The African Development Bank (AfDB) has presented its planned $1 billion facility to provide insurance to more than 40 million farmers across the continent, against what it calls “severe impacts of climate change.”
The facility was widely praised by the World Food Programme (WFP), development agencies, insurance companies and the private sector during a side event at COP28 in Dubai.
AfDB President Akinwumi Adesina said the Africa Climate Risk Insurance Facility for Adaptation (ACRIFA) aims to mobilise $1 billion of concessionary financing, high-risk capital and grants to support the African insurance industry.
The facility is designed to protect farmers and countries against catastrophic weather-related events and to stimulate private sector investment in agriculture by mitigating risks.
“We have to support farmers, not abandon them, in the face of rising frequency and intensity of extreme weather events like drought, floods and pest infestation… We need to ensure that farmers and actors along the agricultural value chain are covered by insurance at scale,” the Bank’s President appealed.
He noted that over 97% of farmers in Africa do not have agricultural insurance.
“Their only insurance is to pray… when they plant that it will rain. Pray when they harvest that there will not be rains or pest devastation and pray when they market their crops that prices will not collapse.”
“The eyes of more than 40 million smallholder farmers in Africa are on us. Let us make ACRIFA the answer to their prayers,” he added.
Adesina said ACRIFA will systematically support the African insurance industry to unlock financing for investments in climate-smart and green technologies.
“It will strengthen local insurers and foster integration with national and international reinsurers,” he pointed out.
Unveiled at the Africa Climate Summit held in Nairobi in September, ACRIFA brings together governments, development agencies, the insurance sector, as well as the private sector.
The successful roll out of the facility will depend largely on partnerships with agencies such as the World Food Programme to deliver services to clients, according to AfDB.