In February 2026, floodwaters triggered by Tropical Cyclones Fytia and Gezani surged through fields and farmlands in Madagascar, washing away crops and harvests across an estimated 174,000 hectares. The successive tropical cyclones that hit killed more than 70 people and displaced about 67,000 others, disrupting essential services and food systems.
Within weeks, the government of Madagascar received an insurance payout of $5.6 million through the African Risk Capacity, part of a disaster risk coverage scheme backed by the African Development Bank Group. Though its Africa Disaster Risk Financing Programme (ADRiFi), the Bank Group assisted Madagascar with paying the insurance premiums that made the compensation payments possible.
"The Africa Disaster Risk Financing Programme strategically pools resources from multiple donors, national governments and international agencies to fund the insurance premiums as well as technical assistance for these insurance schemes. The African Development Bank Group embraces this shared-responsibility model that scales financing to assist African countries be less reactionary to disasters, and instead be more proactive about risk management," said Donald Singue, the Bank's ADRiFi coordinator.
The programme operates a dedicated Multi-Donor Trust Fund established in 2021 that aggregates financing from partners including Canada, the United Kingdom, Norway and the Netherlands. This structure allows donors to combine resources under one framework, enhancing the efficiency and impact of climate risk financing.
In 2018, the Bank partnered with the African Risk Capacity Group, a specialized agency of the African Union, as it provides technical expertise and insurance risk pools. By requiring countries to pay a portion of the insurance costs, the programme ensures governments have advance planning and pre-approved funding to respond to climate shocks.
Through the programme, more than 8 million people have received protection against severe climate disasters. More than $330 million in climate risk has been transferred to international insurance markets via the programme, which has overseen more than $72 million in payouts to participating countries to support disaster early response and recovery efforts.
The Government of Madagascar is using the payout to assist cyclone-affected communities rebuild, reducing the risk of flooding survivors resorting to eating agricultural seeds as food, selling farm tools, or migrating in search of work.
In March, at a ceremony attended by the government, officials from the African Development Bank, African Risk Capacity and partner institutions presented symbolic checks for $4.87 million to aid Cyclone Gezani recovery efforts and for $770,000 for Cyclone Fytia. With the support of the Africa Disaster Risk Financing Programme, the Government of Madagascar has received approximately $13 million in insurance payouts against disaster risks over the last five years.
" Madagascar has demonstrated strong leadership in strengthening its preparedness for climate-related shocks and has been a longstanding and committed partner of [African Risk Capacity]," said Dr Jean Chrysostome Ngabitsinze, African Risk Capacity Group's Director General.
Operating in 18 countries, the Africa Disaster Risk Financing Programme aligns strongly with the New African Financial Architecture for Development, Bank Group President Sidi Ould Tah's strategic for the Bank to mobilise capital at scale for the continent's development. By making sovereign climate risk financing pre-arranged, contractual, and predictable, the programme advances two of the Bank's Four Cardinal Points: enhanced access to capital; and reforming financial systems.
"The payments represent more than just financial support - they embody a message of hope, solidarity, and resilience for thousands of families facing climate uncertainties. They underscore the importance of investing in prevention, preparedness, and robust protection mechanisms," said Adam Amoumoun, African Development Bank Group Country Manager for Madagascar, at the payout ceremony.
To learn more about the Africa Disaster Risk Financing Programme: Alphonso Van Marsh, Chief Digital Content and Events Officer, email: [email protected]
