More than USD 29 million has been mobilised to support Madagascar’s response and recovery following tropical cyclones Fytia and Gezani through a combination of pre-arranged financing solutions facilitated by the African Risk Capacity (ARC) and partner institutions.
This financing was activated through three complementary instruments established in advance: Madagascar’s sovereign parametric insurance coverage, replica insurance supporting humanitarian partners and additional resources mobilised through the Regional Emergency Preparedness and Access to Inclusive Recovery (REPAIR) programme. Together, these mechanisms have enabled a coordinated financial response to the cyclones’ impact.
The two cyclones affected more than half a million people and displaced at least 67,000 people, according to the Bureau National de Gestion des Risques et des Catastrophes (BNGRC), causing widespread damage to infrastructure, livelihoods and essential services across several regions of the country.
The resources were activated through mechanisms established in advance to strengthen Madagascar’s financial preparedness for climate-related disasters. By mobilising several financing streams in close succession, the response combines rapid liquidity for immediate action with additional resources to sustain recovery and stabilisation efforts. The financing is supporting national authorities and humanitarian partners in addressing urgent needs, protecting livelihoods and reinforcing recovery in affected areas.
Preparedness and partnership in action
Madagascar has worked closely with ARC over several years to develop and implement risk financing solutions aligned with its exposure to tropical cyclones and climate-related shocks. The activation of several complementary mechanisms following cyclones Fytia and Gezani reflects this sustained collaboration and the importance of financial preparedness.
Dr Jean Chrysostome Ngabitsinze, ARC’s Group Director General, said: “Our thoughts are with all those affected by cyclones Fytia and Gezani. Madagascar has demonstrated strong leadership in strengthening its preparedness for climate-related shocks and has been a longstanding and committed partner of ARC. The resources mobilised today are the result of that collaboration and foresight. ARC remains fully committed to standing alongside Madagascar as response and recovery efforts continue.”
Financing designed to respond to complex climate risks
David Maslo, Chief Executive Officer of ARC Ltd, added: “Climate-related disasters require financing that can respond to different types of impact and at different moments of a crisis. The activations supporting Madagascar illustrate how combining complementary solutions can provide rapid initial liquidity while also ensuring sustained support for recovery. This is central to ARC’s mission to help countries strengthen their financial resilience to climate shocks.”
Within this coordinated financing response, Madagascar was able to rapidly access resources through multiple pre arranged financial layers.
The government first drew on USD 19.9 million from the REPAIR programme’s reserve, a World Bank initiative implemented by ARC Ltd that provides countries with rapid access to financing to support early response efforts following severe climate events.
The severity of the cyclones also triggered ARC’s sovereign parametric insurance coverage, releasing approximately USD 5.6 million, while USD 3.79 million was mobilised through replica insurance supporting humanitarian partners.
This sequence illustrates how layered disaster risk financing can provide both rapid initial liquidity and additional protection when climate shocks exceed certain thresholds, strengthening countries’ financial resilience to increasingly complex climate risks.
Caroline Cerruti, World Bank Lead Financial Sector Specialist and REPAIR Regional Lead, stated: “With REPAIR, the World Bank is committed to reinforcing the capacity of countries in the region to respond to severe climate events. These disbursements demonstrate how pre-arranged financing, coupled with strengthened operational systems, can provide the resources and frameworks required to respond to complex disasters. This coordinated approach is essential for transforming how the region manages climate shocks and protects affected communities.”
Dr Ramiarison Herijantovo Aimé, Minister of Economy and Finance of the Republic of Madagascar, concluded: “The rapid mobilisation of financing following these cyclones has provided important support to Madagascar’s national response. Continued collaboration with ARC, the World Bank and partners strengthens our capacity to respond effectively to disasters and support affected communities.”
Strengthening financial resilience to climate shocks
Madagascar is among the African countries most exposed to tropical cyclones and climate-related disasters. Strengthening financial preparedness and access to rapid-response financing has become an increasingly important component of national disaster risk management strategies across the continent.
ARC works with African Union Member States and partners to develop and deliver risk financing solutions that enable countries to better plan, prepare and respond to extreme weather events. By combining insurance mechanisms, contingency financing and technical support, these approaches help ensure that resources are available quickly when disasters occur and that recovery can begin without delay.