***African Risk Capacity (ARC)***

Project completed

The African Risk Capacity is a specialised agency of the African Union to help African countries improve their capacities to better respond to extreme weather events such as droughts and floods, therefore protecting the food security of their populations. It uses modern finance mechanisms such as risk pooling to create pan-African climate response systems. SDC co-finances the expansion of this insurance scheme to new countries, including the development of contingency plans that will allow insurance pay-outs to countries in case of drought or floods related catastrophes.

Country/region Topic Period Budget
Africa
Agriculture & food security
Humanitarian Assistance & DRR
Employment & economic development
Agricultural financial services
Material relief assistance
Agricultural services & market
Financial policy
Agriculture value-chain development (til 2016)
01.12.2016 - 31.08.2021
CHF  4’026’316
Background

Droughts, floods and cyclones are the most frequent natural disasters that impact on the food security of vulnerable communities in Africa. In case such disasters call for humanitarian aid, relief often only arrives 6 to 9 months later. An insurance scheme for governments based on satellite images allows immediate pay-out and allows for relief to the affected and well targeted communities before they start selling or using their productive assets such as animals, seeds, etc.

Objectives

African Risk Capacity (ARC)’s goal is to ensure that African Union (AU) Member States are better equipped to manage the impacts of natural disasters on vulnerable population in a timely manner.

By 2020, ARC aims to directly insure 150 million people in Africa with USD 1.5 billion in coverage across 30 countries and to channel a further USD 500 million in climate adaptation finance.

Target groups

The immediate beneficiaries are the AU Member States as they will receive technical assistance in financial disaster preparedness and weather risk management.

The final beneficiaries are the most vulnerable, food-insecure populations of these countries, who are expected to receive more timely and effective assistance in the event of weather disaster.

Medium-term outcomes

Improved access to innovative tools and insurance products for AU Member States to effectively manage their natural disaster risk.

Enhanced AU Member State ability to anticipate, plan for and respond to natural disasters in an efficient and effective manner.

Increased scale and sustainability in ARC operation and insurance coverage

Results

Expected results:  

ARC plans to engage with Governments for capacity-building activities in the next four years with the aim of adding 4 to 5 new countries per year.

Over the next five years, ARC will define its pathway to become self-sustaining.


Results from previous phases:  

Africa Risk View (ARV) platform improved for better performance and to include new hazards and products.

ARV platform is continually disseminated through the provision of training and technical support to member states.

Robust contingency plans developed in collaboration with member states through the provision of training and technical support.

2014 first insurance pool launched with 5 countries, with Niger, Senegal and Mauritania receiving first pay-outs in early 2015 for experienced drought, reaching the people in need.

ARC Ltd insurance risk pool continues to grow.


Directorate/federal office responsible SDC
Credit area Development cooperation
Project partners Contract partner
United Nations Organization (UNO)
  • World Food Programme


Coordination with other projects and actors

Global Programme Food Security funded “Remote sensing-based information and insurance for crops in emerging economies” (RIICE) in Asia.

Various micro-insurance projects of SDC in ARC countries (Malawi, Zambia, Tanzania), SDC being one of the leading agencies in agriculture and catastrophe insurance schemes.

Budget Current phase Swiss budget CHF    4’026’316 Swiss disbursement to date CHF    4’026’316 Total project since first phase Swiss budget CHF   4’500’000 Budget inclusive project partner CHF   6’500’000
Project phases Phase 3 10.12.2019 - 31.12.2022   (Current phase)

Phase 2 01.12.2016 - 31.08.2021   (Completed)

Phase 1 01.12.2012 - 31.10.2016   (Completed)