MICROCAPITAL BRIEF: AfDB Seeking $1b for African Climate Risk Insurance Facility (ACRIFA) to Boost Microinsurance for Farms, Livestock Against Drought, Floods

The multilateral African Development Bank (AfDB) recently launched a fund called the African Climate Risk Insurance Facility (ACRIFA), aimed at increasing the continent’s resilience to adverse weather events. ACRIFA follows on AfDB’s Africa Disaster Risk Insurance Program, which supported the creation and uptake of insurance products and the development of networks to prepare for the adverse effects of climate change, particularly with respect to agriculture. Among the goals of ACRIFA is to expand “the range of risks and clients served” relative to its predecessor.

AfDB seeks to raise USD 1 billion for ACRIFA to deploy as “concessionary, high-risk capital and grants” to: (1) provide incentives for the private sector to invest in climate insurance; (2) support government entities in facilitating the development of climate insurance; (3) provide technical assistance to local insurance providers; (4) “extend credit insurance to investment portfolios related to climate, agri-food system and enterprise development;” (5) develop systems for measuring impact; and (6) “build data that feeds early warning systems in Africa.”

AfDB is a member of the AfDB Group, which is owned and funded by 82 member governments. Founded in 1964, AfDB provides loans and grants to governments and private companies in Africa with the intent of promoting “sustainable growth.” In addition to AfDB, the group consists of the African Development Fund and the Nigerian Trust Fund. AfDB Group reports XUA 21 billion (USD 27 billion) in net loans outstanding, XUA 1.4 billion (USD 1.8 billion) in equity participations and total assets of XUA 38 billion (USD 49 billion) as of December 2022.

By James Stevenson, Research Associate

Sources and Additional Resources

AfDB press release
https://www.afdb.org/en/news-and-events/press-releases/lbnk-lfryqy-lltnmy-ykshf-n-mbdr-jdyd-lhmy-lmzryn-mn-athr-tgyr-lmnkh-64152

ACRIFA brochure
https://www.afdb.org/en/documents/africa-climate-risk-insurance-facility-adaptation-acrifa

AfDB Financial Report (2022)
https://www.afdb.org/en/documents/financial-report-2022

AfDB Annual Report (2022)
https://www.afdb.org/en/documents/annual-report-2022

Previous MicroCapital brief on AfDB
https://www.microcapital.org/microcapital-brief-afdb-ingenosya-create-mada-business-linkage-online-portal-to-boost-sme-success-in-madagascar/

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