Somalia Partners with AfDB in Bold $35 Million Climate Risk Financing Initiative

Nairobi (AX) — Somalia has hopped aboard a $35 million climate disaster risk project spearheaded by the African Development Bank Group (AfDB) to bolster resilience against climate upheavals. The venture, which encompasses Comoros, Djibouti, and South Sudan, was inked during AfDB’s 2024 Annual shindig in Nairobi.

The Multi-National Climate Disaster Risk Financing Initiative, given the green light on May 3, 2024, via AfDB’s Africa Disaster Risk Financing Programme (ADRiFi), aspires to nurture a welcoming ecosystem for climate risk financing tools. It also seeks to amp up the use of organized climate risk solutions and fortify adaptation and resilience to climate hazards in the involved nations.

Somalia’s Finance Boss Bihi Iman Egeh, alongside counterparts from Comoros, Djibouti, and South Sudan, signed the pact. AfDB’s Dr. Beth Dunford penned her name on behalf of the Bank Group. The occasion also saw the presence of the Bank’s East Africa Head Honcho, Nnenna Nwabufo, and African Risk Capacity (ARC) CEO, Lesley Ndlovu. The ARC is the gear-turner of the ADRiFi program.

The Africa Disaster Risk Financing Initiative’s Multi-Donor Trust Fund backs disaster insurance for African nations to cushion the blow from climate extremities. In tandem with African Risk Capacity Ltd., these funds push for parametric insurance and sundry climate risk management gadgets across the continent.

Since its inception in 2018, ADRiFi has aided 16 African nations with know-how and skills upgrading. The program has ushered countries into the Sovereign Risk Pool managed by African Risk Capacity, shelling out over $100 million on benefiting nations. It has safeguarded over five million souls against harsh droughts and cyclones, while also spicing up anticipatory planning for climate calamities.

The AfDB’s 2024 Annual Meetings, rolled out from May 27 to 31 in Nairobi, gravitate around revamping Africa’s financial frameworks for socio-economic metamorphosis. The agenda includes funding Africa’s shift, evaluating the continent’s natural riches, and grappling with stubborn issues like poverty, inequality, and shoddy infrastructure.

Somali President Hassan Sheikh Mohamud showed up at the meetings, where topics such as “Africa’s Transformation” and revamping the global financial order took center stage. Despite an annual GDP growth leap of 4.3% from 2000 to 2022, Africa still confronts a hefty financial chasm in clinching the Sustainable Development Goals by 2030.

In a complementary twist, the AfDB shelled out $18 million to Somalia for climate change relief during these confabs. This is a welcome boon for Somalia, which has borne the brunt of regular droughts. “We’re elated to nail down $18 million from the African Development Bank. The entire project’s purse is $35 million, with Somalia pocketing more than half. These funds will battle droughts and floods while jacking up agricultural yield,” proclaimed Finance Minister Bihi Iman Egeh.

Across the Horn of Africa, the brutal drought from October 2020 to December 2022 hit over 19.4 million folks and clobbered at least 7 million livestock. ADRiFi aims to tackle such calamities by offering pivotal financial and technical aid to susceptible countries.

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