BII and NDF invest $30m in climate insurance technologies in Africa
As climate disruption threatens the livelihoods of rural populations in Africa, British International Investment (BII) and the Nordic Development Fund (NDF) are investing $29.5 million in climate insurance technologies. This will be through the second InsuResilience Investment Fund (IIF II).
The succession of droughts and floods in several African countries is affecting businesses and small-scale farmers, who play a key role in food security. One of the responses to these disasters is climate insurance, which is still at an embryonic stage of development on the continent. In order to accelerate the deployment of this solution, two development finance institutions are choosing to finance technology-based approaches.
British International Investment (BII) and the Nordic Development Fund (NDF) are injecting $29.5 million into the second InsuResilience Investment Fund (IIF II), a joint initiative of the German Development Bank (KfW) and the Zurich, Switzerland-based investment company BlueOrchard Finance. Of the funding announced, $15 million is being provided by the BII.
Funding for assurtech
For its part, the NDF is providing $13.5 million, as well as a $1 million grant “for the technical assistance mechanism of the IIF II fund”. The NDF and BII investments bring to $90 million the funds already raised by IIF II, out of a target of $100 million. Final closing is scheduled for the second half of 2024.
IIF II provides insurance products that offer cover against climate shocks and disasters. The fund also invests in the climate insurance value chain, from traditional insurance companies to technology and service providers. The mechanism thus supports the development of assurtech, which brings together companies operating in the insurance market with the help of digital technology tools.
For example, IIF II participated in a $20 million financing round launched by Nairobi, Kenya-based assurtech Pula. This Series B round of financing, in which the International Finance Corporation (IFC) and the Bill & Melinda Gates Foundation also participated, aims to cover livestock farming, which has been particularly hard hit in recent years by drought in the Horn of Africa and the Sahel. The start-up’s insurance products have already benefited at least 15.8 million farmers in Africa, Asia and Latin America.
