Johannesburg: Norway, through its development agency Norad, has committed NOK 50 million (approximately $4.5 million) to Africa Risk Capacity Limited (ARC Ltd.) to bolster Africa’s resilience against climate change. The initiative, known as Supporting Adaptation Capacity Through Increased Parametric Insurance Penetration in Africa (SACPIP-Africa), aims to strengthen African nations’ ability to forecast, assess, and respond to climate-related disasters.

Africa, particularly reliant on rainfed agriculture, is disproportionately vulnerable to the impacts of climate change. Extreme weather events, such as droughts and floods, disrupt food production, damage infrastructure, and hinder economic development. SACPIP-Africa seeks to address this vulnerability by leveraging parametric insurance, a financial tool that provides rapid payouts based on predefined triggers, such as rainfall levels or temperature thresholds.

“By leveraging innovative tools like parametric insurance and developing local expertise, this program will protect livelihoods and ensure sustainable development in the face of climate challenges,” said Lesley Ndlovu, CEO of ARC Ltd.

The initiative will be implemented in ten African countries: Cameroon, Cape Verde, the Democratic Republic of Congo, Ghana, Kenya, Malawi, Mozambique, Rwanda, South Sudan, and Zambia. Through capacity-building programs, ARC Ltd. will empower government officials, civil society organizations, and local communities to better understand and manage climate risks.

“Climate change is having a devastating impact on communities in Africa,” said Anne Beathe Tvinnereim, Norwegian Minister of International Development. “We are excited to be partnering with ARC Ltd. to help protect vulnerable populations and build a more resilient future.”

By expanding insurance coverage and strengthening disaster response mechanisms, SACPIP-Africa aims to enhance Africa’s resilience to climate change and contribute to sustainable development across the continent.