The African Development Bank(AfDB) has unveiled the Africa Climate Risk Insurance Facility for Adaptation (ACRIFA) to insulate countries against catastrophic weather-related events.
The AfDB’s President, Dr Akinwumi Adesina, said this in a statement on the bank’s website.
Adesina spoke on the sidelines of the African Climate Summit in Nairobi, Kenya.
The facility, which will be hosted by the bank, expands its pioneering Africa Disaster Risk Insurance Program into a facility that will develop insurance to help African countries.
“Specifically, their agriculture sectors, prepare for, adapt, and build resilience against adverse effects of climate change such as flooding and drought.
‘It will raise an initial one billion dollars of concessionary high-risk capital and grants to catalyze the development and uptake of insurance solutions.
“This will help countries, businesses and communities adapt to climate change,” he said.
According to the AfDB boss, the initiative is the bank’s effort to scale up support to protect countries and households against extreme weather patterns.
He said extreme weather patterns negatively impact the livelihoods of millions of farmers in Africa, the majority of whom are women.
According to him, one way of tackling this issue is to ensure farmers have access to crop and livestock insurance.
“The Africa Climate Risk Insurance Facility for Adaptation will extend credit insurance to investment portfolios related to climate, agri-food systems, and enterprise development.
“It will engage primary insurers across Africa to ensure business opportunities flow through them to continental and international re-insurers.
“In addition, it will support national governments to more efficiently manage climate disasters,” he said.
The Comoros President Azali Assoumani, Chair of the African Union, who spoke at the event described the initiative as a necessary innovation.
“Considering the frequency and impact of national disasters in African countries, ACRIFA has come at a time when African countries are facing enormous challenges affecting agriculture, such as floods and drought.
“It will help us to strengthen our adaptation and resilience capacities.
“Comoros is just 2,000 square kilometers. We cannot unlock our tourist potential when we face severe climate risks.
“And therefore the importance of this facility to Comoros, which continues to experience adverse realities of climate change,” he said.
Ibrahima Diong, the Director-General of the African Risk Capacity Group and United Nations Assistant Secretary-General, said ACRIFA would help to scale up what the African Risk Capacity Group is doing.
He said risk transfer is not just about premiums but also about what happens before the disaster strikes, hence the facility which would help to build data that feeds early warning systems in Africa.
He said ACRIFA would expand partnerships to carry out services to clients, such as the World Food Programme.
Martin Frick of the World Food Programme expressed excitement about ACRIFA’s potential to expand insurance coverage to farmers who need it.
Frick said, “The Facility will help to unlock private sector capital and we can inject trust in the market and unleash more capital than is currently provided in the market.”
Following a panel discussion about the facility’s potential, AfDB’s Vice President for Agriculture, Human and Social Development, Dr Beth Dunford, said it needs to move into action quickly.
“What we are talking about today, is not just about policies; the impact of a thriving climate insurance industry in Africa is about lives.
“It is about an Africa that doesn’t just survive in climate uncertainties but thrives in them,” she added.
