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OrganizationTiserin Capital Management Ltd
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CountryKenya
LanguageEnglish
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Year2021
Summary

ADAPTA.EARTH

Disrupting how capital assesses and manages climate change and sector risks is key to help producers adapt to climate change.  All support (i.e.; technology, capital, and capacity) given to farmers, while positive, hardly makes a dent on the actual need because access to finance remains the achilleas heel of the sector.  In Kenya, only 5% of total loans go to the sector.  The number in neighboring countries is worst.   A paradigm shift is required to transform the agriculture sector's risk-return profile and increase financing available for adaptation. Part of the solution lies in filling information gaps to support both the assessment and management of weather and climate risk in the sector. ADAPTA will become Africa’s first climate adaptation credit facility directed to the agriculture sector.  It seeks to transform the way lenders and investors assess the sector's risks by introducing weather and climate data, Ag-technologies, soil, and hydrology assessments, etc., to develop climate scores and adaptation plans that can help ADAPTA and other commercial banks make informed credit decisions and proactively manage agriculture portfolios for climate resilience.  The same way credit scoring algorithms transformed consumer and corporate finance globally, ADAPTA’s climate scoring algorithms, supported by these new technologies, may unlock millions of dollars for climate-smart agriculture.


In brief - What will we do? 

Tiserin Capital, One CGIAR, and USAID's Kenya Investment Mechanism (USAID-KIM) have joined forces to develop and launch ADAPTA, the region’s first climate adaptation credit facility directed to the agribusiness value chain.   This innovative credit facility seeks to strengthen producers’ and Agri-SMEs' financial standing and expansion plans but, just as importantly, enhance their climate resilience. ADAPTA plans to use an innovative structure that combines blended finance and a climate-smart model (CSM) to address adaptation finance barriers. A US$3Mn Phase I involves the following components, focused on development and testing of the climate-smart model, which will be central to a Phase 2 US$20Mn+ adaptation fund, and will become a global public good for wider benefit.  Phase I will target Kenya:

Component 1: Develop and test CSM with One CGIAR and other partners 

  1. Climate scorecard.
  2. Climate due diligence.
  3. Climate adaptation plan.
  4. Climate portfolio management.

Component 2: Structure ADAPTA's delivery models through three to six projects in collaboration with USAID Kenya-KIM.

Component 3: Test outcomes and develop recommendations.

  1. Test gender, SDGs, and climate-smart ag outcomes.
  2. Refine tools and recommendations for phase II.

Phase I will develop the CSM, support One CGIAR and TCA infrastructure, and test ADAPTA in 3-6 projects. Once tested, ADAPTA's CSM will be accessible to local commercial banks and investors to increase lending and investment into the agriculture supply chain. 



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