Small to Medium Enterprises (SMEs) in the agricultural sector will this year have access to funding after the Dutch Entrepreneurial Development Bank FMO approves $50 million, targets green and climate adaptation projects.
The facility is intended to enable FNB Zambia to expand its long-term financing offer for green projects and climate adaptation initiatives.
Sixty percent of the amount will be allocated to eligible green projects, while the remaining 40 percent will be directed toward climate adaptation investments, with a focus on small scale farmers.
According to FMO, the initiative responds to growing demand for solar solutions and climate-resilient investments, in a context marked by recurring electricity shortages and increasingly challenging climate conditions for agriculture.
In addition to the credit facility, FMO announced the mobilization of $350,000 in technical assistance.
In addition, the support will be provided by WWF Zambia, a partner of the Dutch Fund for Climate and Development.
The assistance aims to support FNB Zambia in setting up a framework to assess climate mitigation and adaptation projects, strengthening the bank’s capacity to identify, analyze, and finance projects aligned with climate objectives.
Researchers have identified vulnerability to climate change during the 2023–2024 drought, which severely affected the country’s power system.
On the other hand, the Food and Agriculture Organization of the United Nations (FAO), through the Sustainable and Inclusive Food Systems for Zambia (SIFAZ) Project, has launched the Matching Grant Facility (MGF) to support the commercialization of smallholder farmers, cooperatives and agribusinesses across Zambia.
The Matching Grant Facility is an open and competitive funding opportunity available to SIFAZ-supported farmer cooperatives, individual smallholder farmers, and small and medium enterprises (SMEs) in proven partnerships with SIFAZ cooperatives. The initiative aims to strengthen sustainable intensification practices and improve access to markets and agribusiness services.
In an analysis published in September 2024, Action Against Hunger said the drought, the worst Zambia has experienced in 40 years, had pushed 6.6 million people into urgent humanitarian need, with 80 percent of provinces affected by severe rainfall deficits.
Despite not securing a phase-out of fossil fuels, COP28 witnessed a historic focus on food. The summit saw over $7 billion in funding commitments, as well as a pledge by 152 countries to include food and agriculture in their climate plans.
In addition, the analyst has highlighted that there is no doubt that commercial agriculture is a major contributor to the climate crisis, responsible for around a third of global greenhouse gas emissions, according to Greenpeace.
This includes emissions from land use change, on-farm production, processing, transport, packaging, and retail. With the world’s population expected to reach 9.7 billion by 2050, issues around food security and environmental impact are only likely to escalate.
While funding commitments for climate-smart agriculture at COP28 offers a glimmer of hope, it remains to be seen how much of it will materialize.
Right now the heatwaves, floods, and droughts are no longer distant warnings, but a lived experience for millions of people.
