The African Development Bank (AfDB) has announced the launch of its first climate risk management initiative, called the Africa Disaster Risks Financing (ADRiFi) Programme.
The comprehensive programme, which will initially run from 2019 to 2023, includes the provision of disaster risk insurance cover for poor communities in regional member countries, and is designed to reduce vulnerability to climate change and act as a safeguard against loss of livelihoods.
ADRiFi will promote disaster response mechanisms such as sovereign parametric index-based insurance, which will ensure that pay-outs are dispersed automatically and in a timely manner when a pre-defined risk threshold is exceeded.
The programme will also facilitate initial financing for countries in need of support and help them to evaluate climate-related risks and costs, respond to disasters, and review adaptation measures.
The AfDB has estimated that every US $1 spent on ex-ante intervention through ADRiFi will save $4.40 in ex-post disaster relief measures for a response carried out six months after the event.
Nine countries have already expressed interest in participating in the programme, including Burkina Faso, Chad, Gambia, Madagascar, Malawi, Mali, Mauritania, Niger and Senegal.
“Africa is the most vulnerable continent to climate change, prone to a wide variety of natural disasters including droughts, floods and tropical cyclones. However, disaster risk management suffers from inadequate financing and challenges in the deployment of available funds”, said Atsuko Toda, Bank Director for Agricultural Finance and Rural Development.
“This programme is a significant step to help reduce exposure and vulnerability of African countries, and will create a system to absorb, adapt and aid recovery of these countries from climate shocks,” Toda added.
The AfDB has signed a Memorandum of Understanding with The African Risk Capacity (ARC) to ensure cooperation in preparing, developing and implementing climate change resilience projects, as well as assisting member countries with policies on drought risk pools and other disaster risk measures.