Climate Finance Facility Opens for Smallholder Farmers

New Climate Financing Facility Launches to Support Smallholder Farmers

A major new climate financing initiative has opened its doors to smallholder farmers worldwide, offering a comprehensive package of loans, grants, and technical assistance designed to help agricultural communities build climate resilience while adopting sustainable practices. The Catalytic Climate Finance Facility (CC Facility), a partnership between Climate Policy Initiative and Convergence, has launched its fourth call for applications with a specific focus on sustainable agriculture in sub-Saharan Africa and South Asia.

Comprehensive Support Package

The facility provides up to $500,000 USD in grant funding per selected project, along with tailored technical assistance over 12-18 months. This support aims to help early-stage and market-ready blended finance vehicles scale their operations and mobilize private capital for climate action. 'This facility represents a crucial step in bridging the climate finance gap for smallholder farmers who are on the front lines of climate change,' said Dr. Sarah Chen, Director of Climate Finance at Climate Policy Initiative. 'By providing both financial resources and technical expertise, we're empowering agricultural communities to implement climate-smart practices that enhance resilience and productivity.'

Smallholder farms, defined as small-scale agricultural operations typically supporting single families, represent an estimated 500 million farms in developing countries alone, supporting nearly two billion people globally. These farms face disproportionate climate risks despite contributing significantly to global food production, particularly for crops like cocoa (90% grown by smallholders), coffee, and palm oil.

Targeted Agricultural Solutions

The CC Facility's current funding cycle specifically targets sustainable agriculture solutions that demonstrate catalytic potential, financial sustainability, gender responsiveness, and local capacity building. Eligible initiatives include climate-resilient farming practices, regenerative agriculture, soil health improvement, water conservation systems, and renewable energy integration for agricultural operations.

'Smallholder farmers have been historically underserved by traditional financial systems,' noted Michael Rodriguez, a senior agricultural finance specialist. 'This facility addresses multiple barriers simultaneously - providing capital for climate adaptation while building technical capacity and creating pathways to scale successful models.'

Application Process and Timeline

The application deadline for the current funding round is April 24, 2025, with a three-stage selection process that includes concept note submission, full application development, and due diligence review. Successful applicants will receive not only financial support but also access to networks, expertise, and knowledge-sharing platforms to accelerate their climate solutions.

To date, the CC Facility has awarded over $6.39 million to 17 blended climate finance structures globally, supporting initiatives across Asia-Pacific, Sub-Saharan Africa, Latin America, and South Asia. These projects collectively target $100 million in catalytic donor capital mobilization.

Complementary Programs and Global Context

This initiative comes alongside other climate-smart agricultural financing programs, including the USDA's Climate-Smart Agriculture and Farm Loan Programs which offer loans up to $1.8 million for American farmers adopting sustainable practices. However, the CC Facility specifically focuses on developing economies where smallholder farmers face the greatest climate vulnerabilities.

The facility's approach aligns with Sustainable Development Goal 2 (Zero Hunger) and specifically targets indicator 2.3, which measures the productivity and incomes of small-scale food producers. By supporting climate-resilient agriculture, the program also contributes to climate change mitigation efforts, as sustainable intensification for smallholders has been identified by Project Drawdown as an important method for reducing greenhouse gas emissions.

'What makes this facility unique is its blended finance approach,' explained Maria Gonzalez, Convergence's Program Director. 'We're not just providing grants - we're building financial structures that can attract private investment, creating sustainable funding models that can be replicated across different regions and agricultural systems.'

As climate change continues to threaten global food security, initiatives like the CC Facility represent critical interventions to support the agricultural communities most vulnerable to changing weather patterns, water scarcity, and extreme climate events. The success of these programs could determine whether smallholder farmers can adapt to climate challenges while maintaining their livelihoods and contributing to global food systems.