Africa Risk Capacity

The African Union

To assist AU Member States to reduce the risk of loss and damage caused by extreme weather events and natural disasters affecting Africa's populations by providing targeted responses to disasters in a more timely, cost-effective, objective and transparent manner.

Open to Applications : 
Application Time Frame : 

Not specified

Climate Objective : 
Administrator Type : 
Intergovernmental Organization
Financial Instruments Offered : 
Direct Access : 
Fund Size : 

30 million per country per season for drought events that occur with a frequency of 1 in 5 years or less.

Financing Award : 
Not Applicable
Trustee : 
Not applicable
Implementing Entity : 

ARC is composed of two entities: the Specialized Agency and a financial affiliate, ARC Insurance Company Limited (the Company). The Agency is a cooperative mechanism providing general oversight and supervising development of ARC capacity and services; providing capacity building to individual countries; approving contingency plans and monitoring their implementation. The Company is the financial affiliate that carries out commercial insurance functions of risk pooling and risk transfer in accordance with national regulations for parametric weather insurance in Bermuda (where it is located until such time that an equally favourable legal and regulatory regime exists in an AU Member State.

Steps to Access & Application Procedure

In order to participate in ARC, countries must undertake several processes, including customizing the Africa RiskView software, signing MOUs for in-country capacity building, defining a contingency plan for ARC payouts, and determining risk transfer parameters. When countries have satisfactorily completed this process, they will receive a Certificate of Good Standing from the ARC Agency Governing Board, and will pay a premium to ARC Ltd, after which they will be members of the risk pool.

Organizational and Decision Making Structure

The ARC Agency Governing Board was elected by the Conference of the Parties in Dakar, Senegal on 27 February 2013. The Board is composed of eight members of varying expertise from development economics and risk finance to climate change and food security. Five members and their alternates are elected for staggered terms from Parties that have expressed intent to take out insurance and taking into account geographical representation. One member is appointed by the African Union Commission (AUC) for expertise in finance or insurance matters. An additional member is appointed by the AUC in consultation with the UN World Food Programme for expertise in disaster management, climate change or food security. The Director General serves as an ex officio member. All members of the ARC Agency Governing Board and their alternates serve in their personal capacities on a part-time basis as required to carry out their functions.

Monitoring and Reporting Procedures

Not specified

Co-financing Requirements (if applicable)

Not applicable

Other Eligibility Criteria Beyond Geography and Income

African Union Member States.
Countries wishing to take out contracts for insurance with the African Risk Capacity Insurance Company Limited must hold a Certificate of Good Standing (CGS) with the ARC Agency.

Contact Information

Johannesburg Office
Merafe House
11 Naivasha Road
Sunninghill 2157
Johannesburg, South Africa
T: +27 (0)11 517 1535

Rome Office
Via C.G.Viola 68
Parco dei Medici
00148 Rome, Italy
T: +39 06 6513 2120

Last Updated :