Forecast-based financing

Forecast-based financing (FbF) developed from a long-standing element in Climate Centre work: assisting the mainstreaming of the early warning early action model into Red Cross Red Crescent disaster management worldwide.

It recognizes that there are often forecasts available but no humanitarian organization resourced to act before disaster, especially when there is no certainty and a risk of acting in vain.

With their government’s support, the German Red Cross (GRC) secured flexible preparedness funds for actions specified in standard operating procedures.

Twice-yearly dialogue platforms under the IFRC umbrella began in Geneva in July 2015 as part of a German Federal Foreign Office Action Plan on climate, coordinated by the GRC, centring on FbF pilots and operations by National Societies and the World Food Programme (WFP).

In December 2015, the three organizations jointly unveiled the first fully operational use of the forecast-based approach – including a release of funds through the WFP’s Food Security Climate Resilience Facility in Guatemala and Zimbabwe where drought risk is high due to El Niño.

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Forecast-based financing