African
Development
Bank
Group’s
Board
of
Directors
has
approved
$34.8
million,
($34,796,402.40)
in
grants
to
enhance
resilience
and
adaptation
to
climate
disaster
risks
for
vulnerable
communities
in
Malawi
and
Zimbabwe.
Under
the
Bank
Group’s
Africa
Disaster
Risk
Financing
(ADRiFi)
initiative,
the
Mitigating
Fragility
through
the
Africa
Disaster
Risk
Financing
Programme
in
Southern
Africa
Project
will
bolster
institutional
capacity
for
climate
risk
preparedness
and
management.
The
initiative
also
aims
to
increase
financial
protection
against
climate
disaster
risks
through
sovereign
climate
disaster
risk
transfer,
and
promote
the
adoption
of
index-based
crop
insurance
to
mitigate
against
drought
and
other
production
risks
at
the
micro-level.
Malawi
and
Zimbabwe
lack
adequate
mechanisms
for
climate
risk
management
and
adaptation
against
significant
climate
hazards,
such
as
droughts,
tropical
cyclones,
and
flooding.
Strengthening
disaster
risk
management,
improving
early
warning
systems,
and
enhancing
institutional
arrangements
are
crucial
for
effective
preparedness
and
resilience
in
these
countries,
the
Bank
highlights.
Under
the
project,
insurance
payouts
will
provide
timely
and
adequate
financial
protection
to
mitigate
losses
incurred
from
climate-related
disasters,
safeguarding
households,
and
businesses
from
falling
into
poverty
or
bankruptcy.
The
project
hopes
that
climate
risk
insurance
will
lead
to
behavioural
changes
among
beneficiaries,
such
as
increased
investment
in
climate-resilient
livelihoods
or
savings
for
future
insurance
premiums.
Moreover,
it
will
build
on
the
successes
of
the
ADRiFi
program
and
contributions
from
the
firm’s
partners,
which
have
significantly
enhanced
the
financial
resilience
of
both
Malawi
and
Zimbabwe.
Notably,
during
the
El
Niño-induced
drought
season
of
2024-25,
African
Risk
Capacity,
the
Bank’s
partner
on
ADRiFi,
disbursed
over
$45
million
to
support
farmers
affected
by
the
drought,
which
provided
crucial
food
assistance
and
recovery
interventions,
helping
communities
facing
adversity
to
rebuild
and
thrive.
The
project
is
aligned
with
the
Bank’s
“High
5
Priorities”,
especially
Feed
Africa
and
Improve
the
Quality
of
Life
of
Africans.
It
also
aligns
with
the
Bank’s
ten-year
strategy
(2024-2033)
and
will
contribute
to
the
Bank’s
strategy
for
Malawi
which
focuses
on
supporting
economic
diversification
through
investments
in
agriculture
infrastructure
and
value
chains.
–
Reinsurance
News
Post
published
in:
Africa
News