Global Courant 2023-05-03 00:03:20
Representatives from the African Risk Capacity (ARC) Group and the African Development Bank (www.AfDB.org) presented two checks worth $1.5 million in insurance payments to the Government of Madagascar and the World Food Program (WFP) to support the country’s recovery from Tropical Cyclone (TC) Freddy.
The funds, consisting of $1.2 million to the government of Madagascar and $300,000 to the World Food Program, were paid under the ARC Replica initiative, an innovative risk finance solution that is being extended to humanitarian organizations.
Wind and rain associated with TC Freddy, which struck the east coast of Madagascar on February 21, 2023, resulted in a loss of life and livelihood estimated at $481 million.
Rindra Hasimbelo Rabarinirinarison, Madagascar’s Minister of Economy and Finance, said:
“We are aware that Madagascar is susceptible to climate disasters, the frequency and intensity of which have continued to increase in recent years. The damage caused is more violent and the associated costs increase. As such, the Malagasy government is ready to take the necessary steps to continue its commitment to ensuring the sustainability of this insurance mechanism as a tool adapted to the context of the country’s vulnerability to climate hazards.”
As part of building resilience to future tropical cyclones, the government and the World Food Program have issued two separate insurance policies during the 2022/2023 cyclone season with ARC Limited, the insurance company of the ARC Group, a global financial and advisory firm.
The country’s participation in the ARC risk pool was facilitated by the Africa Disaster Risk Financing Program (ADRiFi), which paid its insurance premium. Through ADRiFI, a partnership between the African Development Bank and ARC Group, a number of eligible African governments can participate in ARC risk pools. Contributions from the UK and Swiss governments, through the ADRiFi Multi-Donor Trust Fund administered by the bank, have subsidized the payment of the insurance premium on behalf of Madagascar.
“We are pleased to be able to make this disbursement to the Government of the Republic of Madagascar to reach the most vulnerable communities and help the country rebuild,” said Lesley Ndlovu, CEO of ARC Limited. “Our work with Madagascar over the years continues to prove the value of sovereign insurance as a valuable tool for strengthening a country’s resilience to weather-induced threats,” he added.
The insurance payoff comes as Madagascar rebuilds from several costly climate-induced disasters. These have eroded some of the country’s development gains.
As of March 10, 2023, Madagascar’s National Bureau of Risk and Disaster Management reported ten deaths associated with TC Freddy. More than 120,000 people were affected, at least 45,000 displaced and more than 10,300 homes and schools destroyed.
“The bank has supported the government through the ADRiFi program to pay insurance premiums of $3.5 million. These subscriptions generated a total payout of $15 million from the ARC Group in the form of disbursements,” said Adam Amoumoun, African Development Bank Country Manager for Madagascar.
“It is gratifying to know that the amount mobilized is more than four times greater than the premiums paid, and even better, it has benefited 385,589 vulnerable households,” added Amoumoun.
The funds will help cyclone-affected communities avoid resorting to consuming agricultural seeds for food, selling farm implements or migrating in search of work and food.
Pasqualina Di Sirio, WFP’s representative in Madagascar, said: “More frequent and intense climate shocks exacerbate people’s vulnerability, especially in the southern and eastern regions of Madagascar. While WFP is providing timely assistance to affected people, we are also eager to use our experience and expertise to shape long-term solutions in Madagascar to strengthen people’s resilience.”
“WFP is supporting insurance schemes and grants to affected people to help people better cope with the climate crisis,” she told attendees at the ceremony.
Madagascar was the first country to enroll in the ARC Tropical Cyclone insurance program since its launch in November 2020. During an active cyclone, ARC provides daily, real-time monitoring information on the strength of the storm and potential impact zones to help participating countries evacuate people in the way of evil. This warning system helped Madagascar evacuate 7,000 people before TC Freddy made landfall.
In 2022, ARC Group made a $10.7 million payout to Madagascar following Tropical Cyclone Batsirai, another deadly cyclone that hit the country in February of that year.
Distributed by APO Group on behalf of the African Development Bank Group (AfDB).
Media contacts:
African Development Bank:
Alphonso Van Marsh,
Chief Digital Content and Events Officer
(email protected)
African Risk Capacity Group:
Eva Kavuma,
Chief Operations Officer
(email protected)
Madagascar:
Mamifaniry Razafindramiandra,
Head of the Department of Communication, Prevention and Management of Emergency Situations (CPGU) / Prime Minister’s Office
(email protected)
World Food Programme:
Aina Andrianalizaha,
Communication officer
(email protected)
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