Ahead of global climate talks, public development banks join forces to boost food system investments
Responding to an urgent call to increase financing for the world’s poorest farmers who are hardest hit by climate change, a group of Public Development Banks (PDBs) stepped up their commitment to accelerate green investments in agriculture during today’s Finance in Common Summit. The announcement comes less than two weeks before world leaders will gather for COP26 climate negotiations in Glasgow.
Led by the International Fund for Agricultural Development (IFAD), in partnership with Agence Française de Développement (AFD) and Cassa Depositi e Prestiti (CDP), a group of PDBs from across the globe today announced the launch of a platform to speed up greener and more inclusive investments in agriculture and the processing, packaging and transport activities that occur from the farm gates to the plates.
“With investments accounting for almost two-thirds of formal financing for agriculture, PDBs can have a huge impact on the lives of rural populations, and ensure the uptake of greener agricultural practices that also help small-scale farmers’ adapt to climate change and earn better incomes,” said Gilbert F. Houngbo, President of IFAD. “The platform is an important concrete step to achieve the desired change.”
The Platform for Green and Inclusive Food Systems was announced at the start of the two-day Summit which brings together representatives from governments, PDBs, international financial institutions, private companies, civil society leaders and farmers organizations. It will support PDBs to strengthen their capacities to redirect and scale up their investments to promote greener and more inclusive food systems, thereby better aligning with, and contributing to, the 2015 Paris Agreement and Sustainable Development Goals.
PDBs are financial institutions controlled or supported by central or local governments that aim to promote economic development in a country or region. While they are very diverse in size and practices, many need support to improve governance and capacities, to better target green investments and track environmental and social impact, and to assess the relevant risks while remaining financially sustainable.
In addition, many PDBs need to develop innovative instruments to attract private investors to the agricultural sector and create financial services better tailored to the needs of rural producers and small-and-medium sized businesses.
To address these needs, the platform will deliver services such as technical assistance, expertise sharing, and tools to measure the social and environmental impact of investments and to better assess risks. It will also provide support to improve the use of existing resources of PDBs and de-risking solutions.
This builds on the work of a group of PDBs convened by IFAD in November 2020 which agreed to join forces to help transform food systems and the setup of the Coalition of Action for Inclusive and Sustainable Food Systems Finance. The importance of this work was recognised at the UN Food Systems Summit in September, which encouraged the formation of a coalition of partners to develop the platform, and by the G20 foreign affairs and development ministers in the Matera Declaration in June.
This article was originally published by IFAD.