The Board of Directors of the African Development Bank Group has approved grants of nearly $34 million to enhance resilience and adaptation to climate disaster risks for vulnerable communities in Malawi and Zimbabwe.
Under the Bank's Africa Disaster Risk Financing (ADRiFi) initiative, the "Mitigating Fragility through the Africa Disaster Risk Financing Programme in Southern Africa" project aims to enhance institutional capacity for climate risk preparedness and management. It will also expand financial protection against climate disaster risks via sovereign climate disaster risk transfer and encourage the adoption of index-based crop insurance to mitigate drought and other production risks at the local level.
Malawi and Zimbabwe face significant climate hazards, such as droughts, tropical cyclones, and flooding, but lack adequate mechanisms for climate risk management and adaptation. Both countries are particularly to these climate challenges, which contribute to their fragility. Strengthening disaster risk management, improving early warning systems, and enhancing institutional arrangements are crucial for effective preparedness and resilience in these countries.
The insurance payouts will offer timely and sufficient financial protection to help mitigate losses caused by climate-related disasters, ensuring that households and businesses are safeguarded from falling into poverty or bankruptcy. Climate risk insurance is expected to drive behavioral changes among beneficiaries, such as increased investment in climate-resilient livelihoods or saving for future insurance premiums. The project builds on the successes of the ADRiFi program and the valuable contributions from partners, which have significantly enhanced the financial resilience of both Malawi and Zimbabwe. Notably, during the El Niño-induced drought of 2024/2025, African Risk Capacity, the Bank’s partner in the ADRiFi initiative, disbursed over $45 million to support drought-affected farmers. This funding has provided crucial food assistance and recovery interventions, helping communities rebuild and thrive in the face of adversity.
The project is aligned to the Bank’s High 5 Priorities, especially ‘Feed Africa’ and ‘Improve the Quality of Life of Africans’. It also aligns with the Bank’s 10-year strategy (2024-2033) and will contribute to the Bank’s Country Strategy for Malawi which focuses on supporting economic diversification through investments in agriculture infrastructure and value chains.
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