AfDB unveils insurance facility to cushion against climate change impacts

By Cynthia Ezekwe

In a concerted effort to scale up support to insure countries and households against extreme weather patterns, the African Development Bank (AfDB) has unveiled the Africa Climate Risk Insurance Facility for Adaptation (ACRIFA).

The facility expands the bank’s  pioneering Africa disaster risk insurance programme into a facility that will develop insurance to help African countries, specifically, the agriculture sector, prepare for, adapt and build resilience against adverse effects of climate change such as flooding and drought.

Akinwumi Adesina, the AfDB president  announced the new adaptation facility recently, at a side event held at the Africa Climate Summit in Nairobi, noting that the initiative is aimed at insulating countries against catastrophic weather-related events.

He said it would raise an initial $1 billion of concessionary high-risk capital and grants to catalyse the development and uptake of insurance solutions to help countries, businesses and communities adapt to climate change.

“Extreme weather patterns negatively impact the livelihoods of many millions of farmers in Africa, the majority of those being women. One way we can tackle this issue is to be sure that farmers have access to crop and livestock insurance,” Adesina said.

According to the AfDB president, the insurance initiative will also extend credit insurance to investment portfolios related to climate, agri-food system and enterprise development, as well as engage primary insurers across Africa to ensure business opportunities flow through them to continental and international re-insurers, and additional support national governments to manage climate disasters more efficiently.

Azali Assoumani, Comoros president and chair of the African Union, who also spoke at the event, described the programme as a necessary innovation, considering the frequency and impact of national disasters in African countries.

According to Assoumani, ACRIFA will help strengthen the adaptation and resilience capacities of African countries facing enormous challenges affecting agriculture, such as floods and drought.

Ibrahima Diong, director general of the African Risk Capacity Group and United Nations assistant secretary-general, noted that ACRIFA  will help to scale up what the African Risk Capacity Group is doing.

“Risk transfer is not just about premiums. It is also about what happens before the disaster strikes. The facility will help to build data that feeds early warning systems in Africa. ACRIFA will expand on partnerships to carry out services to clients, such as the World Food Programme,’’ Diong added.

On his part, Martin Frick, a director  of the World Food Programme, expressed excitement about ACRIFA’s potential to expand insurance cover to farmers, noting that the facility  will help to unlock private sector capital.