Somalia joins $35 million AfDB climate disaster risk financing project

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Somalia has joined a $35 million climate disaster risk financing project launched by the African Development Bank Group (AfDB) to enhance resilience against climate shocks. The project also includes Comoros, Djibouti, and South Sudan and was signed during the AfDB’s 2024 Annual Meetings in Nairobi.

The Multi-National Climate Disaster Risk Financing Project, approved on May 3, 2024, under the AfDB’s Africa Disaster Risk Financing Programme (ADRiFi), aims to foster an environment conducive to adopting climate risk financing instruments. It will also enhance the uptake of pre-arranged climate and disaster risk financing mechanisms and strengthen adaptation and resilience against climate risks in the participating countries.

Somalia’s Finance Minister Bihi Iman Egeh, along with counterparts from Comoros, Djibouti, and South Sudan, signed the agreement. AfDB Vice President Dr. Beth Dunford also signed on behalf of the Bank Group. The event was attended by the Bank’s Director General for East Africa, Nnenna Nwabufo, and the African Risk Capacity (ARC) Chief Executive Officer, Lesley Ndlovu. The ARC is the implementing partner of the ADRiFi programme.

The Africa Disaster Risk Financing Program Multi-Donor Trust Fund supports disaster insurance protection for African countries to mitigate the adverse effects of climate-related extremes. Collaborating with African Risk Capacity Ltd., the funds promote parametric insurance and other climate risk management instruments across the continent.

Since its establishment in 2018, the ADRiFi Programme has supported 16 African countries with technical assistance and capacity building. The program has facilitated access to the Sovereign Risk Pool managed by the African Risk Capacity, investing over $100 million in beneficiary countries. It has protected over five million people against severe droughts and tropical cyclones and enhanced anticipatory planning for climate disaster risks.

The AfDB’s 2024 Annual Meetings, held from May 27 to 31 in Nairobi, focus on restructuring Africa’s financial systems for socio-economic transformation. Key discussions include financing Africa’s transformation, measuring the continent’s natural capital, and addressing the significant challenges of poverty, inequality, and inadequate infrastructure.

Somali President Hassan Sheikh Mohamud attended the meetings, where themes such as “Africa’s Transformation” and the reform of the global financial architecture were prominent. Despite achieving an annual GDP growth rate of 4.3% from 2000 to 2022, Africa still faces a substantial financing gap to achieve the Sustainable Development Goals by 2030.

In a related development, the AfDB donated $18 million to Somalia for climate change relief during these meetings. Somalia, which has been significantly affected by recurrent droughts, will benefit greatly from this project. “We are very pleased to have secured $18 million from the African Development Bank. The total budget for this project is $35 million, with Somalia receiving more than 50% of the funds. These funds will be used to tackle droughts and floods and boost agricultural production,” said Finance Minister Bihi Iman Egeh.

Across the Horn of Africa, the severe drought from October 2020 to December 2022 affected over 19.4 million people and killed at least 7 million livestock. The ADRiFi Programme aims to address such challenges by providing crucial financial and technical support to vulnerable countries.