One Acre Fund Agri Insurance (IFC-605904)

Countries
  • Kenya
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Active
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
U
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Aug 16, 2022
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
One Acre Fund
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Agriculture and Forestry
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Advisory Services
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 0.99 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ IFC website

Updated in EWS Jan 9, 2023

Disclosed by Bank Oct 13, 2022

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to the Bank’s website, activities under the project will be organized around three main components:

COMPONENT 1: ESTABLISHMENT OF A RISK MANAGEMENT/PARTICIPATION VEHICLE

The main goal of this component is to enable 1AF to streamline its insurance operations for better time and cost efficiency. Centralized insurance financing would also allow for the pooling of risk across different countries (diversification benefits).

COMPONENT 2: PRODUCT AND CAPACITY DEVELOPMENT SUPPORT

To address the need for 1AF to develop new high quality climate/index insurance products for its farmers, IFC will:
1. Support 1AF in the acquisition of data that can facilitate more accurate index insurance product development. This includes farmer GPS and remote sensing data.
2. Provide technical advisory for the development of new insurance products by 1AF. This may include technical review of products developed by 1AF and its other partners, and advice on the establishment of a robust basis risk validation process for index-based insurance products. It may also include the exploration of a corporate-level index-based product, covering 1AF's entire credit portfolio.
3. Train 1AF staff on agri insurance product evaluation and the management of the proposed risk management/participation vehicle.

COMPONENT 3: HIGH-VALUE INSURANCE TRIAL

1AF’s current insurance arrangement only covers 50-60% of the cost of inputs loaned to the farmers. The organization would like to conduct research to estimate the level of coverage that would most contribute to higher farmer resilience (without over-insuring the farmer), i.e., should insurance cover the full value or a certain percentage of the expected yield? In addition, how much premium can farmers afford for the ideal coverage? What metrics should be used to measure farmers’ improved resilience? 1AF would then like to use the results to gradually transition its farmers from input-based insurance to this “high-value” insurance.

IFC will support 1AF in addressing this need by mobilizing resources for a controlled trial in one country (possibly Malawi). This trial will seek to test the impact of different insurance coverage levels on farmer resilience. It will also establish the most ideal metrics to use in measuring farmer resilience to climate risk. Study findings will be made public and could potentially be applied by other stakeholders with an interest in promoting access to resilience-building instruments for the agricultural sector.

A research firm will be competitively selected to design and monitor this study for at least 3 cropping seasons (between 2022 and 2025).

Investment Description
Here you can find a list of individual development financial institutions that finance the project.
Private Actor 1 Private Actor 1 Role Private Actor 1 Sector Relation Private Actor 2 Private Actor 2 Role Private Actor 2 Sector
- - - - One Acre Fund Client -

Contact Information
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No contact information provided at the time of disclosure.

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ACCOUNTABILITY MECHANISM OF IFC/MIGA

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org

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How it works