Pre-arranged Protection Delivers Practical Payout in Tonga

The impact of pre-arranged disaster risk finance was demonstrated in Tonga this week with the formal presentation by PCRIC CEO, Mr. Aholotu Palu, of a USD $18,480 (TOP $42,500) cheque to the Prime Minister, Hon. Lord Fakafanua, and Minister of Finance and Member for the Niuas, Hon. Lata Tangimana.

The payment was made in accordance with the terms of the national drought protection policy Tonga has in place with PCRIC. A prolonged lack of rainfall in the Niuas, Tonga’s northern most island cluster, activated the ‘Short-term Preparedness’ trigger within the policy, leading to an ‘Early/Anticipatory Action’ payout.

The purpose of such payouts is to assist the government with the cost of early-stage preparations in impacted communities, ahead of further potential deterioration of conditions there. This unique feature of PCRIC’s drought policy aims to directly enhance the resilience of vulnerable communities and reduce the scale of fiscal impact should drought conditions persist.