Giving Compass' Take:

• ARC is an insurance risk pool aimed to help African countries quickly recover from natural disasters, expected to increase as climate change intensifies. 

• Is this public-private partnership a good idea for African countries? Are there unintended consequences of this structure? 

• Find out what happened at African Development Bank’s 53rd Annual Meetings.

Several African countries are determined to help build a culture of insurance on the continent as a tool for disaster resilience. Already, it’s possible for governments to take out an insurance policy with African Risk Capacity and to approach the African Development Bank for premium financing support.

Down the road, African nations could see insurance premium relief in the form of private sector co-financing as well, based on an unexpected interaction between a renewable energy company and government leaders at the AfDB meetings this week in Busan, South Korea.

Africa contributes no more than 2-3 percent of greenhouse gas emissions, but suffers disproportionately from the negative impacts of climate change, AfDB President Akinwumi Adesina reminded attendees of the bank’s 53rd Annual Meeting on Wednesday.

Africa has been shortchanged by the climate financing architecture. Therefore, we need instruments that will help mitigate climate risks.

One of those instruments is ARC, an insurance risk pool that aims to meet the needs of affected populations faster, with triggered payouts reaching national treasuries in 2-4 weeks. More broadly, it looks to help create a sustainable African-led strategy for managing extreme climate risks, Mohamed Beavogui, ARC director-general, explained to Devex.

Read the full article about private sector disaster risk funding by Kelli Rogers at Devex International Development.