AfDB to Mobilise $1bn Concessionary Grant to Protect Farmers against Climate Change
Gilbert Ekugbe
The African Development Bank (AfDB) has announced plans to raise an initial $1 billion of concessionary high-rise capital and grants to cushion farmers from the effects of climate change.
The President of AfDB, Dr. Akinwumi Adesina, stated this at the Africa Climate Summit (ACS) in Nairobi.
Adesina said that the fund would catalyse the development and uptake of insurance solutions that would help countries, businesses and communities adapt to climate change.
He said: “This is our effort to scale up support to insure countries, households against extreme weather patterns. 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.”
The bank also unveiled the Africa Climate Risk Insurance Facility for Adaptation (ACRIFA), which is aimed at insulating countries against catastrophic weather-related events.
The facility, which would be hosted by the bank, would expand its pioneering Africa Disaster Risk Insurance Programme (ADRIP) into a facility that would 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.
According to Adesina, the ACRIFA would 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.
“In addition, it will support national governments to more efficiently manage climate disasters,” Adesina added.
According to the President of Comoros, Mr. Azali Assoumani, who is also the chair of the African Union, described it as a necessary innovation.
Assoumani said: “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.
“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.”
Also, the Director General of the African Risk Capacity Group and United Nations Assistant Secretary-General, Mr. Ibrahima Diong, said: “ACRIFA will help to scale up what [African Risk Capacity Group (ARCG) 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.
“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,” said Martin Frick of the World Food Programme.
