The Government of the Republic of Madagascar and the World Food Programme have received a combined insurance payout of $1.5 million to support the country’s recovery from Tropical Cyclone Freddy.
This payout includes $1.2 million to the Government of Madagascar and $300,000 to the World Food Programme through the African Risk Capacity (ARC) Replica initiative.
The strong winds and heavy rains associated with cyclone Freddy, which made landfall on Madagascar’s east coast on February 21st, displaced thousands of people and resulted in the loss of lives and livelihoods initially estimated at $481 million.
In an effort to build resilience against cyclone risk, the Government of Madagascar and the World Food Programme took out two separate tropical cyclone insurance policies during the 2022/2023 cyclone season with ARC Limited, the insurance affiliate of the ARC Group, responsible for risk pooling and transfer.
The country’s participation in the ARC risk pool was made possible by premium support from the Africa Disaster Risk Financing programme, a collaborative initiative between the Bank and the ARC Group, also known as ADRiFi.
ADRiFi is designed to enable qualifying African governments’ participation in ARC risk pools, with contributions from the Governments of the United Kingdom and Switzerland, through the ADRiFi Multi-Donor Trust Fund managed by the Bank, having subsidised the insurance premium payments.
“We are delighted to be making this payout to the Government of the Republic of Madagascar to reach the most vulnerable communities and help the country rebuild,” commented Lesley Ndlovu, Chief Executive Officer of ARC Limited.
“Our work with Madagascar over the years continues to prove the value of sovereign insurance as a valuable tool to strengthen a country’s resilience to weather-induced threats.”
Rindra Hasimbelo Rabarinirinarison, Minister of Economy and Finance for Madagascar also stated: “We are aware that Madagascar is prone to climate disasters, the frequency and intensity of which have continued to increase in recent years. The damage caused is more violent and the related costs are increasing. As such, the Malagasy Government is ready to take the necessary measures to continue its commitment to ensuring the sustainability of this insurance mechanism as an instrument that is adapted to the context of the country’s vulnerability to climate hazards.”
“Madagascar, like many African countries, requires special support to strengthen resilience to climate change, especially as we are not perpetrators of the pollution that causes this scourge,” she added. “We are at war, not amongst ourselves, but against climate change”.
