The Financial Innovations Lab on climate smart systems finance for smallholder agriculture hosted by the Smallholder Action Coalition on Climate Adaptation (SACCA) in Abu Dhabi. This is part of the ongoing initiative to build resilient, climate smart strategies for sustainable global growth through innovative finance solutions.  The Lab, sponsored by a consortium led by Syngenta Foundation for Sustainable Agriculture and included global thought leaders, researchers and policymakers with business, finance, technology and development practitioners to accelerate relevant innovations and the adoption of climate smart solutions at scale.

During the Lab, we identified the financing challenges for technology solutions aimed at smallholder agriculture value chains that feed almost 60% of the world’s population and produce substantial carbon emissions.  This global smart farming market is expected to reach US$33.7 billion by 2029, registering a CAGR of 12.9 percent during the forecast period 2022-2029.  SACCA’s goal is to engage and support 30 million smallholder farmers to transform how they adapt to climate change over the next 10 years creating increasing yields and production resilience to address food security and increase farmer incomes while decreasing carbon emissions.

Our goal with this Financial Innovation Lab is to design aligned and integrated ‘systems finance’ capital structures necessary to enable climate-smart technologies and methods to be adapted to and adopted by small-holder farmers. We identified and initiated relevant policy changes at local, regional, and national levels; and launch solutions that can unlock adoption of the resulting climate-smart solutions at scale.  Our approach is to recognize the smallholder agriculture value chain as a financeable opportunity and use a “systems finance” approach to accelerate solutions that can mitigate risks, share and lower costs, and increase balanced and sustainable returns.

The Financial Innovations Lab focused on how to build a systems finance platform using a combination of private, public, and philanthropic capital across the agriculture value chain, including suppliers, farmers, off takers, processors, sellers and providers of carbon and other ecosystem service incentives.  We explored the challenges and obstacles in finance for the climate-smart smallholder value chain, review best practices in tools, programs, and practices, and begin to answer these core questions:

  • What are the obstacles and challenges to crowding-in new capital into these systems?
  • How to de-risk investments to create a balanced, market-oriented system of financing?
  • How to organize, manage, and operate a sustainable system finance platform across value and supply chains?

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