Caspian Debt Introduces Credit Facility to Support Climate-Adaptation in Agriculture
26 July 2024, New Delhi: Caspian Debt (Caspian Impact Investments Private Limited) has launched an innovative loan product designed to boost resilience against the negative impacts of climate change. This first-of-its-kind credit facility is specifically tailored to enable Microfinance Institutions (MFIs) to fund climate-adaptive products in the agricultural sector.
In alignment with the Caspian Debt’s mission to enable the growth of companies that work towards creating social and environmental impact, this new financial product addresses the pressing challenges of climate change by promoting sustainable agricultural practices. The initiative aims to enhance the efficiency and accessibility of climate-resilient solutions, ensuring that farmers are better equipped to cope with the adverse effects of a changing climate. The credit facility is designed to support the financing of a variety of technological solutions which impart climate resilience in agriculture, including efficient irrigation systems, and other sustainable solutions for farming operations. Financing these innovations will contribute to ensuring food security and enhancing the economic stability of farmers.
Speaking on the announcement, Avishek Gupta, MD & CEO, Caspian Debt said, “We are thrilled to launch the credit facility that would help support climate-adaptation in agriculture. Through this programme, we hope to accelerate the adoption of technologies that will make agriculture more climate resilient. The programme aims to make climate-smart technologies accessible to farmers by partnering with microfinance institutions and technology providers with vetted products. The program adds depth to our track record in climate-smart financing by making such financing available at the grassroots.”
The foundation for this important step towards climate financing was laid by the preparatory work of Sustain Plus Energy Foundation (SPEF), the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and Sa Dhan. Under the umbrella of several Indo-German development cooperation projects commissioned by the Federal Ministry for Economic Cooperation and Development (BMZ), GIZ India and the National Bank for Agriculture and Rural Development (NABARD) have partnered with the Sustain Plus Energy Foundation and the Sa-Dhan Association to promote the uptake of technological solutions that bring climate resilience to agriculture. The financial intermediaries have started to grant loans to farmers for the purchase of financial products.
Shailendra Dwivedi, Director, Climate Change and Circular Economy, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) highlighted “Caspian Debt’s work on taking this partnership forward marks a milestone for climate adaptation financing. Through our joint efforts, we facilitate access to loans for farmers and enable them to implement innovative climate-friendly solutions. In this way, we are not only making an important contribution to climate change adaptation but also to improving farmers’ livelihoods. To expand this scope, we are currently working on extending financing opportunities for the greening of other sectors.”
Jiji Mammen, CEO & ED, Sa-Dhan shared “We are very happy to be part of this initiative with Caspian Debt to support climate-resilient agricultural products by extending a special line of credit. Earlier Sa-Dhan along with GIZ and Sustain Plus of Tata Trust had taken the initiative in extending awareness among MFI partners for the need to support climate-resilient agriculture in the country and also promoted a few technologies identified by Tata Trust. Now, the fourth pillar – Caspian Debt with a dedicated line of credit will further boost this initiative.”
Ganesh Neelam, Director, Sustain Plus Energy Foundation (SPEF) noted “Sustain Plus in partnership with GIZ and Sa-Dhan is working towards creating an environment for the Financial Institutions to lend to rural and tribal communities on the proven decentralized renewable energy technologies. These technologies are implemented at a certain scale with positive adoption and demand from the end users. The line of credit from Caspian debt gives a boost to the overall effort of enabling communities getting quality financial services. This will help many Financing Institutions to lend for proven energy and agriculture technologies, ultimately enhancing the livelihoods and quality of life of these communities.”
SPEF has previously established the working of the climate adaptive products in agriculture in several field trials and demonstrated the economic and adaptation benefits they bring. They have worked with small and marginal farmers through the integration of climate-smart agriculture and allied livelihood technologies to enhance their livelihoods and manage climate risks with a scale perspective. This has significantly increased the acceptance of climate-adaptive products among farmers. Building on the successful field trials, GIZ India has mapped out the framework, integrated the climate adaptive technologies and coordinated the dialogue with the financial institutions. Sa-Dhan Association’s extensive network in the microfinance sector has further contributed to the success by bringing in its experience to mobilise MFIs to offer loans and ensure that the loan product is well aligned with the needs of the agricultural community.
Besides this successful collaboration, GIZ India along with other partner organisations, such as the Syngenta Foundation India and FWWB India, has also been active in promoting the adoption of Decentralised Renewable Energy technologies for financing. These technologies are an integral part of the technological solutions for which the line of credit is being extended.
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