Africa needs new financing models to scale climate solutions, forum hears
Participants said the financing available often does not match the investments farmers and agricultural enterprises need to make.
Rwanda's Climate Finance Nexus Forum, held in Kigali, has emphasized the need for new financing models to enable African farmers to adopt climate-smart technologies. The challenge for the continent is now primarily about financing existing solutions rather than developing new ones. During the forum, organized by Heifer International at the Africa Food Systems Forum, various stakeholders including governments, financial institutions, development partners, technology companies, and farmer organizations discussed ways to funnel more capital into African agriculture.
Farmers are already implementing solutions such as solar irrigation, renewable energy for cooling and processing, improved water management, and other technologies that can decrease costs, prevent losses, and boost productivity. However, the available financing often falls short of the investments required by farmers and agricultural enterprises.
Financial institutions find agriculture challenging to finance due to unpredictable revenues, insufficient infrastructure, and exposure to weather, production, and market risks. Farmers and cooperatives, meanwhile, may not find financing structured to accommodate the unique realities of agricultural businesses.
An example from Uganda’s dairy sector demonstrates a potential solution to this gap. At Migina Milk Collection Centre, solar-powered cooling has led to the elimination of milk losses and a 22.6 percent increase in milk suppliers. The cooperative, technology provider, milk processor, commercial finance, insurance, and Heifer International are all working together.
This connected model turns an investment in renewable energy into improved performance for the agricultural business while creating a stronger foundation for commercial finance. Safia Boly, Senior Vice President, Africa, Heifer International, highlighted that climate finance must ultimately reach businesses and farmers at the "first mile," transforming climate finance into credit that businesses can use rather than a grant that must be waited for.
Written by urgent.news from Capital Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
