Global Report on Internal Displacement 2025

The Way Forward

Financing Internal Displacement
The ever-growing number of IDPs results from a failure to reduce people’s vulnerabilities to displacement and support those displaced in resuming the lives they left behind. Doing so requires not only immediate interventions to sustain their livelihoods and ensure their protection, but also forward-looking investments and plans. The responsibility for undertaking such measures lies with national governments, and some have invested significant amounts of public funding in doing so, including Colombia, Iraq and Libya.

Few of the world’s most affected countries, however, have enough resources to succeed. Sixty-two per cent of IDPs lived in low-income countries in 2024, and 21 per cent in lower-middle-in- come countries. Billions of dollars are spent each year in international aid for people affected by internal displacement, but humanitarian funding has been in decline and by its nature is only intended to provide temporary support.

The widening funding gap can only be filled by other sources. The UN Secretary General has already called for international financial institutions and bilateral donors to address internal displacement proactively and systematically in development financing, but progress has been slow. The World Bank and African Development Bank recently introduced displacement-specific indicators in their monitoring mechanisms, and a working group of international financial institutions, UN agencies and bilateral donors has been created. The Asian Development Bank (ADB)’s new disaster risk management action plan commits to supporting developing member countries in harnessing development finance to address displacement.

The potential of development financing has yet to be harnessed, but the mechanisms are in place and sometimes already used to prevent and resolve displacement. More than 45 per cent of the projects funded by the ADB in 2023 had disaster risk management features, which help to reduce displacement risk.Affected governments can draw on their country allocations, a financial envelope that multilateral development banks attribute to support their pre-identified priorities over four or five-year periods. Other mechanisms, such as thematic windows or trust funds, which focus on particular issues such as climate change adaptation, disaster risk reduction, crisis response or poverty reduction, can be used to address the causes of displacement and mitigate risks. 

Multilateral development banks can also provide much-needed liquidity to restore housing, infrastructure and livelihoods for displaced people, paving the way for longer-term solutions. The European Bank for Reconstruction and Development injected hundreds of millions of euros into the reconstruction of sustainable infrastructure and support for livelihoods in cities affected by 2023 earthquakes in Türkiye, encouraging IDPs’ return and reintegration.

Climate finance, through the Green Climate Fund, the Adaptation Fund, climate investment funds, the Global Environment Facility or the Fund for Responding to Loss and Damage, are another resource to address displacement linked to disasters and climate change. The private sector and innovative financing mechanisms are other options, but examples of investments that target internal displacement are rare.

To secure development, climate and private-sector financing, affected governments must be able to submit convincing proposals that identify the actual and anticipated impacts of internal displacement on their economies, and that show cost-effective ways to address them as well as realistic measures of progress towards achieving their goals. For this, they need comprehensive data and a strong evidence base, which many countries still lack today. Progress in the coverage, granularity and timeliness of displacement data, advances in risk modelling and climate attribution analyses, and the improved collection, harmonisation and sharing of data on IDPs’ profiles and needs in an increasing number of countries are paving the way for stronger funding proposals. Governments, however, need more robust evidence to help them connect this issue to other national priorities, including data on the scale of the phenomenon, the demographic and socioeconomic characteristics of their displaced populations, the duration of their displacement and its impacts on livelihoods and the broader economy. 

Donors have a key role to play in facilitating evidence-based strategies and funding proposals, including by supporting offers for technical assistance, simplifying procedures and mechanisms and investing in national capacities to collect and analyse data and strengthening national data systems.

​Global Report on Internal Displacement 2025. Internal Displacement Monitoring Centre. Norwegian Refugee Council. Geneva, Switzerland.