The Inter-American Development Bank (IDB) has announced the launch of the world’s first-of-its-kind, $5 million Climate-Smart Agriculture Fund for Latin America and the Caribbean (CSAF).
Created in partnership with the Global Environment Facility (GEF), the focus of the fund will be to spark private sector investments in projects within the target regions that increase farmers’ incomes while also positively addressing climate change, and to increase private sector investment in sustainable, climate-resilient agribusinesses.
Climate-smart agricultural investments and projects are often met with a variety of challenges in accessing financing including lengthy payback periods and a lack of information on sustainable practices. The CSAF will address these difficulties through providing risk-tolerant capital with patient tenors to offset early losses and providing a concessional tranche of resources that can be used to fund the conversion of outdated agricultural operations to sustainable business investments, while also offering technical assistance to help in scaling up projects toward implementation.
The fund’s investments will center on restoring degraded farmland through reforestation and other measures that will result in higher productivity and profitability, water efficiency investments, sustainability certification, and improved agricultural management.
“Our efforts thus far have produced solid results on climate mitigation,”says Kelle Bevine, Head of Strategy in the Structured and Corporate Finance Department of the IDB. “This new initiative complements those achievements with a first-of-its-kind fund to pursue equally ambitious results on climate adaptation.”
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