The African Risk Capacity (ARC) has added a crucial partner to its portfolio by formally teaming up with the African Development Bank (AfDB) to strengthen mechanisms to manage weather-related risk on the continent. This partnership will formalize a technical collaboration to enhance risk management infrastructure and policy across Africa; it will also support African countries in building resilience against climate shocks and in taking ownership of their disaster response. In concrete terms, AfDB and ARC Agency will work together to develop their Member states’ capacity in understanding the value of risk transfer tools.
The partnership is intended to result in ARC Member countries integrating risk management into their policy and development objectives, with a particular focus on recurrent disasters such as drought, floods and tropical cyclones as well as on improved resilience and speedier recovery after disasters. ARC and AfDB signed the Memorandum of Understanding (MOU) on the margins of ARC’s Fifth Conference of Parties (CoP5) in Abidjan, Côte d’Ivoire on 7th March 2017. Background The signing of the MOU is subsequent to the Letter of Intent (LOI), which was signed between the two institutions in May 2016 during the AfDB’s Annual Meetings in Lusaka.
The MOU formalizes a technical partnership to collaborate on the enhancement of the risk management infrastructure and policy regime across Africa. The aim of this partnership will be for the institutions to collaborate: in the development of capacity and services; providing capacity building to individual countries; to embed risk management in planning and to deepen the understanding of the value of risk transfer tools. This collaboration is in line with the support that the Bank should provide to Regional Member Countries (RMCs) pursuant to its Charter as well as its role in assisting RMCs to adapt to the growing hazards from climate change.
Signing the MOU on the behalf of the African Development Bank, the Senior Vice-President, Dr. Frannie Leautier, stated: “In the context of this MOU, ARC and AFDB will partner to support Member States in key areas, which will lay the foundations for a robust approach at the national-level around disaster risk financing.” Mr. Mohamed Béavogui, United Nations Assistant Secretary-General and the Director-General of ARC, views the MOU with AfDB a key milestone, stating: “this partnership with AfDB will complement ARC as we will jointly train and prepare countries to better manage weather-related risk and mainstream insurance into their disaster management plans.”
About African Risk Capacity (ARC)
The African Risk Capacity Agency (ARC Agency) was established in 2012 as a Specialised Agency of the African Union (AU) by a Conference of Plenipotentiaries – consisting of 32 African nations – to help African Union Member States improve their capacities to better plan, prepare and respond to weatherrelated disasters. The objective of the ARC Agency is to assists AU Member States to reduce the risk of loss and damage caused by extreme weather events affecting Africa’s populations by providing, through sovereign disaster risk insurance, targeted responses to natural disasters in a more timely, cost-effective, objective and transparent manner. The African Risk Capacity Insurance Company Limited (ARC Ltd) is a financial affiliate of the African Risk Capacity (ARC), a specialized agency of the African Union (AU), an initiative designed to improve current responses to climate-related food security emergencies. ARC Ltd is a mutual insurance facility comprised of its members, which included in 2016: Burkina Faso, Mali, Mauritania, Niger, Senegal, the Gambia. – The membership also includes its capital contributors. KfW on its own behalf, and for the account of the Federal Republic of Germany acting through its Federal Ministry for Economic Cooperation and Development (Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung, BMZ) and the United Kingdom (Department for International Development, DfID) have contributed the first tranches of their respective EUR 50 million and GBP 90 million commitments.
