Blog Financing Agriculture's Adaptation to a Warming World
Pedro Chilambe is a Climate Risk Management Specialist, and leads the research team for Climate Finance and Digital Agriculture Services at the Alliance of Bioversity International and CIAT. His work focuses on supporting African governments to access funds for capacity building, as well as developing climate finance proposals to build agricultural resilience in East and Southern Africa.
Pedro Chilambe didn’t start out working on climate change. “I was on the other side”, he laughs, speaking of his first degree in petroleum engineering. However, the Mozambiquan scientist grew up in a diplomatic family living all over the world, and one of their postings, in Malawi, left a particularly deep impression on him. “The culture there revolves around farming, especially maize farming”, he says. “Everyone has a maize field, even in the middle of the city. That’s the first time I began to understand how important agriculture was to people’s lives.”
Since then, Chilambe has combined this appreciation for agriculture with a long-standing interest in finance to craft a career centered around harnessing the power of climate financing to improve the lives of Africa’s smallholder farmers. This has included working with the World Food Programme to launch Mozambique’s first Green Climate Fund project, and developing an agricultural risk financing tool in Angola. In Zambia, Chilambe worked on a TV show called Munda Makeover, using entertainment to teach farmers about financial literacy and climate-smart agricultural practices. “The number of innovations in the climate space really pulled me in”, he says. “It’s been a great experience.”
Now with the CGIAR Initiative on Climate Resilience (ClimBeR), Chilambe’s role is to help African governments access 30 million USD earmarked for climate adaptation by developing climate-smart agricultural investment plans. These plans identify specific business models and projects that would help mitigate climate risk and promote adaptation within a specific country’s agricultural value chains. They then build an investment case and implementation plan designed to attract sustainable investment from both the public and private sectors.
Investment plans like these create an enabling environment to bridge the gap between local projects and investors, explains Chilambe, helping expand access to tools and technologies with the potential to make farmers more resilient to rising temperatures. One example is hermetic bags for long-term grain storage, a business idea which, with further investment, would decrease post-harvest loss, provide a more stable food supply, and even help farmers leverage their stored grain to access finance: “These investment packages give farmers access to things that help them become more resilient”, he says. “Rather than it being a government project or humanitarian activity, it turns into something banks can invest in. The private sector can then take it up as a business, which helps this kind of technology become more sustainable in the long run.”
Chilambe is currently developing a climate credit scoring tool with a fintech called Lend XS. The tool aims to evaluate the climate hazards and adaptive capacity of farmers, allowing financial institutions to better evaluate the risks of agricultural loans and ultimately giving better-adapted farmers more access to finance. Chilambe explains that this should incentivize farmers to adopt climate-smart practices, while giving lenders the information they need to make informed decisions about the sector and price their products more realistically.
One important consideration for any climate change adaptation project is its transboundary implications, a major focus of climate security investment planning: “This is something a lot of climate finance projects have not addressed – the way in which an adaptation in one country might lead to maladaptation in its neighbor”, says Chilambe. One example is a dam, which might lead to one community receiving more water while another across the border receives less. This can result in migration, and often conflict. Chilambe and his team are currently working on proposals targeting the Karamoja cluster between Uganda, South Sudan and Ethiopia, where migration between climate-vulnerable communities has often led to violence.
“There’s lots of migration due to climate change, so this is going to be very important to tackle”, he explains. “You have to design projects in a way that will benefit more communities, and if there is a community that will be receiving migrants, you have to be sure there is development in place to host them.”
Equally important is ensuring that as many of these projects as possible are led by national and local governments.
“I’m very in favor of locally-led climate adaptation” Chilambe emphasizes. “At the end of the day, local governments need to have absolute ownership over these projects, and we need to provide support for them to be able to access these funds on their own. Government has the widest network you could ever use to reach farmers; if they can create business models that give them direct access to finance and implementation, that would bring a lot of value to farmers, SMEs, and local government structures that are driving climate adaptation.”
“The important thing is that people living through the challenges of climate change are the ones providing these solutions”, he adds. “That is what we’re financing.”
