World Bank Approves $125 Million Program to Support a Green and Resilient Kerala

Washington: The World Bank Board of Executive Directors has approved a $125 million program to support Kerala’s preparedness against natural disasters, climate change impacts, disease outbreaks, and pandemics.

The heavy monsoons of 2018 were the worst Kerala had seen in nearly a century, triggering devastating floods and landslides. It impacted more than 5 million people, mainly in the Pamba River Basin.

The Resilient Kerala Program will focus on two key areas. First, it will incorporate disaster risk planning in the master plans of urban and local self-governments to ease financial constraints on the state government when faced with unexpected shocks. Second, it will help make the health, water resources management, agriculture, and road sectors more resilient to calamities.

The program is part of a programmatic series of Bank-financed operations in the state. The First Resilient Kerala Development Policy Operation (DPO) approved in June 2019 undertook several initiatives. It helped the state draft a River Basin Conservation and Management Act, which will conserve and regulate water resources and ensure their sustainable management, allocation, and utilization. It also introduced climate-resilient agriculture, risk-informed land use, and disaster management planning. The program laid the foundations for a 5-year State Partnership Framework.

“In today’s context of increased economic, climatic, and health shocks, building resilience of economies is a policy imperative,” said Junaid Ahmad, World Bank Country Director in India. “The Bank is therefore investing in Kerala’s capabilities to respond to shocks to the state economy and, importantly, prevent as much as possible the loss of lives, assets, and livelihoods. The objective is not to finance schemes but partner with the Government of Kerala to improve the state’s financial health; invest in sectors like health, water resources, social protection and agriculture; and address the drivers of natural disasters, climate change, and pandemic risks.”

The program will be statewide. In the Pamba River Basin, Kerala will test a multisectoral approach in Idukki, Kottayam, Pathanamthitta, and Alappuzha districts. This area is a microcosm of the state, with tropical monsoon forests, dense urban settlements, and the rice bowl of Kerala in its lowlands. Its success will have a demonstration impact across the state.

Support to key sectors under the program include:

Sustainable fiscal and debt management. Limited fiscal space and high debt have severely constrained Kerala’s ability to deal with unexpected shocks. The program will establish a debt management unit in the Department of Finance to support the state’s efforts to scale down its debt-to-GSDP ratio to a sustainable trajectory.
Disaster risk finance and social protection. To provide timely and adequate assistance to vulnerable households, the program will develop a comprehensive disaster risk financing framework; create a unified database of vulnerable households for post-disaster safety net payments; pilot a modified crop risk insurance payment system; and mobilize market-based resources to complement public financing of disaster risks.
Disaster and climate-resilient urban development. To deal with future disasters, Kerala has introduced risk-informed urban master planning, multi-year investment budgeting, and emergency management. The program will support these efforts to increase the state’s climate adaptation and mitigation initiatives.
Resilient public health systems. High population density and a large forest cover have increased Kerala’s vulnerability to large-scale disease outbreaks, including COVID-19. The program will establish an IT-enabled One Health platform that will strengthen coordination, joint surveillance, and preparedness to counter future disease outbreaks.
Integrated and sustainable water resources management. During the first program, the state prepared a draft River Basin Conservation and Management Act and set up a River Basin Conservation and Management Authority (RBCMA). This program will strengthen RBCMA to regulate the state’s water resources and ensure its sustainable management, allocation, and utilization. A flood forecasting system in the Pamba river basin will benefit millions by mitigating the risks of floods and drought.
Sustainable and resilient food systems. Through the first engagement, the state adopted agro-ecological zoning (AEZ) methods to promote farming systems that are resilient to climate shocks. Along with supporting AEZ-based approaches, the program will set up an Integrated Agricultural Management Information System for precision farming.
Climate-resilient road infrastructure. The program will upgrade 400 km of the core road network through output- and performance-based road maintenance contracts. A Road Maintenance Management System will roll out climate-proof designs and ensure that adequate budgets are made available.
“The groundwork laid during the first program improved the government’s capacity to assess and respond to disasters. The new program aims to enhance the state’s capacity to deal with potential shocks by mainstreaming climate and disaster risks into planning and investment processes,” said Elif Ayhan, Senior Disaster Risk Management Specialist and one of World Bank’s Task Team Leaders for the program.

The $125 million loan from the International Bank for Reconstruction and Development (IBRD) has a final maturity of 14 years including a grace period of six years.