JOHANNESBURG, 28 February 2025 – African Risk Capacity Limited (ARC Ltd.) and the
International Finance Corporation (IFC) have signed a Letter of Engagement today to
strengthen agricultural insurance solutions in Africa. This partnership aims to create a safer
and more attractive environment for investment in agriculture by reducing risks linked to
climate change and other uncertainties. The signing took place at the Marriott Hotel
Melrose Arch in Johannesburg, South Africa, with Lesley Ndlovu, CEO of ARC Ltd., and
Sérgio Pimenta, IFC Vice President for Africa, along with their teams.

Agriculture is the backbone of Africa’s economy, providing livelihoods for millions. Yet,
farmers and agribusinesses struggle to secure funding due to the high risks posed by
unpredictable weather, market fluctuations, and limited financial protections. Africa has
approximately 183 million hectares of cultivated land, with 95% of it dependent on rainfall,
making the sector highly vulnerable to climate variability. The World Bank estimates that
food demand will increase by 70% by 2050, requiring massive investments in agriculture.
However, in Africa, less than 5% of farmland is irrigated, and access to financing remains
a major barrier to growth. Without effective risk management solutions, many investors
hesitate to support agricultural projects, leaving farmers exposed and food production
unstable.

Through this new partnership, ARC Ltd. and IFC will develop insurance solutions that help
farmers, financial institutions, and agribusinesses manage these risks. The initiative will
support the IFC Africa Inclusive Insurance Program (AIIP) by introducing insurance
products that protect farmers from climate shocks and other uncertainties. This will not only
reduce financial losses but also encourage more investment in agriculture, leading to
increased food production and improved food security across the continent.
The collaboration will focus on several key areas, including identifying priority regions for
agricultural insurance, developing tailored insurance products, and working with
governments, financial institutions, and AgTech providers to expand access to risk

 protection. By ensuring that farmers and businesses can recover quickly from losses, this
initiative will create a more stable and productive agricultural sector.
“This partnership is an important step in our mission to strengthen Africa’s resilience to
climate and financial risks,” said Lesley Ndlovu, CEO of ARC Ltd. “By working with IFC,
we can scale up agricultural insurance solutions and provide farmers with the confidence
to invest in their future.”

Sérgio Pimenta, IFC Vice President for Africa, highlighted the impact of the initiative:
“Agriculture is central to Africa’s economy and food security. Supporting food security and
nutrition of the continent is an important priority for IFC in Africa which reflects our
commitment to fostering economic development and resilience in the region. With this
collaboration, we are creating insurance solutions that will protect farmers and attract the
investments needed to drive sustainable growth in agriculture.”

At a time when climate change and global food demand are putting increased pressure on
African agriculture, this partnership marks a significant step toward ensuring food security
and economic stability. By reducing risks and increasing access to financial protection,
ARC Ltd. and IFC are working to build a stronger, more resilient future for African farmers
and investors alike.