The African Development Bank (AfDB) has launched an insurance facility that aims to raise an initial US$1bn in financing to support countries on the continent most at risk of the effects of climate change.  

Directed at helping the agriculture sector become more resilient in the face of flooding and drought, the Africa Climate Risk Insurance Facility for Adaptation (Acrifa) expands the AfDB’s existing disaster risk insurance programme. 

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,” AfDB group president Akinwumi Adesina said at the launch event during last week’s inaugural Africa Climate Summit in Nairobi.  

As well as seeking to raise US$1bn in concessionary high-risk capital and grants, the facility will provide credit insurance to investment portfolios related to climate and agri-food systems.  

It will also “engage primary insurers across Africa to ensure business opportunities flow through them to continental and international re-insurers,” and help national governments “more efficiently manage climate disasters”, the AfDB says. 

“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,” says Azali Assoumani, chair of the African Union and president of Comoros.  

Ibrahima Diong, director-general of the African Risk Capacity Group and United Nations assistant secretary-general, adds that the initiative will help “build data that feeds early warning systems in Africa”. 

Also speaking at the climate summit, AfDB vice-president for agriculture, human and social development, Beth Dunford, 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.” 

Africa is expected to be disproportionately affected by climate change, despite accounting for less than 3% of the world’s energy-related carbon dioxide emissions, according to a 2022 report by the International Energy Agency. 

Securing agricultural insurance has long been an issue across the continent, with take-up low and the risks of livestock death and crop damage increasing significantly as the climate crisis takes hold.  

There were several announcements made at the Africa Climate Summit, billed as a chance for nations to agree positions on climate financing and adaptation.  

Prominent among these was the Nairobi Declaration for Climate Change, which calls for a “global tax regime to finance climate action at scale by crowding in and de-risking private capital”, including a financial transactions tax.