Abidjan, Sept 21, (AIP) - The World Food
Program (WFP) has signed with African Risk Capacity (ARC), a specialized agency
of the African Union, its first climate risk insurance policy.
This insurance policy, known as “ARC Replica”, is designed to allow humanitarian organizations to purchase "complementary" macro insurance policies against climate risks.
Payments are triggered when certain indices, such as low rainfall or reduced vegetation, are confirmed by satellite data.
This innovation, it is said, protects vulnerable households from the onset of a climate shock, thus helping to break the cycle of endemic poverty.
It provides reliable and predictable funding for a rapid humanitarian response to extreme climate shocks.
The first countries to benefit from WFP's climate insurance coverage, financed by the German government, will be Mauritania, followed shortly thereafter by Mali, both of which are subject to recurring droughts.
Of the total amount, according to a United Nations publication, WFP will receive €5.8 million for the purchase of “ARC Replica” insurance policies for Mali and Mauritania, allowing rapid humanitarian intervention through payments if necessary.
“ARC Replica” Insurance offers a new type of coverage offered by ARC, an African Union risk body that has been providing insurance against extreme weather since 2014.
The German Federal Ministry for Economic Cooperation and Development has pledged €10 million to WFP and Start Network until 2019.