EIB approves $10m for debt fund managed by BlueOrchard

The European Investment Bank has approved a debt investment of up to $10 million in the senior notes of the InsuResilience Investment Fund, which is a debt sub-fund, lending to financial institutions and aggregators, mainly microfinance institutions (MFIs), in return for participation in the development and distribution of climate risk insurance. The total size of the fund is approximately $150 million and is managed by BlueOrchard Asset Management.

The InsuResilience Investment Fund, formerly known as Climate Insurance Fund, is an initiative of KfW, the German Development Bank, on behalf of the German Ministry for Economic Cooperation and Development (BMZ).

The fund aims to protect the most vulnerable people in agricultural regions of developing countries against the impacts of climate change. Thanks to the funding and product development support provided by the fund, the financial institutions will be in the position to offer insurance against climate risks in developing countries, as well as to make this insurance accessible and affordable. By providing compensation for damages and helping those impacted to re-establish their livelihoods, the climate insurance linked to loans in local currency provided will protect the final beneficiaries from large losses and help them to cope with the economic effects of weather events.

This will enable farmers, micro and small businesses to invest in their businesses rather than having to reduce important expenses which would negatively affect their well-being in the short- and long-term. At the same time, the financial institutions will benefit from the insurance as it could indirectly reduce their non-performing loans.

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