LocationsBuilding Resilience through Risk Financing
October 8, 2025
Mozambique, one of the countries most exposed to climate-related disasters, has taken another important step in strengthening its financial resilience against shocks. With support from the United Nations Development Programme (UNDP), the Government of Mozambique and partners have launched a three-day training on Climate and Disaster Risk Financing (CDRF). The initiative aims to equip key government institutions with the knowledge and tools needed to integrate insurance and risk financing into national development planning.
Mozambique is no stranger to climate impacts. According to the Global Climate Risk Index 2021, the country ranked as the world’s most affected nation in 2019, following the devastating cyclones Idai and Kenneth. More recently, the World Risk Index 2023 placed Mozambique seventh among 193 countries most at risk of natural disasters. With 60 per cent of the population living along its extensive coastline, the country remains extremely vulnerable to tropical storms and their cascading socio-economic effects.
“Mozambique is on the frontlines of the climate crisis,” said Eunice Mucache, UNDP Program Specialist (Environment, Climate and Resilience), during the opening of the training. “The financial burden of recurring disasters is enormous, and it is vital that we develop sustainable tools to protect our people, our economy and our future development.”
The training in Marracuene is part of UNDP’s Insurance and Risk Finance Facility (IRFF), launched in 2021 under the UNDP Sustainable Finance Hub. The Facility is a flagship initiative designed to expand access to insurance and risk finance solutions, especially in countries most vulnerable to climate change. Currently active in more than 30 countries, IRFF will scale up to 50 countries by 2025, aligning with the InsuResilience Vision 2025 which aims to provide insurance solutions to 500 million people in developing nations.
“Risk financing is not a luxury – it is a necessity,” emphasised Ms Mucache. “Every metical invested in resilience today saves lives, livelihoods and critical resources tomorrow.”
In Mozambique, the IRFF has been operational since 2021. Working in close partnership with the Government, civil society, and the private sector, the programme focuses on three main areas:
Inclusive insurance: building regulatory capacity and supporting the implementation of Mozambique’s new National Financial Inclusion Strategy (2025–2031).
Sovereign risk financing: equipping government institutions to model, measure and manage risks while developing financing solutions to cushion the economy in times of crisis.
Integration of risk financing into development: embedding insurance and financial risk management into national and local planning frameworks, including National Adaptation Plans (NAPs), Nationally Determined Contributions (NDCs), climate policies and disaster risk financing strategies.
The IRFF is underpinned by a landmark public–private partnership signed in 2019 at the UN Secretary-General’s Climate Action Summit. Known as the Tripartite Agreement, it brings together UNDP, the German Federal Ministry for Economic Cooperation and Development (BMZ) and the Insurance Development Forum (IDF), a global coalition of the world’s leading insurers. The Agreement includes a commitment of up to USD 5 billion in risk capacity and co-investment from the private sector, enabling countries such as Mozambique to develop innovative insurance and financial solutions.
Already active in more than 20 countries, the partnership is widely recognised as a unique and transformative model of collaboration. In Mozambique, it has fostered a constructive dialogue with stakeholders such as the Ministry of Finance, the Bank of Mozambique, the Insurance Supervisory Institute (ISSM), the National Institute for Disaster Risk Management (INGD), the World Bank and humanitarian partners.
German Federal Ministry for Economic Cooperation and Development (BMZ) and the Insurance Development Forum (IDF), a global coalition of the world’s leading insurers. The Agreement includes a commitment of up to USD 5 billion in risk capacity and co-investment from the private sector, enabling countries such as Mozambique to develop innovative insurance and financial solutions.
Already active in more than 20 countries, the partnership is widely recognised as a unique and transformative model of collaboration. In Mozambique, it has fostered a constructive dialogue with stakeholders such as the Ministry of Finance, the Bank of Mozambique, the Insurance Supervisory Institute (ISSM), the National Institute for Disaster Risk Management (INGD), the World Bank and humanitarian partners.
“This initiative brings the right actors to the table – government, private sector, development partners and communities – to co-create practical solutions that make sense for Mozambique,” said Ms Mucache.
Since the Facility’s inception in Mozambique, UNDP has worked closely with national partners to build an evidence base for policy action. Following an initial workshop and extensive consultations with stakeholders, a validation workshop was held in November 2024. The meeting resulted in a diagnostic study, which outlines detailed recommendations for advancing inclusive insurance and disaster risk financing in the country.
The study highlighted the urgent need to strengthen government institutions, improve data and modelling capacities, and integrate financial risk management into planning processes. Based on its recommendations, the IRFF is now supporting Mozambique to design interventions that respond to the country’s priorities, while engaging international expertise through the IDF and other partners.
A work plan for 2025, valued at USD 400,000, has already been approved. It aims to create a more enabling environment for inclusive insurance, fostering collaboration between public and private sector institutions to accelerate implementation.
The three-day training in Marracuene, delivered by international experts, focuses on equipping participants with practical tools and knowledge to strengthen decision-making. Civil servants from across government ministries are expected to gain insights into:
the climate and disaster risk context in Africa;
the principles and instruments of CDRF;
the role of data and financial tools in guiding policy;
global best practices and emerging trends in insurance and risk finance.
The methodology combines conceptual discussions with practical group work and networking opportunities, ensuring participants can apply lessons directly within their respective institutions. “Our goal is to ensure that knowledge on risk financing does not remain at the technical level alone, but informs the highest levels of government decision-making,” noted Ms Mucache. “This is how we can ensure Mozambique’s resilience is built into our economic planning and development strategies.” For Mozambique, the stakes could not be higher. The increasing frequency and severity of extreme weather events have placed immense pressure on public finances, communities and households. Without robust mechanisms to transfer risk and mobilise financial protection, development gains remain precarious. By investing in risk financing, Mozambique is signalling its determination to protect its most vulnerable populations, reduce poverty, and accelerate progress towards the Sustainable Development Goals (SDGs).
“We are not starting from zero,” concluded Ms Mucache. “Mozambique has the political will, committed partners, and the right vision. What we need now is to transform this vision into action – with speed, scale and solidarity.”
About the UNDP Insurance and Risk Finance Facility (IRFF)
The IRFF is a UNDP-led global initiative under the Sustainable Finance Hub. It helps countries integrate insurance and risk finance into development, climate and disaster risk strategies. Working with governments, the private sector and civil society, the Facility aims to build resilience by expanding access to inclusive insurance and strengthening financial protection for vulnerable communities. In Mozambique, the IRFF supports the Government to strengthen institutional capacity, advance regulatory reforms, and design innovative solutions for climate and disaster risk financing.
About UNDP
UNDP is the United Nations’ lead agency on international development. Working in more than 170 countries and territories, UNDP helps nations to eradicate poverty, reduce inequalities, and build resilience so that progress can be sustained. In Mozambique, UNDP supports national and local partners to advance peace, recovery, and sustainable development—empowering communities and institutions to build a more inclusive and resilient future for all. Learn more at www.undp.org or follow us at www.undp.org/mozambique.
For more information, contact:
Manuel Mabuiangue, Head of Strategic Partnerships and Communication