The International Fund for Agricultural Development’s (IFAD) Inclusive Green Finance Initiative (IGREENFIN) Programme (hereafter, the “Programme”) is planned to be implemented across five countries of the Great Green Wall (Burkina Faso, Côte d’Ivoire, Ghana, Mali and Senegal). It is primarily funded by the Green Climate Fund (GCF) with IFAD as the Accredited Agency, and the Ministry of Economy and Finance for the Republic of Ghana, Burkina Faso, Côte d’Ivoire, Mali and Senegal shall be the National Executing Entities.
Accordingly, IFAD seeks to implement this flagship regional programme to build the resilience of agricultural and water resource management practices to current and future climate risks in the five target countries in the GGW by providing support to Local Public Development Banks (LPDBs), particularly agricultural banks, to create green credit lines and align their financial flows with the countries’ Nationally Determined Contributions (NDCs).
Over recent decades, climate change has increased droughts, water stress and soil erosion across much of West Africa, leading to a decrease in agricultural productivity and food security. Similarly, precipitation will continue to decrease, and temperatures are projected to increase by between 1 and 1.72˚C for 2031-2050 compared to the reference period 1986-2005 (Climate Analytics, 2019). Under such climate scenarios, agricultural production is expected to drop by at least 20 percent, which will reduce food availability and income from agricultural products.
The climate models of the IFAD Climate Adaptation in Rural Development Assessment Tool (CARD) indicate that production in the targeted countries will decrease. On average, millet production is projected to decrease by 10 percent; groundnut production by 11 percent, and rice production by 7.8 percent over the next 20 years. This will have devastating impacts on the millions of people who already experience high levels of food insecurity in these countries
Countries across the region are highly dependent on agriculture, which is extremely vulnerable to climate change. Most of the population are rural smallholders, with 70% depending directly on rainfed agriculture (crops, livestock and forestry), hence they are more vulnerable to climate risks such as drought, delayed rainy seasons and variable rainfall.
Objective of IGREENFIN
The main objective of IGREENFIN 1 and the Regional Support Programme (RSP) is to build and scale up the resilience and adaptive capacity of farmers’ organizations (FOs), cooperatives and micro, small and medium-sized enterprises (MSMEs) in Burkina Faso, Côte d’Ivoire, Ghana, Mali and Senegal by removing barriers to access to financial and non-financial services to accelerate the creation of a green financing market to promote the uptake of green agriculture practices and technologies.
Total Project Cost
The total Programme budget is capped at USD 250 million of which USD 180 million is GCF funding and USD 70 million is co-financing. The GCF programme will be complementary to the overall IFAD baseline investment in the selected countries. Current contributions from IFAD in form of grants amount to USD 30 million. However, IFAD PMUs’ contributions provided through the input of human resources, office structures and technical input will be counted as co-financing. Other contributions are also expected including the IFC contributions of USD 20 million and the one from AfDB of USD 15 million.
The loans will directly benefit 378,600 smallholder farmers organized around FOs, cooperatives, women and youth organizations and MSMEs and indirectly, over 2,494,000 people, of which 50 per cent will be women, 50 per cent youth, by increasing their climate resilience through affordable, long-term loans.
The Rural Enterprises Programme (REP) is part of Ghana Government’s efforts to reduce poverty and improve living conditions in the rural areas. It is an excellent example of the commitment of the Government of Ghana and development partners to scale up successful projects.