Africa may only be responsible for a small portion of the world’s carbon emissions, but the continent is also considered by many to be one of the most vulnerable to the planet’s changing climate. Weather-related disasters are already undermining the record growth in the nations of Africa and is threatening their hard-won gains in development.
In order to combat this, African states have announced a strategic move to leverage available capital for climate change adaption with the Called the African Risk Capacity (ARC) Extreme Climate Facility (XCF), a multi-year funding mechanism that will issue climate change catastrophe bonds.
“Africa needs solutions. The XCF will offer African nations a new financing mechanism to manage climate risks by providing direct access to new private capital and by leveraging development partner contributions. We are leading the way in innovative climate finance,” said Doctor Ngozi Okonjo-Iweala, Nigeria’s Minister of Finance and Chair of ARC’s Governing Board, ahead of the United Nations Climate Summit in New York.
“XCF will ensure that African countries and the international community appropriately monitor climate shocks and will be financially prepared to implement specific adaptation measures in an effective and accountable manner, leveraging ARC’s existing public-private infrastructure,” says Dr. Richard Wilcox, founding Director General of ARC. “The XCF allows us to leverage private capital against the risk of increased frequency of severe climate events, while using public money to fund immediate and certain adaptation requirements,” said Doctor Richard Wilcox, founding Director General of ARC.
Read more about the story at Reuters.