Fiji’s micro, small and medium-sized enterprises are set to gain a dedicated climate risk financing pathway, with the announcement of a new partnership between the Asian Development Bank, the UN Capital Development Fund and the UN Development Programme. The collaboration was unveiled at the Grand Pacific Hotel in Suva and centers on building a parametric insurance market designed to shield MSMEs from disruptions caused by extreme weather linked to climate change.
Key elements of the initiative include a focus on designing and piloting climate risk insurance tailored for Fiji’s MSMEs, and creating the supporting market infrastructure so local insurers can offer accessible products. Technical assistance is provided through the Asia Pacific Climate Fund, valued at about $950,000, which will map the current insurance landscape for Fiji’s small businesses and develop practical climate risk solutions in partnership with local insurers. The effort also builds on the momentum of the Pacific Insurance and Climate Adaptation Programme, which has been delivering parametric insurance to vulnerable communities across the region.
UNDP Fiji Representative Munkhtuya Altangerel underscored the need for insurance solutions that are specifically crafted for Fiji’s MSME sector, noting that a proper safety net will help businesses weather climate shocks with greater resilience and speed. ADB’s Emma Allen described the partnership as a timely and essential step toward expanding climate risk financing for Fiji’s small enterprises, stressing that climate risks threaten livelihoods and raise the cost of doing business in an era of increasing weather volatility.
Parametric insurance, the core mechanism being promoted, pays out when pre-set trigger conditions—such as rainfall levels or wind speeds—are met. Because payouts are triggered automatically by defined events, there is no need to prove actual losses, enabling rapid support to keep MSMEs operating or to restart quickly after a disaster.
This effort forms part of a broader push to broaden climate risk protections in Fiji. Earlier programs under similar umbrellas have already begun extending coverage to thousands of households, with partnerships involving the Reserve Bank of Fiji, SUN Insurance, Tower Insurance and the InsuResilience Solutions Fund. Those initiatives are designed to deliver fast, predictable assistance from weather-related shocks and disasters, and to strengthen long-term financial resilience as Fiji continues to adapt to climate risks.
The new program is envisioned as a two-year effort, aligned with plans to scale up climate risk financing across the country. It will work with local partners to identify demand and tailor products, ensuring that insurance tools are accessible to a wide range of small businesses, including those in agriculture and services that are vulnerable to climate disruptions.
A broader context highlight: Fiji’s national strategy on financial inclusion and resilience continues to drive the development of accessible, affordable climate risk insurance. By integrating technical research, market development, and collaboration with local insurers, the initiative aims to deliver tangible protections that can reduce downtime after extreme weather and help MSMEs recover with greater dignity and speed.
What this means for Fiji’s MSMEs
– A more reliable safety net against climate shocks, reducing the risk of closures after events like floods, cyclones or droughts.
– Access to faster payouts that can cover operating costs, payroll, or recovery needs during critical windows.
– A foundation for broader financial resilience, enabling small businesses to invest in risk-reducing improvements with more confidence.
Summary
A new regional alliance backed by ADB, UNCDF and UNDP is establishing a dedicated climate risk financing channel for Fiji’s MSMEs, anchored by parametric insurance and supported by a $950,000 technical assistance program. The move complements ongoing efforts to expand climate risk protection nationwide and signal Fiji’s continued push toward resilient, inclusive growth in the face of mounting climate threats. Positive momentum is building as insurers, development partners and government agencies work together to bring faster, clearer protection to small businesses and communities across Fiji.
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