New corporate investment scheme helps fund UN quake relief efforts in Pakistan

5 April 2006
Earthquake survivors in Muzaffarabad

As part of a strategic move to broaden its donor network and engage in innovative fund raising by entering the capital market, the United Nations refugee agency has teamed up with two Swiss with investment companies in a scheme that will benefit its earthquake relief operation in Pakistan.

The joint project launched by the UN High Commissioner for Refugees (UNHCR), Zurich-based Société Générale Corporate & Investment Banking, and derilab s.a., a derivatives company, will allow investors to participate in a financial product that affords a unique opportunity to support reconstruction and relief effort in Pakistan-administered Kashmir.

“As UNHCR is 97 per cent funded by voluntary contributions, every single year we have to go out to donors and find $1.5 billion of contributions in order to keep refugees alive,” the head of the agency’s Private Sector Fund Raising Unit, Pierre-Bernard Le Bas, said.

“That’s a big job, a big challenge and companies like derilab s.a. and Société Générale Corporate & Investment Banking are helping us find new ways to do that.”

Under the scheme, the Kashmir Relief Note, at inception 2 per cent of the investment is automatically donated to UNHCR’s earthquake relief operations. This means that for the relatively small minimum investment of $10,000, the UN agency will receive $200, which is enough to buy two tents for two families of five.

The rest is invested through a basket of funds in the Indian sub-continent. At maturity, the investor will receive 100 per cent of his invested capital and participate in the positive performance of the underlying basket.

Under the leadership of its new High Commissioner, António Guterres, UNHCR has set a very aggressive target for private sector fund raising in the coming years. By 2012, it would like to raise 10 per cent of its annual budget from the private sector.

In Pakistan, UNHCR has helped with running 160 relief camps that have housed over 140,000 survivors of October’s quake during the freezing winter months. With the arrival of spring, many thousands of families are leaving these camps, but are still living in tents beside the huge piles of rubble that are all that remain of their former homes.

Rebuilding these mounds of stone and brick into new houses is part of the enormous challenge they now face. To help them survive the tough conditions, UNHCR has distributed blankets, plastic sheeting, tents and stoves. But much more is needed to assist survivors in the reconstruction phase and in their return to normality.


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