The Board of Directors of the African Development Bank Group has approved a grant of $8.56 million from the African Development Fund to implement the Africa Disaster Risk Financing Programme (ADRiFi) in Sudan. The project will enhance the nation’s resilience and response to climate shocks by improving the management of climate disaster risks. The five-year (2022 to 2026) project, to be implemented at a total cost of $13.02 million, includes contributions from the Government of Sudan as well as in-kind contribution from the African Risk Capacity.
Through ADRiFi, Sudan will strengthen its capacity to evaluate climate-related risks and costs and elaborate subsequent adaptation measures to strengthen resilience and allow a timely response delivery to beneficiaries impacted by drought and floods. The African Risk Capacity (ARC) is a Specialized Agency of the African Union established to help African governments improve their capacities to better plan, prepare, and respond to extreme weather events and natural disasters.
The project includes a comprehensive capacity building component, designed to assist Sudan to quantify and manage the country’s climate risk, enhance efficiency and to make informed decisions regarding transferring risk to the market through insurance, as part of a holistic national risk management strategy. To support Sudan’s participation in the programme, the first-year insurance premium for the 2021/2022 agriculture season will be financed through the resources from the newly established Multi-Donor Trust Fund and the German government.
“We are delighted to have ADRiFi Sudan approved by our Board. This adds to the momentum and focus on Sudan since the clearance of their arrears with the Bank in the last few months,” said Atsuko Toda, Director of the Agriculture Finance and Rural Infrastructure Development Department at the Bank, following the Board approval on 5 July 2021.
In May 2021, the Government of Sudan signed two drought insurance policies with the African Risk Capacity for the 2021/22 agricultural season: a crop insurance policy with coverage of $4.2 million and a rangeland insurance policy for $3 million. Sudan’s participation in the ARC Drought Risk Pool aligns with the country’s “National Triple Programme for Stability and Economic Development (2021-2023)”, which aims to address vulnerabilities to drought and flood risks. In addition, the ARC sovereign drought insurance coverage will go a long way to strengthen Sudan’s social protection and disaster risk financing mechanisms.
“The launch of ADRiFi programme in Sudan is another testimony of the strong collaboration between the African Development Bank and ARC and resonates to the value we place on smart partnerships in dealing with disaster risks on the continent. We salute the leadership of Government of Sudan for their holistic development reform agenda; and reaffirm our commitment to a successful implementation of the programme.” said Assistant Secretary General Ibrahima Diong, Director-General, ARC Group.
The proposed financing comes immediately after the recent approval to clear $413 million in arrears on loans owed by the Republic of Sudan to the African Development Bank. The clearance of Sudan’s arrears was made possible with the contribution of the government of the United Kingdom through a bridge financing of GBP 148 million through the African Development Fund.
The ADRiFi Multi Donor Trust Fund was established within the African Development Bank with contributions from the United Kingdom and Switzerland. The fund will make resources available to support the premium payments by African countries in order to increase the number of participants in the risk pool and make the African Risk Capacity an effective pan African initiative.
Funds from the Fund are supplemented by the Covid-19 ARC Premium Subsidy Programme from the German Federal Ministry for Economic Cooperation and Development (BMZ), enabling more African countries to manage their risk exposure to disasters.