Rwanda has taken a major step toward enhancing its financial preparedness against climate-related disasters with the validation of the Disaster Risk Financing (DRF) Diagnostic Report and Strategy, the Ministry in charge of Emergency Management said in a recent statement.
Developed in collaboration with the Ministry of Finance and Economic Planning and supported by the World Bank and World Food Programme, the strategy aims to build financial systems that can respond faster and reduce the economic impact of future crises. Until now, the government has relied mostly on emergency funding after disasters.
The strategy introduces practical tools such as contingency funds, insurance schemes, and risk pooling mechanisms. These measures are aligned with international frameworks, including the Global Shield against Climate Risks, the Climate and Disaster Risk Finance and Insurance (CDRFI) agenda, and the Sendai Framework for Disaster Risk Reduction.
Separately, a World Bank feature said that instead of reacting after a disaster and seeking emergency funding, Rwanda aims to plan ahead and have financial tools in place to respond quickly and efficiently.
Commenting on the strategic importance of the initiative, Minister of State for National Treasury, Mr Godfrey Kabera, remarked: "This strategy is a critical step forward in safeguarding Rwanda’s development gains. By integrating innovative financing tools, we are not only mitigating the risks of disasters but also ensuring that our communities recover faster and more sustainably."
In October 2025, more than 100 government officials, development partners, and financial experts met in Kigali for a two-day workshop to disseminate the Diagnostic Report and to validate the new DRF Strategy.
Layered financing approach could save US$50m on average a year
Following the validation, a DRF training workshop enabled participants to build capacity to explore and assess ways to improve disaster financing. They looked at tools such as national budget reallocations, emergency reserve funds, contingent finance, sovereign insurance, derivatives, and catastrophe bonds. These tools form a layered approach—different instruments are used for different types of risks, from small, frequent events to large, rare disasters.
Based on the DRF diagnostic report, a risk layered approach could create savings of about $50m per year on average, compared to the current approach. Even more savings could be generated for more extreme events.
Innovations and Early Successes
Rwanda is already making progress toward stronger financial preparedness. Some initiatives are:
- $140m Catastrophe Deferred Drawdown Option (Cat DDO): This is a pre-approved credit line that gives the government fast access to money right after a disaster, helping speed up recovery.
- Public–private insurance partnerships: The government is working with insurers to expand coverage for farmers, public assets, and infrastructure.