Alternative Finance Lab (AltFin Lab) is helping UNDP Bosnia and Herzegovina and their national and regional partners in the Vrbas region in designing an Forecast Based Financing mechanism that seeks to attract insurance investment into addressing the risk on the basis of the forecast based triggers.

Based on the Red Cross/Crescent Climate Center Forecast Based Financing model UNDP Bosnia and Herzegovina is piloting implementation of using weather forecasting models for raising financial support of regions that might be hit by extreme weatherUltimately our intention is not only to minimize the risk and secure funds before a disaster has received sufficient media support but also to test the feasibility of attracting new sources of funding (think insurance companies) for community resilience.

At the same time, UNDP AltFin Lab is exploring a possibility to link Forecast Based Financing to Climate Change adaptation finance (eg. loss of biodiversity and impact on economic sectors with large percentage of marginalized groups; declining tourism arrivals and impact of marginalized groups), not only disaster risk reduction finance.