African Risk Capacity:
Transforming disaster risk
management & financing in Africa
The African Risk Capacity (ARC) is a Specialized Agency of the African Union established to help African governments improve their capacities to better plan, prepare, and respond to extreme weather events and natural disasters.
Through collaboration and innovative finance, ARC enables countries to strengthen their disaster risk management systems and access rapid and predictable financing when disaster strikes to protect the food security and livelihoods of their vulnerable populations.
The African Risk Capacity is comprised of two entities: the African Risk Capacity Agency and the ARC Insurance Company Limited. Together, they provide ARC Member States with capacity building services and access to state-of-the-art early warning technology, contingency planning, and risk pooling and transfer facilities.
African Risk Capacity provides capacity building for and access to a comprehensive disaster risk management & financing system. Working with closely with African governments, we implement efficient and sustainable solutions that address country needs.
Customised Early Warning
Africa RiskView is a state-of-the-art drought risk model & software that helps countries quantify their disaster risk & monitor drought impacts.
African Risk Capacity works with governments and in-country experts to create coordinated contingency plans before catastrophe strikes.
African Risk Capacity disburses financing to fund pre-approved contingency plans to respond rapidly and predictably to disasters.
Risk Pooling & Risk Transfer
Employing innovative financing mechanisms, ARC Insurance Company Limited pools risk across Africa and transfers it to international risk markets.
ARC Member States
African Risk Capacity is run by 33 African Union Member States that signed the ARC Establishment Treaty to create a Specialised Agency dedicated to helping African governments improve their disaster risk management capacities.
Formed by African Union Member States to harness innovative financial mechanisms, the African Risk Capacity employs pan-African solidarity to pool continental knowledge and resources towards addressing the impacts of natural disasters.
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We need better policies and planning to allocate water resources and to distribute the risks arising from water‑related disasters in a more equitable way. One successful example is the African Risk Capacity, which has created a risk pooling facility to meet the needs of communities hit by severe drought.
Amina J. Mohammed
Deputy Secretary-General of the United Nations
What we would like to see is more African governments taking advantage of this institution – of our institution. This is solidarity combined with innovation in practice.
Thomas Kwesi Quartey
Deputy Chairperson of the African Union Commission
Africa contributes no more than 2-3% of greenhouse gas emissions but suffers disproportionately from the negative impacts of climate change. Africa has been shortchanged by the climate financing architecture. Therefore, we need instruments that will help mitigate climate risks
President of the African Development Bank
ARC’s initial product offering and the first parametric insurance product for drought in the world, the drought risk model and insurance product has helped African governments quantify their drought risk and respond early to the impacts of drought events
Responding to pressing climate risks on the continent, African Risk Capacity is developing a risk model and parametric insurance product for river floods. The index-based insurance product will be the first of its kind globally and will respond to the disruptive impacts of river floods to African livelihoods and economies.
Outbreaks & Epidemics
Following the devastating Ebola outbreak in West Africa, African Risk Capacity is developing a parametric model and insurance product to address countries’ financing needs in containing outbreaks of viruses and diseases common to the African continent.
Addressing the climate risks of the South West Indian Ocean states, African Risk Capacity has been developing a product to provide rapid financing and early response to tropical cyclones and the wind, storm surge and wave damage that they cause.
Extreme Climate Facility (XCF)
ARC is developing the Extreme Climate Facility (XCF), a data-driven, multi-year, insurance-like vehicle that will provide financial support to eligible AU countries based on a multi-hazard index. XCF will be a mechanism for African states to access financing to respond to the impacts of increased climate volatility.