Aid agencies to receive ~$1mn ahead of predicted Madagascar drought

By Henry Gale

Feb 14 - (The Insurer) - Aid agencies are set to receive £800,000 (~$1 million) in anticipation of a drought in Madagascar, under a parametric-triggered humanitarian risk financing scheme.

Unlike most other risk transfer instruments, Start Ready aims to direct funds to people exposed to natural catastrophes before they occur.

It uses models developed in partnership with organisations including the Insurance Development Forum and the World Food Programme to forecast heatwaves, droughts, floods and cyclones and trigger payouts when a pre-agreed threshold is met.

This payout aims to mitigate the impact of the expected drought for more than 69,000 people in Beloha, Bekily, Farafangana and Vangaindrano. Some of the funds will be distributed to vulnerable households, while the payout will also be used to distribute water, seeds and agricultural tools and support local healthcare efforts.

The Start Ready initiative was launched at COP26 in 2021 by Start Network, a network of over 50 humanitarian agencies. Its first risk pool began in May 2022 with £3 million of funding, covering six countries. The current 2024/25 pool has £7 million in capital and covers eight countries.

Its donors include EU Humanitarian Aid, the governments of the UK, Germany, France and Ireland, Howden Group Foundation and Swiss Re Foundation.

An anticipated drought in Madagascar last year also triggered a Start Ready payout. Start Network said in a LinkedIn post that lessons learned from last year's event were being used to make the current response more effective and timely.