Forecast-based Financing Financial Mechanism

For Red Cross and Red Crescent National Societies, one of the financial mechanisms available to fund the activities included in their Early Action Protocols is the Forecast based Action (FbA) by the DREF, which was launched in May 2018. 

The International Federation of Red Cross and Red Crescent Societies (IFRC) has extended the scope of its long-standing global financing instrument, the Disaster Relief Emergency Fund (DREF) to include FbA. FbA by the DREF provides multilateral funding to National Societies, with an already developed EAP that need to secure financial resources in advance, for its implementation, which is one of the key elements of Forecast based- Financing.

Any National Society, with a developed EAP – in some cases developed with support from Partner National Societies - can apply to the FbA by the DREF. The Forecast based Action Fund is managed by the IFRC Disaster and Crisis, Prevention, Response and Recovery department.

Key elements of the FbA by the DREF

Who can apply: Red Cross and Red Crescent National Societies with a developed Early Action Protocol (EAP) that meets the IFRC quality criteria.

Type of hazards:
extreme hydrometeorological events

Possible amount to be funded: Up to 250,000 CHF

EAP Timeframe: 5 years

EAP Target population: Minimum of 1000 households.

Costs that can be included in the EAP:

  • Readiness Costs: these include any ongoing costs and services that are deemed indispensable for subsequent trigger-based activation of an Early Action Protocol. The readiness costs can not exceed 25% of the total EAP budget.
  • Stock pre-positioning: Procurement of relief items that are needed as preparatory measures to be ready and implement the trigger-based early actions. The pre-positioning of stock cannot exceed 40% of the total EAP budget. Any requests above must be justified. Pre-positioned stock should include relief items which can be stored over the lifespan of the EAP ensuring adequate storage facilities, suitable transport links and appropriate insurance.
  • Trigger-based Early Actions: Activities included in the EAP to be taken once the trigger is reached and that will reduce the impact of the extreme weather event.

The templates for the FbA by the DREF can be found under: