African Risk Capacity (ARC) Group, a part of the African Union (AU), announced on Wednesday that its affiliate African Risk Capacity Limited (ARC Ltd.) has received a $27 million contribution from the Dutch government to boost climate resilience in Africa.

The funding will be channelled through the African Development Bank’s Africa Disaster Risk Financing Programme (ADRiFi) Multi-Donor Trust Fund to support the promotion of parametric insurance and other climate risk management instruments in Africa, according to an ARC Ltd press statement.

Unlike traditional insurance, which relies on lengthy claims processes, parametric insurance triggers payouts based on pre-agreed parameters, such as the intensity of a cyclone or excess rainfall. This mechanism allows for rapid disbursement of funds, ensuring that affected communities receive timely assistance to recover and rebuild.

Lesley Ndlovu, CEO of ARC Ltd., expressed gratitude for the Netherlands' generosity, highlighting its role in reducing the protection gap and improving parametric insurance access.

The Netherlands is the sixth contributor to the ADRiFI programme after the UK, Switzerland, the United States, Canada and Norway.

The ADRiFI was established in 2019 as collaborative effort between the AfDB and ARC to increase risk insurance coverage across Africa, and has provided financial protection to over six million individuals across the continent.

AfDB has invested more than $100 million and supported 16 African countries to access sovereign insurance and financial protection against climate hazards.

ARC Ltd. is a mutual insurance facility comprised of its members, which have included Kenya, Mauritania, Niger, Senegal, Mali, Malawi, the Gambia, Burkina Faso, Chad, Zimbabwe, Togo, Madagascar, and Zambia.

(Editing by Anoop Menon) (

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