Agriculture Climate Finance Landscape
Open Capital, in partnership with Climate Policy Initiative (CPI), conducted a landscape analysis of climate finance options for agriculture across sub-Saharan Africa. Through extensive analysis, we assessed the status quo, barriers, and identified opportunities to further scale climate finance across the continent. The report provides valuable insights into climate finance for agriculture in sub-Saharan Africa, exploring avenues for low-emissions agriculture, and suggesting interventions to facilitate the flow of climate finance.
To identify opportunities, we first needed to understand the barriers; our research identified a range of both supply- and demand-side barriers to climate finance flows:
On the supply side, the key barriers primarily relate to the limited maturity and depth of local financial markets, alongside the limited range financing instruments available. We also noted limitations in regulation and policy that constrained the growth of climate finance.
On the demand side, factors such as fragmented markets, small business sizes, limited investment readiness, and the lacking understanding of measuring climate impact and climate finance options, including how to access them, were the most prevalent barriers.
While our recommendations identified important actions for USAID at the time of the engagement, they remain relevant and can be applied by other donors and development agencies operating in similar contexts. Our research showed that early-stage countries should prioritize development of climate-smart projects, relevant government policies, and regulations to enable climate change response and attract investments. On the other hand, advancing countries should focus on enhancing the use of suitable climate finance instruments (e.g., carbon credits and green bonds), strengthening market information systems, supporting fiscal reform to incentivize low-carbon investments, and strengthening developer capabilities to develop climate-friendly projects.
Click here to read the full OCA & CPI - Climate Finance Innovation for Agriculture report
