Hue becomes the first city in Viet Nam to test innovative climate disaster risk financing at city level.
The Urban Climate Change Resilience Trust Fund (UCCRTF) held the kickoff workshop for its Disaster Risk Financing for Hue Project in Hanoi and Hue in 8 and 9 October 2019. This is part of the Secondary Green Cities Development Project funded by the Asian Development Bank (ADB) that aims at improving the institutional, regulatory, and financial environment of Hue City to better manage the cost of extreme weather events by adopting disaster insurance.
This makes Hue the first city in Viet Nam to pilot the application of the Law on Management and Use of State Property, which mandates that “public assets of high value and high-risk of natural disasters” shall be entitled to buy insurance.
In this context, the project will identify and analyze such high-value and high-risk public assets located within the city and assess disaster insurance feasibility, considering various elements including national regulations, potential city government financing sources, and institutional environment. After the legal and regulatory issues are addressed, the project will support the city in becoming covered by the most cost-efficient disaster insurance instrument – either parametric or indemnity-based – by providing a subsidy up to three years on a pilot basis.
Through this pilot, the project is intended to support Vietnamese cities to overcome institutional challenges in adopting similar instruments and to replicate this model, and ultimately increase resilience of their cities against risks of climate change and disasters.
Back-to-back workshops in Hanoi and Hue
In the Hanoi workshop, the project background, objective, and methodology were presented by ADB, UCCRTF, and the consulting team (formed by Willis Towers Watson and Halcom Vietnam Joint Stock Company). Representatives of the State Secretariat for Economic Affairs of Switzerland (SECO) also presented relevant initiatives in Viet Nam.
(Willis Towers Watson)
More than 40 government participants joined the kickoff workshop in Hanoi (photo by UCCRTF).
The workshop gathered more than 40 representatives from Hue City and Thua Thien Hue province, Ministry of Finance (and Insurance Advisory Authority), Ministry of Natural Resources and Environment, Ministry of Agriculture and Rural Development, and private sector, including Vietnam National Reinsurance Cooperation and Vietnamese Insurance Association.
The Hanoi workshop was followed by a workshop in Hue, inviting stakeholders from both the city and province. Bilateral meetings with relevant departments and agencies were also held to capitalize on the enthusiasm and follow-up with in-depth conversations and collect data. It was clear that the objectives of this project can be delivered if a coalition of actors are actively engaged.
Next steps include the identification and collection of further data characteristics and the continued research into the policy and regulatory environment for disaster insurance in the country.
Workshop participants in Hue (photo by UCCRTF).
Hue is one of the three secondary cities under the Green Cities project. In addition to this disaster risk financing project, UCCRTF supports Hue City in implementing a community-led project and developing an e-mobility strategy. The city is also a pilot city under the Spatial Data Analysis Explorer (SPADE) platform, a geospatial data repository led by ADB and UCCRTF.