The African Risk Capacity (ARC) is a specialized agency of the African Union that helps African governments prepare for and respond to natural disasters, especially those related to climate, like droughts and floods. It provides parametric insurance, which pays out quickly based on measurable triggers (like rainfall levels), allowing countries to act fast and protect vulnerable populations. ARC also supports risk pooling, contingency planning, and capacity building to strengthen disaster response across the continent.
The African Risk Capacity (ARC) is supported by a wide range of technical, financial, and institutional partners who contribute to its mission of enhancing disaster risk management and climate resilience across Africa.
These organizations provide capital, technical assistance, and policy support:
- UK Foreign, Commonwealth & Development Office (FCDO)
- German Development Bank (KfW) on behalf of BMZ
- Swiss Agency for Development and Cooperation (SDC)
- United States Agency for International Development (USAID)
- Swedish International Development Cooperation Agency (Sida)
- World Bank Group
These partners support ARC’s modeling, capacity building, and operational frameworks:
- World Food Programme (WFP)
- UNICEF
- FAO
- African Development Bank (AfDB)
- Global Center on Adaptation (GCA)
- World Meteorological Organization (WMO)
ARC collaborates with:
- National Meteorological and Hydrological Services
- Ministries of Finance, Agriculture, and Disaster Management
- Civil Society Organizations and Academia
- Regional Economic Communities (RECs)
ARC Ltd works with global reinsurers and brokers to manage risk and expand coverage
The monitoring and reporting procedures of the African Risk Capacity (ARC) are structured to ensure transparency, accountability, and effectiveness in disaster risk financing and response. Here's a summary based on ARC’s official resources
Africa RiskView is ARC’s technical backbone for monitoring weather and climate data.
- It tracks rainfall patterns, drought indices, and food security indicators.
- ARV generates regular bulletins that provide updates on:
- Current climate conditions.
- Estimated response costs.
- Potential impacts on vulnerable populations.
- After each agricultural season, ARC publishes End-of-Season Reports for participating countries.
- These reports assess:
- The accuracy of ARV forecasts.
- The actual impact of climate events.
- The effectiveness of contingency plans.
- For events like cyclones or droughts, ARC issues Post-Event Briefings summarizing:
- Event severity and geographic impact.
- Response actions taken.
- Lessons learned.
- ARC commissions independent evaluations of its payout processes and country-level interventions.
- These evaluations assess:
- Timeliness and adequacy of payouts.
- Efficiency of fund utilization.
- Socioeconomic impact on affected communities.
- ARC publishes “Lessons Learnt” documents to improve future operations.
- These include recommendations for:
- Enhancing contingency planning.
- Strengthening early warning systems.
- Improving coordination with national disaster agencies.
The Organizational and Decision-Making Structure can be found here
The eligibility criteria to access funding from the African Risk Capacity (ARC):
Only African Union (AU) member states are eligible to participate in ARC programs and access funding.
Countries must be in good standing with ARC, which includes:
- Compliance with ARC’s governance and operational standards.
- Fulfillment of financial obligations, such as premium payments.
Countries must adopt and customize Africa RiskView, ARC’s risk modeling software, to monitor climate risks and estimate potential impacts.
A country must submit a detailed contingency plan that outlines how ARC funds will be used to assist affected populations. This ensures:
- Timely and effective response.
- Accountability and transparency in fund usage.
To access ARC Ltd’s sovereign insurance pool or participate in mechanisms like the Extreme Climate Facility (XCF), countries must be premium-paying members.
For programs like REPAIR, countries must:
- Conduct environmental and social due diligence.
- Comply with national and international standards (e.g., World Bank frameworks).
- Follow ARC’s Project Operations Manual (POM) and Exclusion List.
These criteria ensure that ARC funding is used efficiently and reaches vulnerable populations quickly when disasters strike.
Member countries of the African Union (AU). See a list of eligible countries here.
Participate in ARC by following steps in the country engagement proccess. Countries must undertake several processes, including customizing the Africa RiskView software, signing a Memorandum of Understanding 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. To receive a payout, countries develop Final Implementation Plans that elaborate upon the pre-approved Contingency Plans to facilitate targeted interventions that respond quickly and effectively to the populations impacted by disasters.
Find additional information on the country engagement process here.