The European Investment Bank (EIB), through its development arm EIB Global, is providing a grant of up to €4 million to the World Food Programme (WFP) to support the development and rollout of tailored climate-risk insurance products for smallholder farmers in Ethiopia. It is the first climate-risk insurance project backed by the EIB. This was announced at the ongoing United Nations Convention to Combat Desertification (UNCCD) COP 17 in Mongolia.
The grant will complement EIB Global’s €110 million credit line for the third phase of the Rural Financial Intermediation Programme (RUFIP III) in Ethiopia. The credit line is channeled through the Development Bank of Ethiopia and on-lent to eligible rural finance institutions. The grant is financed under the African, Caribbean and Pacific (ACP) Trust Fund’s Member States Compartment.
The initiative is designed to de-risk the agricultural portfolios of rural finance institutions under RUFIP III and help final beneficiaries accessing RUFIP III financing manage climate-related shocks. Activities supported by the grant will include capacity building for the Development Bank of Ethiopia, rural finance institutions and smallholder farmers, as well as the establishment of a Premium Guarantee Fund to pre-finance insurance premiums.
