Pioneering Climate Resilience
Nairobi, September 6, 2023 – In a groundbreaking move, the African Development Bank (AfDB) has introduced the Africa Climate Risk Insurance Facility for Adaptation (ACRIFA), aimed at fortifying countries against the devastating impacts of climate change.
This initiative represents a significant expansion of the bank’s pioneering Africa Disaster Risk Insurance Program, focusing on developing insurance solutions to help African nations, particularly their agriculture sectors, prepare for, adapt to, and bolster resilience against climate change-induced adversities like floods and droughts.
A Billion-Dollar Commitment
At the Africa Climate Summit in Nairobi, Dr. Akinwumi Adesina, President of the African Development Bank Group, unveiled the ACRIFA on September 6. The facility’s mission is to raise an initial $1 billion of concessionary high-risk capital and grants, which will serve as a catalyst for the creation and adoption of insurance products.
These products will aid countries, businesses, and communities in adapting to the ever-increasing challenges posed by climate change.
Addressing the attendees, Dr. Adesina emphasized the critical need for such an initiative:
“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.”
Expanding Scope and Impact
The Africa Climate Risk Insurance Facility for Adaptation aims to extend credit insurance to investment portfolios related to climate, agri-food systems, and enterprise development. It will also collaborate with primary insurers across Africa to facilitate business opportunities for continental and international reinsurers.
Furthermore, the facility is set to support national governments in the more efficient management of climate-related disasters.
A Necessity for African Nations
Comoros President Azali Assoumani, who serves as the Chair of the African Union, expressed the vital importance of ACRIFA:
“Considering the frequency and impact of natural 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.”
Unlocking Tourism Potential
“Comoros is just 2,000 square kilometers. We cannot unlock our touristic 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.”
Early Warning Systems
Ibrahima Diong, Director General of the African Risk Capacity Group and United Nations Assistant Secretary-General highlighted the multifaceted benefits of ACRIFA:
“The Africa Climate Risk Insurance Facility for Adaptation 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 is poised to expand its partnerships, including collaboration with organizations like the World Food Programme. Martin Frick of the World Food Programme expressed enthusiasm about the potential impact:
“We are very excited about ACRIFA’s potential to expand insurance cover to farmers who need it. The Facility will help to unlock private sector capital. We can inject trust in the market and unleash more capital than is currently provided in the market.”
A Thriving Climate Insurance Industry
Concluding a panel discussion on ACRIFA’s potential, Dr. Beth Dunford, African Development Bank Vice President for Agriculture, Human and Social Development, emphasized the urgency of action:
“What we’re talking about today isn’t 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.”