The African Risk Capacity Ltd. (ARC) has received a substantial boost in its efforts to enhance climate resilience across Africa, thanks to a $27 million contribution from the Dutch government. This funding is aimed at promoting parametric insurance solutions throughout the continent and will be channeled through the African Development Bank’s Africa Disaster Risk Financing Programme (ADRiFi) Multi-Donor Trust Fund.
With this contribution, the Netherlands becomes the sixth donor to support the Fund, underscoring its commitment to bolstering Africa’s capacity to mitigate and manage climate-related risks. Parametric insurance, a pivotal tool in combating climate change, triggers payouts based on predefined criteria like the severity of a cyclone or excessive rainfall. This mechanism ensures swift disbursement of funds, enabling affected communities to receive timely assistance for recovery and reconstruction efforts.
The ADRiFi programme, launched in 2019 through a collaboration between the African Development Bank and ARC, aims to expand insurance coverage against climate risks across Africa. Since its inception, the partnership has made significant strides, providing financial protection to over six million individuals across the continent. Supported by international donors including the United Kingdom, Switzerland, the United States, Canada, Norway, and now the Netherlands, the programme has received widespread acclaim for its efforts to bridge the protection gap and strengthen Africa’s resilience to climate shocks.
Lesley Ndlovu, CEO of ARC Ltd., expressed gratitude for the Netherlands’ contribution, emphasizing its role in making parametric insurance more accessible and affordable through premium support within the ADRiFi programme. The African Development Bank has committed over $100 million and facilitated access to sovereign insurance for 16 African countries, further solidifying its commitment to safeguarding the region against climate hazards.
This latest funding injection underscores a collective effort to build sustainable solutions and safeguard vulnerable populations in Africa against the escalating impacts of climate change.
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