments for DRR national strategies and, since 2018, it has been possible to report to the OECD DAC, using a specific marker, projects which have DRR as a primary objective. There is therefore an emerging picture of donor trends related to ODA funding with the primary purpose of DRR, likely to become more complete as the marker becomes institutionalised.^[78]

Between 2018 and 2020, there was a significant rise in the volume of ODA with the primary purpose of DRR, and an overall pattern of growth has been sustained by funding from a consistent group of donors. Fluctuations in the amounts from the largest donors in the past two years have been compensated for by increased contributions from a handful of smaller donors.

• Between 2018 and 2020, ODA with the primary purpose of DRR increased 45% from US$1.6 billion to US$2.4 billion, with a total of US$5.9 billion over three years.
• The UK was the largest donor of ODA with the primary purpose of DRR between 2018 and 2020, responsible for 18% (US$1.0 billion) of total funding, US$69 million more than the second-highest donor, Japan, in the same period.
• In 2020, Japan provided the highest amount of ODA with a primary purpose of DRR (26% of the total, US$604 million), almost tripling the volume of assistance provided (an increase of 218%, or US$414 million). In 2020, Japan gave 49% ($198 million) more in funding than the second-highest donor, the UK ($406 million). Almost two thirds of Japan’s funding went to just two countries, Indonesia and the Philippines, driving very large increases and accounting for nearly all DRR funding received by these countries. Japanese funding to Indonesia increased between 2019 and 2020 from US$20 million to US$324 million (accounting for 94% of the total US$346 million received), and to the Philippines from US$42 million to US$121 million (accounting for 83% of the total of US$145 million received).
• The top six donors accounted for over half (55%, US$1.8 billion) of all ODA with the primary purpose of DRR between 2018 and 2020. During this period, the six largest donors have remained constant: the UK, Japan, Germany, EU institutions, the US and France.
• Between 2019 and 2020, 16 donors increased the amount of ODA with the primary purpose of DRR. Australia and Canada showed the second- and third-highest increases in volume, with rises of US$51 million (442%) and US$31 million (259%), respectively. Other countries saw large proportional increases, including Finland, (462%, from US$2.5 million to US$14 million), Poland (212%, from US$1.4 million to US$4.5 million) and Hungary (12,530%, from US$245,000 to US$31 million).
• Between 2019 and 2020, 12 donors decreased the amount of ODA with the primary purpose of DRR. These donors included France (decrease of US$73 million) and Germany (decrease of US$51 million), both among the six largest donors of 2018–2020.

There is growing recognition of the need to join up complementary commitments to reduce climate vulnerability and build the resilience necessary to reduce the negative impacts of climate change, which in turn drive or worsen humanitarian crises.^[79]

Where DRR funding is targeted is potentially significant for humanitarian response. Where natural disasters occur and drive wider crisis, humanitarian assistance will be drawn to meet these impacts. Initial analysis suggests that the countries receiving large amounts of DRR are at high risk from natural disaster.^[80] The absolute risk of natural disaster may not necessarily need to be high for a natural disaster to have a significant impact – where there is a lack of coping capacity and infrastructure to respond, plus wider political and socioeconomic fragility. The overall risk of crisis is therefore important when considering where ODA with the primary purpose of DRR is targeted, and its potential contribution to lessening the need for humanitarian assistance.

In 2020, countries at highest overall risk from a crisis – a calculation that includes the probability of conflict, socioeconomic fragility and the ability of institutions to respond adequately to crisis^[81] – received a smaller proportion, and a smaller proportional increase, than other countries of total ODA with the primary purpose of DRR. Only 3 of the 10 countries identified as at ‘very high’ overall risk of a crisis were among the 10 largest recipients of ODA with the primary purpose of DRR, and in some cases their allocations decreased. Overall, the volume of funding received by countries at very high risk of crisis was small.

• Countries identified as at ‘very high’ overall risk of a crisis received US$280 million (12%) of ODA with the purpose of DRR, an increase of 14% (US$35 million) from 2019.
• Of those countries at highest risk of crisis and receiving larger volumes of ODA with the primary purpose of DRR, Ethiopia experienced a 46% year-on-year increase to US$42 million in DRR financing, while Somalia and the Democratic Republic of the Congo both experienced an overall decrease in the amount of ODA with the primary purpose of DRR in 2020 (by 18% to US$48 million, and by 11% to US$66 million, respectively).

The smaller volumes reaching countries at high risk of crisis may be determined partly by the nature of DRR funding, as it requires the existence of supportive infrastructure to deliver against most objectives.^[82] Those most likely to become dependent on humanitarian assistance in the event of a disaster are also among those least likely to have infrastructure to support disaster preparedness.

This page was updated on 8 August 2022.