Kenya-led fund will finance climate resilience for farmers
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The International Fund for Agricultural Development (IFAD) and Equity Group launched the Africa Rural Climate Adaptation Finance Mechanism (ARCAFIM) in Kigali, Rwanda, to provide Sh25.9 billion to farmers and rural businesses in East Africa.
The 12-year program will operate in Kenya, Uganda, Tanzania, and Rwanda, offering financial support for investments that help communities cope with climate change. ARCAFIM will distribute approximately Sh23.3 billion as loans and Sh2.6 billion as technical assistance.
Equity Group will match funding from development partners with capital from its own resources, aiming to create a sustainable system of climate finance. The program intends to reach around 260,000 smallholder farmers and 500 rural businesses, prioritizing women, who are expected to make up at least half of the beneficiaries, and young people, who will account for 30 percent. Participating financial institutions will offer loans for projects like irrigation, water harvesting, resilient livestock, and renewable energy.
IFAD and Equity Group plan to expand ARCAFIM to other African regions, including Southern and West Africa, after initial implementation in East Africa, and expect the lending capital to generate around Sh34.5 billion in loans over four investment cycles.
