(AfDB) - The African Development Bank has unveiled the Africa Climate Risk Insurance Facility for Adaptation (ACRIFA). The initiative is aimed at insulating countries against catastrophic weather-related events.

The facility, which will be hosted by the Bank, expands its pioneering Africa Disaster Risk Insurance Program into a facility that will develop insurance to help African countries, specifically, their agriculture sectors, prepare for, adapt and build resilience against adverse effects of climate change such as flooding and drought.

African Development Bank Group President Dr. Akinwumi Adesina announced the new adaptation facility on Tuesday 6 September, at a side event held at the Africa Climate Summit in Nairobi. He said it would raise an initial $1 billion of concessionary high-risk capital and grants to catalyze the development and uptake of insurance solutions to help countries, businesses and communities adapt to climate change.

“This is our effort to scale up support to insure countries, households against extreme weather patterns,” Adesina told attendees at the event.

“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,” he added.

The Africa Climate Risk Insurance Facility for Adaptation will also extend credit insurance to investment portfolios related to climate, agri-food system and enterprise development, as well as engage primary insurers across Africa to ensure business opportunities flow through them to continental and international re-insurers. In addition, it will support national governments to more efficiently manage climate disasters.

Comoros President Azali Assoumani, Chair of the African Union, who spoke at the event, described it as a necessary innovation. “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.”

Assoumani added: “Comoros is just 2,000 square kilometers. We cannot unlock our touristic potential when we face severe climate risks, and therefore the importance of this facility to Comoros, which continues to experience adverse realities of climate change.”

“[The Africa Climate Risk Insurance Facility for Adaptation] will help to scale up what [African Risk Capacity Group] is doing. Risk transfer is not just about premiums. It is also about what happens before the disaster strikes. The facility will help to build data that feeds early warning systems in Africa,” said Ibrahima Diong, Director General of the African Risk Capacity Group and United Nations Assistant Secretary-General.

ACRIFA will expand on partnerships to carry out services to clients, such as the World Food Programme.

“We are very excited about ACRIFA’s potential to expand insurance cover to farmers who need it. The Facility will help to unlock private sector capital. We can inject trust in the market and unleash more capital than is currently provided in the market,” said Martin Frick of the World Food Programme.

Following a panel discussion about the facility’s potential, African Development Bank Vice President for Agriculture, Human and Social Development Dr. Beth Dunford, said it needed to move into action quickly.

“What we’re talking about today, isn’t just about policies. The impact of a thriving climate insurance industry in Africa is about lives. It is about an Africa that doesn’t just survive in climate uncertainties but thrives in them,” she added.