UN urged to back African climate risk insurance aid for investments

Out-Law News | 05 Feb 2018 | 3:47 pm | 1 min. read

The head of the African Development Bank (AfDB) has called on the United Nations to back plans to help African countries pay for insurance against “catastrophic events” that can hamper investments in major infrastructure projects.

Bank president Akinwumi Adesina said the AfDB plans to provide $76 million in 2018 for the payment of insurance premiums, with participating countries providing $31.5m and the African Risk Capacity Agency providing $16m.

Adesina urged UN secretary-general António Guterres to join him in supporting the Green Climate Fund and the Global Environment Facility to “step up support to co-pay for climate risk insurance for vulnerable African countries, noting that African countries, hit by climate change, are hard pressed to find funds to pay the insurance premiums”.

Adesina’s call was made on 28 January in an address to a conference of the UN Economic Commission for Africa in Ethiopia.

Adesina said proposals for the installation of 10,000 megawatts of solar power systems across the Sahel are among investments that could be helped by the insurance aid scheme. The solar projects are in line with the bank’s ‘High 5’ development priorities – aimed at financing access to electricity for 29.3m people across Africa by 2020.

“The AfDB is today at the forefront of investing in renewable energy in Africa,” Adesina said. “The share of renewable energy in the bank’s energy portfolio increased from 14% when I became president in 2015 to 100% last year. Our support last year alone provided 3.8m Africans with access to electricity.”

According to the bank “latest figures indicate that over 20 countries have indicated interest in participating” in the insurance initiative. Meanwhile, the AfDB is “committed to triple its climate financing to 40% of new approvals by 2020, and is deploying programmes and actions to combat fragility and strengthen resilience”.

Adesina told the UN’s climate conference in Paris towards the end of 2015 that the institution would be dedicating 40% of its resources to support the need for “massive financing for climate change mitigation and adaptation efforts” in Africa.

Also in 2015, a World Bank Group report warned the impact of climate change on Africa’s water and energy infrastructure would “be costly” and said immediate action was needed to reduce risks to future planning and investment.

In the report, ‘Enhancing the Climate Resilience of Africa’s Infrastructure’ (192-page / 9.21 MB PDF), the bank said a “climate resilience project preparation facility” should be established to support plans for infrastructure investment, in addition to training programmes for planners and designers.