Africa’s first climate adaptation credit facility for agriculture, ADAPTA, has launched in Kenya with $1.5 million (KSh165 million) funding from the Bill & Melinda Gates Foundation for Phase I.

ADAPTA will develop and test an innovative loan underwriting platform that incorporates agricultural technologies and climate-smart agriculture.

Working closely with the Alliance of Bioversity International and CIAT and its flagship climate project for Africa (AICCRA), ADAPTA’s Phase I will focus on developing and testing a Climate-Smart Module (CSM) and an agriculture risk management framework to address adaptation finance barriers proactively. 

The CSM will leverage satellite-derived and other data sets on vegetation, soils, hydrology, climate, energy, and water efficiency, including social and gender dimensions, to assess risk and identify adaptation options within value chains

“We are excited to partner with Gates Foundation in supporting our vision to help the small producers and Agri-SMEs on the front lines of climate change,” said German Vegarra ADAPTA’s Principal in an emailed statement.

With less than 5 per cent of total lending going to the agriculture sector, the potential to apply and scale climate-smart agriculture technologies to deepen climate resilience is limited.

This even as climate change is predicted to affect sectors such as the tea sector which would affect more than 500,000 small-scale farmers due to rising temperatures, drought and frosts among others.

ADAPTA will leverage various approaches to transform how banks and investors assess agricultural risk to unlock financing for farmers and agri-SMEs.

ADAPTA is also partnering with USAID’s Kenya Investment Mechanism to mobilise local financial advisors and strengthen their sustainable finance expertise, a service in great demand.

“We hope ADAPTA’s CSM can transform sustainable finance the same way credit scores and credit ratings transformed consumer and corporate finance,” ADAPTA’s Principal, German Vegarra said. 

“Unless we mobilize large pools of capital for climate adaptation, we will not reach the small producers and Agri-SMEs that are on the front lines of climate change and will be hit the hardest.”

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