Today, 80% of firms and about 60% of households in sub-Saharan Africa face regular unplanned electricity outages – new paper outlines benefits of climate risk transfer solutions and invites public and private sector actors to drive their deployment
Nairobi/Paris/London, 16 September 2026 – IDRIMA, the Integrated Disaster Risk Management Alliance formed by the Insurance Development Forum (IDF) and AFD Group (Agence Française de Développement and Expertise France – AFD), has launched a new paper, From Exposure to Protection: The Case for Parametric Insurance Revenue Cover for Hydro-Dependent Utilities in Eastern and Southern Africa. A brief for action, the paper outlines the climate-financial risks that energy systems in Africa face and proposes parametric insurance as a tested and yet to be scaled solution with specific benefits, from protecting hydro-dependent utility revenues, to shielding public finances and energy tariffs.
Hydropower accounts for over 17% of electricity generation across Africa, and above 80% in countries such as the Democratic Republic of the Congo (DRC), Ethiopia, Malawi, Mozambique, Uganda and Zambia. This dependence makes electricity supply, public finances and sovereign creditworthiness directly vulnerable to hydrological variability, a risk that climate change is making more frequent, more severe and increasingly unpredictable.
The paper outlines how revenue protection can complement investment in resilient infrastructure, and highlights the potential for regional risk pooling to expand access to protection. Including case studies, it also presents practical steps which power utilities, ministries of finance, energy and insurance regulators, international financial institutions and development banks, as well as private finance institutions are invited to take to enable insurance protection to be put place.
Céline Boulay, IDRIMA facility lead at the AFD Group, said: “The current El Niño-Southern Oscillation (ENSO) makes the risks faced by energy utilities a stark reality, especially in Africa and Latin America. We hope that this paper will help understanding of how parametric insurance for critical infrastructure can be integrated into national disaster risk financing strategies, alongside reserves and contingent credit – and prompt action. As IDRIMA, we are ready to help.”
Ekhosuehi Iyahen, Secretary General, Insurance Development Forum, said: “Energy supply is at the heart of every country’s economic and social development; when it fails people and businesses suffer real consequences and economies pay the price. The role of insurance is to facilitate development and protect from shocks, and we are delighted to provide a practical guide for action with concrete recommendations through this IDRIMA paper, at a most relevant time.”
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Acknowledgements – From Exposure to Protection: The Case for Parametric Insurance Revenue Cover for Hydro-Dependent Utilities in Eastern and Southern Africa
We would like to acknowledge the contributions of:
Robin Nizou and Céline Boulay (AFD Group, IDRIMA Facility); Ivo Menzinger (Co-Chair of the IDF Operating Committee); Ruth Lux (Co-Chair, IDF SHS Working Group); Kipkorir Koskei and Claudia Thyme (IDF Secretariat); Camille Von Lowis of Menar (AFD Group, Climate & Nature team); Fernando Cevallos (AFD Group, Energy team); Gloria Karissa and Linet Odera (ZEP-RE).
Notes for Editors
About IDRIMA
IDRIMA (Integrated Disaster Risk Management Alliance) is a Facility under AFD Group designed to better integrate insurance and climate risk transfer solutions into development finance. Building in particular on IDF members expertise, it supports public actors in understanding, managing and transferring climate risks, complementing adaptation efforts and helping build long-term financial resilience.
About the AFD
AFD Group finances and drives the transition to a fairer, safer and more resilient world, working with its partners to support communities all over the world. Drawing on the complementary strengths of its entities – Agence Française de Développement for public financing, Proparco for responsible private investment, and Expertise France for technical expertise – the Group is ideally positioned to meet all sustainable development challenges.
Working in over 160 countries, including France’s Overseas Territories and Departments, the Group adapts its operations to the realities on the ground, actively supporting local initiatives. With over 4,000 projects, whose objectives are aligned with the Sustainable Development Goals (SDGs), AFD Group works on behalf of the French people, together with all stakeholders committed to economic development and the preservation of common goods: climate, biodiversity, peace, gender equality and global health. Working by your side, toward a world in common.
For more information, visit: www.afd.fr
About the Insurance Development Forum (IDF)
The Insurance Development Forum (IDF) is an industry-led Public-Private Partnership bringing together insurance industry leaders, government officials and international organisations.
Launched at the UN Conference of the Parties (COP21) Paris Climate Summit in 2015, the IDF looks to leverage the technologies, expertise and financial mechanisms native to the insurance industry to enable disaster vulnerable nations, economies and populations to build risk understanding and enhance resilience.
For further information, please visit: www.insdevforum.org
