NextGen Drought Index Dashboard - Designing and piloting a new satellite data platform to strengthen drought risk financing in the Horn of Africa

One of the biggest strengths of parametric drought insurance products is that they can trigger payouts independently from observed losses (and expensive loss assessments), potentially increasing the speed of payouts and lowering premiums. To support low-income countries in formulating policies and developing instruments aimed at enhancing their financial resilience against drought, the World Bank’s Crisis and Disaster Risk Finance (CDRF) team and DHI are developing a novel drought risk finance dashboard. The overarching objective is to improve the transparency and accountability related to the development of drought risk financing instruments to strengthen national decision-making and risk ownership in low-income countries. The NextGen Drought Index (NGDI) dashboard is being piloted in Ethiopia, Kenya, and Somalia, with the vision to be implemented across Africa, and ultimately, on a global scale. The new tool allows users to access, visualize, and analyze historical and current drought conditions alongside socio-economic data, such as food insecurity. This enables users to close the critical gap between drought hazard, drought impact, and the performance of financial products. The dashboard optimizes the use of satellite-derived climate datasets, such as estimates of precipitation, soil moisture and vegetation greenness. It empowers users to combine and benchmark climate data from diverse Earth Observation (EO) platforms. This dynamic approach enables the assessment of drought risk and its temporal progression. Since the data must be analysed at a consistent geographical scale, all climate and environmental variables are aggregated and preprocessed for further analysis by governmental partners or regional stakeholders. The NGDI dashboard will be added to the CDRF team’s catalogue of tools. All choices regarding the platform’s architecture and technology prioritize sustainability, scalability, and cost-efficient maintenance. The dashboard was developed under the World Bank Disaster Risk Finance and Insurance Program, funded by the Global Shield Financing Facility (GSFF) and the Global Index Insurance Facility (GIIF).