The African Development Bank (AfDB) has introduced the Africa Climate Risk Insurance Facility for Adaptation (ACRIFA) to safeguard countries against the devastating effects of climate-related events.
Dr. Akinwumi Adesina, President of the AfDB, announced this initiative during the African Climate Summit in Nairobi, Kenya.
ACRIFA will expand the AfDB’s existing Africa Disaster Risk Insurance Program, focusing on developing insurance solutions to help African nations, particularly their agricultural sectors, prepare for, adapt to, and build resilience against climate change’s adverse impacts like flooding and drought.
The facility aims to raise an initial $1 billion in concessionary high-risk capital and grants, catalyzing the adoption of insurance solutions to support countries, businesses, and communities in adapting to climate change.
President Adesina emphasized the necessity of addressing extreme weather patterns, which disproportionately affect millions of African farmers, the majority of whom are women. Ensuring that farmers have access to crop and livestock insurance is one way to mitigate these challenges.
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 collaborate with primary insurers across Africa to facilitate business opportunities with continental and international reinsurers and assist national governments in managing climate-related disasters more effectively.
Comoros President Azali Assoumani, Chair of the African Union, hailed ACRIFA as an essential innovation, particularly given the frequency and impact of natural disasters in African countries. He stressed the importance of building adaptation and resilience capacities to counter climate change’s adverse effects.
Ibrahima Diong, the Director-General of the African Risk Capacity Group and United Nations Assistant Secretary-General, noted that ACRIFA would complement the group’s efforts. He emphasized the importance of early warning systems and risk transfer, which would help build data to feed these systems
Martin Frick of the World Food Programme expressed excitement about ACRIFA’s potential to expand insurance coverage to farmers who require it. He highlighted the facility’s role in unlocking private sector capital and fostering trust in the market.
Following a panel discussion on the facility’s potential, Dr. Beth Dunford, AfDB’s Vice President for Agriculture, Human, and Social Development, emphasized the need for swift action.
She underlined that a thriving climate insurance industry in Africa could significantly impact lives and allow the continent not only to survive climate uncertainties but to thrive in them.
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