The Southern African farmers’ challenge: climate finance for agriculture

Kai Windhorst

Fin4ag - 17 July 2014 – Nairobi, Kenya

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The challenge

Climate Finance objectives: Increase food security, strengthen climate change resilience and improve livelihoods of the rural poor while reducing emissions or increasing the GHG production efficiency.

Terminology: Reducing Emmissions Increasing GHG Production efficiency Linkages to Value chain finance

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Climate Finance meets Value chain Finance

How can climate finance increase value-chain growth and competitiveness and therefore contribute to value chain finance?Climate Finance can:• Identify areas in value chains were financing is a constraint• Build farmer financial knowledge while paying for environmental

services• Understand the opportunities and constraints in value chain

financing (e.g. policies, aggregation) as they are similar to each other

• Introduce a performance based-metric (Carbon) for farming quality

• Introduce a clear system for aggregation and monitoring of finance flows

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A guide to mitigation approaches

Two main approaches to mitigation planning in developing countries: Low Emission Development Strategies (LEDS)and Nationally Appropriate Mitigation Actions (NAMAs)

Policy, institutional and technical elements

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Climate finance

Climate Policy Initiative, 2013

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Climate finance - implications

Mitigation received the largest share of climate finance Public and private sector involvement are necessary Public finance should be used to leverage private investment Risks should be addressed

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Synergies adaptation & mitigation

Agricultural measures that: Reduce soil erosion; Reduce leaching; Conserve soil moisture; Increase crop rotations and diversity; Reduce temperature extremes, shelter; Reduce / avoid land use change.

Specific examples: Grazing management Integrated rice and livestock systems Agroforestry

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Development pathway of climate finance

1. Analysis of framework conditions and policy gaps Country sets overall policy goal:

2. National infrastructure is put in place: inventory, registry, approval and MRV procedures

3. Set of actions that reduce emissions below BAU and form part of NAMAs are identified

4. A concrete project or a whole sector NAMA applies for national approval and finance

7. National NAMA registry

Agriculture Livestock

National goal

Institutional & operational procedures

MRV system

Farmers

Financing vehicle

National public finance

Inter. Climate finance

Private climate finance

5. NAMA approved MRV system validated seeking finance

6. Project/NAMA financed and implemented

8. International NAMA registry

Farmers

Mitigation activities

NAM

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© UNIQUE forestry and land use GmbH

UNIQUE forestry and land use

Sectoral consulting firm with a focus on forestry and agriculture• 40 staff members• Regional offices in Africa in Uganda and Cameroon• Conducted more than 100 climate change and land use projects• Selected references:- Kenya Agricultural

Carbon Project (KACP)- Mainstreaming CSA- CAADP-Climate

adaptation best practicesin 7 countries

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UNIQUE forestry and land use GmbHSchnewlinstr. 1079098 Freiburg, GermanyTel: +49 - 761 20 85 34 - 0Fax: +49 - 761 20 85 34 - 10unique@unique-landuse.dewww.unique-landuse.de