A06 · PROCESS · scenariosGRA dossier · service level R0
GRADevelopment Finance NexusEstablished
Sector scenarios

Published scenarios

Sector-level scenarios for Development Finance Nexus are published here with their assumptions and limits. They describe aggregate exposures; they are not forecasts and not investment advice.

Publisher
The Global Risks Alliance
Field
Development finance, Critical infrastructure, Economic development
Canvas · scoping to reviewDesign, not a record
Published scenarios: climate scenario analysis pipelineOrderly, disorderly and hot house scenarios supply pathways for carbon prices and macro variables; transition and physical channels change sector and asset outcomes; credit parameters and portfolio losses follow, and results are disclosed with their limits. Design of the process, not a record of a run.

Fig.A programme from scoping to the owner's decision. Design, not a record.

01In brief

The short answer.

Development Finance Nexus sector scenarios are published, aggregated descriptions of how exposures in the development finance field could evolve under stated assumptions, read against frameworks such as Environmental and Social Framework. They describe sector-level exposures with their limits; they are not forecasts, assess no individual firm and are not investment advice.

02Spatial finance

A drought index against its attachment point.

How a dry season is read against the point where drought cover starts to pay. Synthetic season and design terms.

A rainfall season across the Sahel, read against the points where drought cover would start and stop paying.Synthetic season and design terms; no cover is implied.
03Status

Releases appear as they are reviewed.

Analysis runs in Nexus Foundry; reviewed releases are listed here.

04Scenario design

Design-life scenarios for infrastructure and services.

ElementContentSource
Hazard change over design lifeFlood, heat, drought and wind at future periodsIPCC AR6 projections, national climate services
Service disruptionDays of lost service under each hazard levelEngineering fragility and dependency data
Economic effectLost output and recovery spending in the service areaEconomic analysis with stated assumptions
Financing responseWhich layer would pay for repair and continuityDisaster risk finance layering
05Food, water, energy

A drought scenario for an irrigation investment.

A drought scenario for an irrigation or hydropower investment reads a seasonal index against reservoir and crop needs, then shows where a parametric drought cover would attach. Values in GRA figures are synthetic. Hydrology evidence at GCRI drought and flood; topic depth at food, water and energy investment.

06Key terms

Terms used on this page.

Each term as this page uses it. Where a standard-setting body defines the term, the wording follows that body.

TermDefinition
ScenarioA plausible description of how the future may unfold under stated assumptions, not a prediction.
Severe but plausible scenarioA disruption scenario extreme enough to test resilience yet realistic enough to occur.
Reverse stress testStarting from a failure outcome and identifying the scenarios that would cause it.
Investment adviceA personal recommendation on investments, a regulated activity in most jurisdictions.
07Sources

Where this page's references lead.

The bodies and documents this page is read against. Status and editions change; each link goes to the issuing body.

08Questions

Questions and answers.

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Development Finance Nexus

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