African Development Bank Launches $1 Billion Climate Insurance Facility for Farmers

Photo: AfDB

Dubai, COP28 Side Event - The African Development Bank Group unveiled plans for a groundbreaking $1 billion facility, the Africa Climate Risk Insurance Facility for Adaptation (ACRIFA), aimed at providing insurance coverage to over 40 million farmers across the continent, protecting them from the severe impacts of climate change.

The initiative received widespread praise from the World Food Programme (WFP), development agencies, insurance companies, and the private sector during a side event at COP28 in Dubai. ACRIFA is set to mobilize $1 billion in concessionary financing, high-risk capital, and grants to bolster the African insurance industry.

AfDB President Adesina emphasized the facility's role in safeguarding farmers and countries against catastrophic weather-related events. ACRIFA also aims to stimulate private sector investment in agriculture by mitigating risks associated with climate change.

Adesina stressed the need to support farmers facing the increasing frequency and intensity of extreme weather events. He highlighted that over 97 percent of farmers in Africa lack agricultural insurance, relying on prayers for successful planting, harvesting, and marketing. ACRIFA, he said, could be the answer to their prayers.

The facility, unveiled at the Africa Climate Summit in Nairobi, aims to systematically support the African insurance industry. It seeks to unlock financing for investments in climate-smart and green technologies while strengthening local insurers and fostering collaboration with national and international reinsurers.

ACRIFA's successful implementation hinges on partnerships, with the World Food Programme playing a crucial role in delivering services to clients. Cindy McCain, Executive Director of WFP, expressed excitement about the growing partnership with the African Development Bank, emphasizing the importance of protecting smallholder farmers and businesses from climate shocks.

United Nations Assistant Secretary-General Ibrahima Diong and Special Advisor to the UN Climate Change High-Level Champion Bogolo Kenewendo highlighted ACRIFA's potential to boost investment and resilience in Africa's agri-food systems. Michelle Kigari from the One Acre Fund emphasized the critical role of insurance in building meaningful resilience for Africa's farmers.

Hassan Bashir, Founder of Takaful Insurance Group of Africa and ACRIFA Senior Advisor, urged insurance companies to consider covering large-scale groups of farmers. He emphasized that agriculture, the backbone of Africa's food and employment, should not be defined as risky, as life depends on it.