Bates Wells has advised the international charity Tearfund on a ground-breaking risk transfer transaction supporting their humanitarian relief activities in Nepal, Ethiopia, Malawi and Pakistan. The transaction involves the provision of a natural disaster risk transfer facility from Global Parametrics, part-funded by Humanity Insured.
Global Parametrics is an organisation that structures parametric risk transfer solutions to protect vulnerable communities and build natural disaster resilience where it is most needed. Humanity Insured is an international charity set up with the backing of the insurance industry, which empowers frontline communities to build resilience in the face of climate change.
The transaction uses bespoke financing and climate derivative technology to allow Tearfund to more effectively finance their humanitarian response in drought-affected areas of the world.
Sung-Hyui Park, Partner, and Edward Crane, Associate, who specialise in impact finance, advised on the transaction in collaboration with derivatives experts at Travers Smith.
Sung-Hyui Park, Partner at Bates Wells, commented: “Our impact finance team has been delighted to assist on this important transaction. It is increasingly crucial to find innovative solutions to mitigate the enormous human suffering that will result from the climate crisis. Tearfund’s use of weather derivatives is at the cutting edge and will be a model for international NGOs operating in this space in the future.”
Read more about the project here.