Why infrastructure must shift from disaster recovery to resilience in a high-risk world
Climate change is intensifying natural hazards that many infrastructure systems, particularly in developing Asia and the Pacific, were not built to withstand. Annual average losses from disasters have been rising globally and are estimated at more than $170 billion in Asia and the Pacific. Breaking the cycle of reactive recovery and rebuilding will require climate-resilient infrastructure, supported by development partners, including multilateral development banks (MDBs), through financing, standards, and risk-informed planning.
This calls for a paradigm shift. The region, like much of the world, is investing far more in mitigation than in adaptation and resilience. Of total global climate financing, less than 4% has gone to resilience. At the same time, continued investment in mitigation remains essential to limit the adverse impact of climate change on infrastructure systems. In practice, mitigation and resilience efforts need to be much more closely aligned.
Greenhouse gases emitted by human activities have risen sharply over the last century, altering the climate system, precipitation patterns, and global temperatures and leading to more frequent and severe climate-related disasters. These hazards pose a growing and systemic threat to infrastructure systems, such as transport networks, energy systems, water and sanitation facilities, and telecommunications, that were not planned or constructed for today’s risk environment.
Flooding can wash out roads and bridges, inundate railways, and overwhelm drainage and wastewater systems. Prolonged heatwaves can degrade pavements and rail tracks and reduce the efficiency of power generation and transmission. Coastal infrastructure faces growing exposure to sea-level rise, erosion, and saltwater intrusion, which can weaken structures, accelerate corrosion, and cause repeated service disruptions. Climate shocks act as powerful risk multipliers, exposing weaknesses in design standards, materials, land-use planning, and governance. Informal settlements, often served by fragile or incomplete infrastructure, are especially vulnerable, deepening social and spatial inequalities.
As infrastructure systems are deeply interconnected, failures in one sector can trigger cascading disruptions in others. When transport networks fail, supply chains stall, markets are cut off, and the movement of people, goods, and emergency services is constrained, exacerbating the overall economic burden. Power outages can cripple water supply systems, healthcare facilities, telecommunications, and industrial production. Damage to water and sanitation infrastructure heightens the risk of disease outbreaks, particularly in flood-affected areas. Schools and hospitals may become inaccessible or inoperable, undermining human capital development and weakening social resilience.
Repeated climate shocks can force governments into a costly cycle of repair and reconstruction, diverting scarce public resources away from long-term development priorities such as education, health, and poverty reduction. Over time, the cumulative effects of climate-related infrastructure damage can erode economic productivity, widen inequality, and weaken public trust in institutions.
We saw these dynamics after severe flooding affected Bangladesh, India, Indonesia, Sri Lanka, Thailand, and Viet Nam in late 2025. The floods caused widespread damage to homes, productive assets, and critical infrastructure, resulting in estimated economic losses of more than $20 billion. Damage to key transport corridors, ports, energy grids, and water systems disrupts domestic and regional supply chains, curtails trade and tourism, and reduces industrial and agricultural output. These impacts can extend across borders, increase insurance losses, raise borrowing costs, deter private investment, and further constrain economic growth and fiscal space over the long term.
As climate risks intensify, infrastructure planning must shift toward sustaining growth, protecting development gains, and strengthening resilience. This is where MDBs, working closely with a wide range of development partners, can play a catalytic role through financing, policy engagement, technical assistance, and knowledge generation.
MDBs can advance climate-resilient infrastructure by providing long-term, concessional, and blended financing that enables governments to invest in projects with higher upfront costs but strong long-term benefits. By integrating climate risk into project appraisal and lending decisions, MDBs can help shift investment priorities away from repeated post-disaster reconstruction and toward prevention and resilience.
MDBs can also support the mainstreaming of climate considerations into infrastructure planning and design through climate screening tools, stress testing, and updated engineering standards that reflect future climate conditions. In addition, MDBs can act as conveners and knowledge hubs, supporting regional cooperation, cross-border planning, and evidence-based policymaking.
To achieve these objectives, MDBs also have an important role to play in mobilizing private capital and deploying innovative financing instruments, such as guarantees, public–private partnerships, and green or resilience bonds, to scale up investment. MDB-supported projects can increasingly combine climate-informed design, durable construction, and nature-based solutions to reduce exposure to climate risks.
Ultimately, MDBs can help countries integrate climate risk systematically into infrastructure policy, financing, and asset management by strengthening institutions and supporting policy reforms. Together, these approaches can shift practice from reactive disaster response to proactive risk reduction, enabling infrastructure that is more robust, inclusive, and resilient to escalating climate impacts. Considerable progress has been made over the past several decades to mainstream environmental, social, and governance considerations in infrastructure planning and investment. Resilience, however, has not received the same level of attention. It is time to shift the paradigm, because resilient infrastructure is not only safer and more durable but also more bankable.