African Risk Capacity

Project completed

The African Risk Capacity (ARC) is a continental index-based weather risk insurance pool and early response mechanism initiated by the African Union. It will offer insurance coverage for governments of African countries transferring risks to the international financial market and complementing national or regional micro-insurance schemes as supported by other SDC organisational units. With this project the SDC will co-finance the design phase implemented by the World Food Programme and after that the Specialized Agency of the African Union in its task to enable more countries to join the ARC.

Country/region Topic Period Budget
Humanitarian Assistance & DRR
Employment & economic development
Agriculture & food security
Material relief assistance
Financial policy
Agriculture value-chain development (til 2016)
01.12.2012 - 31.10.2016
CHF  4’500’000

Droughts and floods are the two most frequent natural disasters that impact on the food security of vulnerable communities in Africa. In case such a disaster causes a call for humanitarian aid, relief often only arrives six to nine months later. An insurance scheme for governments based on satellite images would allow immediate payout and promises relief to the affected communities before they have to start selling their productive assets.


To provide participating African governments with effective financial weather risk management tools and funds to respond to extreme climate events and to incentivise improved disaster risk reduction, planning and response.

Target groups

The immediate beneficiaries are the African Union member states and the regional bodies that interact with the project, as they will receive technical assistance in financial disaster preparedness and weather risk management. The indirect beneficiaries are the most vulnerable, food insecure populations of these countries, who will receive more timely and effective assistance in the event of weather disaster.

Medium-term outcomes

African-owned risk pool (ARC) provides pooled contingency funding mechanism to African countries for planned responses to extreme climate emergencies. Indicators: 1) Number of risk pool participation requests received by project from national governments; 2) Number of countries with developed drought response contingency plans linked to contingent funds.


Results from previous phases:  

The ARC design phase started in January 2011. Up to now USD 10 mio have been mobilized for the design of the ARC and six African countries have signed pre-agreements with the ARC for their participation in the risk pool.

Directorate/federal office responsible SDC
Credit area Development cooperation
Project partners Contract partner
United Nations Organization (UNO)
  • World Food Programme

Budget Current phase Swiss budget CHF    4’500’000 Swiss disbursement to date CHF    4’408’820
Project phases Phase 3 10.12.2019 - 31.12.2022   (Current phase) Phase 2 01.12.2016 - 31.08.2021   (Completed)

Phase 1 01.12.2012 - 31.10.2016   (Completed)