Norway Provides NOK 50 Million To Strengthen Africa’s Climate Resilience Through ARC Ltd.’s SACPIP-Africa Initiative
Africa’s economic and social structures are disproportionately affected by climate change. More than 95% of Africa’s food production depends on rainfed agriculture, and more than 70% of the continent’s population relies on rainfed agriculture for their livelihoods, making them highly vulnerable to erratic weather patterns. Disasters such as droughts and floods exacerbate food insecurity, damage infrastructure, and erode decades of development progress. The current humanitarian aid system is unresponsive, slow and inadequate, and many African countries lack the financial and technical resources to effectively respond to such disasters, resulting in delays that countries face, exacerbating human suffering and economic losses.
To help address this gap, Norway, through the Norwegian Agency for Development Cooperation (Norad), has provided NOK 50 million (approximately USD 4.5 million) to African Risk Capabilities Ltd. (ARC Ltd.) to implement by increasing parametric insurance penetration Supporting Resilient Africa (SACPIP-Africa) Initiative. The partnership officially entered into force at a signing ceremony held at the CARICOM Pavilion at the COP29 Conference of the Parties on November 13, 2024, marking the significant contribution that this initiative will make to solving the problem of climate change.
By aligning with global frameworks such as the Sustainable Development Goals (SDGs), particularly SDG 13 (Climate Action), the initiative aims to create synergies with existing environmental policies and resilience strategies.
What is SACPIP-Africa?
SACPIP-Africa is part of ARC Ltd.’s mission to expand disaster risk preparedness by strengthening governments’ capabilities to predict, assess and plan for crises. It aims to provide African countries with the tools, knowledge and financial support they need to combat the growing impacts of climate change.
The program uses parametric insurance to address Africa’s unique vulnerability to climate-related disasters. Unlike traditional insurance, parametric insurance provides pre-agreed payouts based on objective triggers (such as rainfall) rather than assessed losses. This ensures that funds are disbursed quickly (usually within 10 days), allowing countries to respond to emergencies quickly and effectively.
“The SACPIP-Africa initiative reflects a strong commitment to building a resilient and self-reliant Africa. By leveraging innovative tools such as parametric insurance and developing local expertise, the program will protect livelihoods and ensure sustainable development in the face of climate challenges .” said Lesley Ndlovu, CEO of ARC Ltd.
ARC Ltd. implements SACPIP-Africa with the highest standards of transparency and accountability. The plan includes strong monitoring, evaluation and learning mechanisms, as well as regular reporting to stakeholders. Semi-annual performance reviews and annual evaluations will measure progress against key metrics to ensure donors’ contributions have maximum impact.
Building economic resilience at scale
SACPIP-Africa will be implemented over the next four years in Cameroon, Cape Verde, Democratic Republic of Congo, Ghana, Kenya, Malawi, Mozambique, Rwanda, South Sudan and Zambia.
SACPIP-Africa ensures that disaster risk management knowledge is embedded at the grassroots level through capacity-building workshops that train government officials, civil society organizations and local leaders. These efforts will focus on establishing institutional frameworks, identifying risk profiles and developing contingency plans to ensure effective response mechanisms, which will result in an additional US$134 million in coverage over the next 3 years and reach an additional 13.4 million vulnerable African people.
Gender inclusion is an important aspect of this emergency and operational planning, and the ARC Group works with partner countries to strengthen women’s participation in disaster risk management. “We do this by actively using our influence to encourage more women to join the workforce,” Ndlovu said. ARC also provides training on gender inclusivity and sensitivity to relevant government departments and national focal points.
“Climate change is having a devastating impact on African communities, as we have witnessed firsthand this year with droughts affecting several countries in sub-Saharan Africa,” commented Anne Bethe Tvinnereim, Norway’s Minister for International Development. “We are delighted to be working with ARC Ltd. Their work is enabling more African countries and smallholder farmers to gain access to insurance against risks associated with drought, floods or tropical cyclones.”
“The project will also help countries assess the severity of risks and ensure the livelihoods of the most vulnerable in communities, including women and children, are protected,” she said.
SACPIP-Africa emphasizes scalability, building on ARC Ltd.’s ambitious vision to insure more than 150 million vulnerable Africans annually by 2025, expanding its current coverage of 17 insured countries to the majority of Africa Alliance member states. This is expected to have an economic multiplier effect, safeguard agricultural productivity, stabilize local markets, and reduce post-disaster recovery costs.
