African Risk Capacity Limited (ARC), a specialised agency of the African Union, has issued an insurance payout of $2,767,958 to the Government of the Kingdom of Lesotho, after its sovereign drought insurance policy for the 2024/25 agricultural season was triggered.
This payout was made possible by the Government’s subscription to ARC’s sovereign risk financing mechanism and will fund the country’s Final Implementation Plan (FIP), which will be in the form of emergency food aid and cash transfers to households affected by the drought.
The two ARC drought insurance policies (crop and rangeland) taken out for the season were funded through the Africa Disaster Risk Financing (ADRiFi) programme, an African Development Bank/ARC initiative, and premium support from the German Development Bank KfW.
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