The Extreme Climate Facility (XCF) – A Multi-Year Financial Vehicle to Secure Direct Access to Climate Adaptation Funds for Africa

Joanna Syroka

Abstract


Experts estimate an adaptation investment cost need of $14-17 billion per year over the period 2010-50 for sub-Saharan African countries to adapt to an approximately 2°C warmer climate forecast for 2050. Climate change is particularly threatening to the future of African agriculture, which impacts global food security and the economic livelihoods of hundreds of millions of Africans. To date, funds have not been forthcoming in the magnitude required. As a result, African leaders have been exploring innovative and diverse ways to address the challenge of providing funding for climate adaptation across the continent. The Extreme Climate Facility (XCF) will be a new, multi-year financial mechanism designed to utilise both public and private capital to secure direct access to climate adaptation funds for African governments to respond to the impacts of increased climate volatility. This paper outlines the XCF concept and the work that will be carried out by African Risk Capacity – a Specialized Agency of the African Union established to improve national capacities to better plan, prepare and respond to extreme weather events and natural disasters – to fully design and establish the financial vehicle for its African Union Member States.

Keywords


climate change; climate adaption finance; catastrophe bonds; African Union; African Risk Capacity

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References


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