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The African Development Bank has unveiled the Africa Climate Risk Insurance Facility for Adaptation (ACRIFA), an initiative is aimed at insulating countries against catastrophic weather-related events.
The facility, which will be hosted by the Bank, expands its pioneering Africa Disaster Risk Insurance Programme 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.
African Development Bank Group President Dr Akinwumi Adesina announced the new adaptation facility on 6 September 2023, at a side event held at the Africa Climate Summit in Nairobi.
He said it would raise an initial $1bn 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,” he added.
ACRIFA will also extend credit insurance to investment portfolios related to climate, agri-food systems and enterprise development, as well as engage primary insurers across Africa to ensure business opportunities flow through them to continental and international reinsurers. In addition, it will support national governments to more efficiently manage climate disasters.
Comoros President Azali Assoumani, chair of the African Union, who spoke at the event, described it 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.”
Ibrahima Diong, director-general of the African Risk Capacity Group and United Nations assistant secretary-general, said that the 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,” he said.
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