74 Malte Marek KfW’s Senior Portfolio Manager Andrew Wilson UK FCDO Adviser DONOR PARTNER INTERVIEW: KfW DEVELOPMENT BANK & THE UNITED KINGDOM FOREIGN, COMMONWEALTH & DEVELOPMENT OFFICE ARC Ltd. poised to become one of the most important players in disaster risk finance in Africa KfW Development Bank, acting on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ)’s and the United Kingdom Foreign, Commonwealth & Development Office (FCDO)havewalkedthepathwithARCLtd.sinceits inception.Through significant funding, they have contributed to the development and diversification of the company over the last decade. “Diversification is key for every insurance company to absorb risk. Since progress on sovereign insurance has been slow, ARC Ltd.’s approach to diversifying beyond the classic products is much welcomed – especially their cooperation with the World Bank,” says KfW’s Senior Portfolio Manager Malte Marek. “This can open the door for ARC Ltd. to become one of the most important players in disaster risk finance in Africa and has the potential of smoothing the income stream for ARC Ltd., which is key for its sustainability.” In addition to their capital contributions, KfW and the FCDO oversee ARC Ltd.’s governance and development strategy while facilitating sovereign participation in the business through premium subsidy schemes. UK FCDO Adviser Andrew Wilson says they consider the risk pools and ARC Ltd. as key to providing climate risk insurance in Africa and have invested over $38 million in the company. “The FCDO has supported the ARC ecosystem through capital investments, technical assistance, and premium subsidies.” In turn, the lessons learnt from ARC Ltd. through this partnership will help inform future programmes at the FCDO. The mutually beneficial partnership between ARC Ltd., the World Bank and the African Development Bank has also grown stronger over the last year. “The FCDO was pleased to see this partnership develop further. We have long advocated for greater engagement with the multilateral systems,” he explains. “The increased collaboration with World Bank, including DRIVE, REPAIR, and Malawi SRSP, has been a major success for ARC and the World Bank in recent years.” The FCDO has also contributed to ARC Ltd.’s diversification strategy by co-founding the World Food Programme’s regional cover through the Global Shield. This cover provides insurance with a longer return period and better value for money. “We continue to explore additional capital investment for ARC Ltd.,” Wilson adds. DONOR PARTNER I NTERV I EW
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