This commitment comes through the second InsuResilience Investment Fund (IIF II) aimed at bolstering climate resilience for Africa’s rural communities.

The decision stems from the growing concern surrounding extreme weather events like droughts and floods plaguing African nations.

These disasters disrupt businesses and particularly impact small-scale farmers, who are crucial for maintaining food security.

Climate insurance, though still in its early stages on the continent, offers a potential solution.

To accelerate the deployment of such solutions, the two development finance institutions are prioritizing technology-driven approaches.

BII is contributing $15 million, while the NDF is providing $13.5 million. Notably, the NDF’s contribution includes an additional $1 million grant specifically for the “technical assistance mechanism” of the IIF II fund.

This combined funding brings the total capital secured by IIF II to $90 million, nearing its $100 million target. The fund’s final closing is anticipated for the latter half of 2024.

IIF II focuses on providing insurance products that shield communities from climate-related shocks and disasters.

Additionally, the fund invests across various segments of the climate insurance value chain, encompassing traditional insurance firms, technology providers, and service companies.

This approach fosters the development of insurtech, which combines insurance operations with digital tools.

For instance, IIF II participated in a $20 million funding round for Pula, a Nairobi-based insurtech company.

This Series B fundraising, which also attracted the International Finance Corporation (IFC) and the Bill & Melinda Gates Foundation, aims to offer coverage for livestock – a sector severely impacted by recent droughts in the Horn of Africa and the Sahel.

Pula’s insurance products have already benefitted over 15.8 million farmers across Africa, Asia, and Latin America.