The African Development Bank (AfDB) has unveiled the Africa Climate Risk Insurance Facility for Adaptation (ACRIFA), an ambitious initiative designed to protect African countries from the devastating effects of climate change-related disasters.
The programme extends the institution’s Africa Disaster Risk Insurance Programme by developing insurance solutions to help African nations, particularly their agriculture sectors, prepare for and mitigate the impacts of climate change-induced events such as floods and droughts.
African Development Bank group president Dr Akinwumi Adesina introduced ACRIFA during a side event at the Africa Climate Summit in Nairobi. He emphasised the facility’s goal to raise an initial $1 billion of concessional high-risk capital and grants to facilitate the development and adoption of insurance solutions that will enable countries, businesses, and communities to adapt to climate change.
Adesina stated, “This is our effort to scale up support to insure countries and households against extreme weather patterns. Extreme weather patterns negatively impact the livelihoods of many millions of farmers in Africa, with the majority being women. One way we can tackle this issue is to ensure that farmers have access to crop and livestock insurance.”
The Africa Climate Risk Insurance Facility for Adaptation aims to provide credit insurance to investment portfolios related to climate, agri-food systems, and enterprise development.
It will also collaborate with primary insurers across Africa to ensure that business opportunities extend to continental and international re-insurers.
Additionally, the facility will support national governments in more efficiently managing climate-related disasters.
Comoros president Azali Assoumani, who is also the chair of the African Union, praised ACRIFA as a necessary innovation, considering the increasing frequency and impact of natural disasters on African countries, particularly in the realm of agriculture.
“It will help us to strengthen our adaptation and resilience capacities,” he remarked. Assoumani also highlighted the critical role of ACRIFA in mitigating climate risks and unlocking the touristic potential of countries like Comoros.
Ibrahima Diong, director general of the African Risk Capacity Group and United Nations assistant secretary-general, stated, “[It] will help to build data that feeds early warning systems in Africa,” emphasizing the facility’s role in proactive risk management.
ACRIFA is expected to form partnerships with organisations such as the World Food Programme (WFP). Martin Frick of the WFP expressed enthusiasm for the facility’s potential to expand insurance coverage for farmers and unlock private sector capital. He noted, “We can inject trust in the market and unleash more capital than is currently provided.”
During a panel discussion about ACRIFA’s potential impact, African Development Bank vice president for agriculture, human, and social development Dr Beth Dunford stressed the urgency of taking action. She said, “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.”