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Scaling up private sector climate actions in agriculture
The document discusses the importance of engaging with the private sector in climate actions, highlighting public-private partnerships, impact investments, and blended finance. It emphasizes the need for better connectivity between official development assistance and other financing sources to maximize development impact. Additionally, it outlines the benefits and risks of working with private companies, as well as the Tropical Landscape Finance Facility launched to support renewable energy and landscape transformation investments.
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Scaling up private sector climate actions in agriculture
- 2. Engaging with thePrivate Sector Tony Simons, ICRAF, Kenya Agriculture Advantage, 13 Nov 2017 UNFCCC COP23, Bonn Public-Private Partnerships, Impact Investments and Blended Finance – increased scope for scaling up climate actions
- 3. Public Goods Private Bads PrivateGoods Public Bads We need to be smarter at linking public goods with private interests
- 4. ODA is notDevelopment …… $3 in remittances $6 in FDI $24 in domestic private sector spend $35 in developing country Government spending For every $1 in ODA, there is: ODA may remain largest revenue stream for some but we need to better connect it to other finance sources
- 5. • Access toinformation: greater understanding of the issues (allowed in the business conversations) • Access to expertise and networks: complementary skills to our own • Fitness for purpose: creating more appropriate products and services • Cost-sharing/reduction: avoiding duplication, leveraging joint investments • New paradigms/models: developing novel approaches for complex challenges • Upskilling staff: enhancing competencies and skills in our staff • Accelerating impact: scaling up and out • Reflected glory: partnering with credible businesses Benefits of engaging with the Private Sector
- 6. Risks of thePrivate Sector? - Reputation risks of partnering with a questionable company - Uncertainty of the company motives - Conflicts of interest - Upfront losses for longer term pay-off (may not arrive) - Suspicions from other partners - Bankruptcy of company (non-delivery, risks to farmers)
- 8. Tropical Landscape FinanceFacility (Indonesia) • Launched 26 October 2016 • $1 billion Loan Fund coupled with matching Grant Fund • Main investors BNP Paribas, USA, ADM • Domiciled in Hong Kong (ADM Capital) • TLFF Secretariat in Jakarta (ICRAF/UNEP) • Eligibility: Renewable Energy & Landscape Transformations • Evidence-based investments, shared risks, technical support
- 9. Smallholder Farmers Credit Equity Govt SMLE, Coop Local NGO INGO, IARC Micro- finance premium, levy, tax, revolvingfund Converters: Money into 5 Capitals Offtakers: Harvest dividend of 5 capitals Buyers Aggregators Processors Society Repayers: FARMERS Technical, social, admin, policy, financial, input support Performance based, conditional incentives Goods & Services (5 Capitals) Transformers: 5 Capitals as inputs Produce: 5 Capitals Value-added Various Finance Blending Options Available Grants
- 10. Financing at LandscapeScaleFinancing at Landscape Scale Grant Financiers We have so many viable project ideas ….. but so little finance Credit Financiers We have so much ready finance ….. but so few viable projects
- 11. Engaging with thePrivate Sector Tony Simons, ICRAF, Kenya Agriculture Advantage, 13 Nov 2017 UNFCCC COP23, Bonn Public-Private Partnerships, Impact Investments and Blended Finance – increased scope for scaling up climate actions