The International Fund for Agricultural Development (IFAD) has announced a Climate Adaptation Bond aimed at supporting sustainable development and climate resilience projects in rural communities across developing countries, as small-scale farmers continue to receive a limited share of global climate financing.
The bond was announced by IFAD President Dr. Alvaro Lario at a COP31 event organised in partnership with the OPEC Fund for International Development, focusing on mobilising investment for climate adaptation in vulnerable rural economies.
The initiative comes as small-scale farmers face growing exposure to climate change, despite receiving only a small proportion of available climate finance.
The event, titled “Financing Adaptation at Scale: Mobilizing Capital for Climate Adaptation,” examined how capital markets, public and multilateral financing, and catalytic capital could work together to increase investment in climate adaptation.
IFAD said the bond is expected to support sustainable development projects in rural areas of developing countries, including initiatives to strengthen the ability of small-scale farmers to adapt to climate change.
Opening the event, Musab Alomar, OPEC Fund Vice President for Strategy, delivered welcoming remarks before representatives of development finance institutions and investment organisations joined discussions on expanding adaptation financing.
Participants included senior representatives from the Adaptation Fund, European Investment Bank, Incofin, Inter-American Development Bank, Rockefeller Foundation and Black Sea Trade and Development Bank.
The discussions focused on how different sources of capital could complement one another to attract more investment into climate adaptation and strengthen the resilience of rural communities.
Leslie Maasdorp, Chief Executive Officer of British International Investment, delivered the closing remarks. The discussions also noted the need for stronger partnerships between development finance institutions, private investors and other financing partners to channel more capital towards climate adaptation.
For small-scale farmers, access to climate adaptation financing remains important as they face the effects of climate change on agricultural production and rural livelihoods.
The announcement of IFAD’s Climate Adaptation Bond adds a capital markets instrument to discussions on expanding financing for rural development and climate resilience in developing countries.
