Complementary partnerships to finance profitable enterprises in the catalytic area: mutual business partnerships between financers, technology suppliers (clean energy & EBA) and advisory service providers are resulting in financing products targeted at enterprises based on the catalytic area of EBA-driven agriculture and clean energy agro-value addition. As a result, indirectly finance up scaling Ecosystem based adaptation driven agriculture  and clean energy

For example, in Kenya, A local micro-finance institution - Rafiki Bank was provided with technical guidance  on how to integrate climate action solutions of clean energy and EBA as part of their credit portfolio to their farming clients across the entire agro-value chain. EBA was taken based on published science that it lowers crop failure risk and hence EBA is a risk averter. Clean energy, specifically solar dryer financing, was integrated as an affordable value addition solution that is not capital intensive, hence carries a low financial risk but which can increase farmer earnings through value addition. Through this financing products, climate action solutions of solar dryers and EBA inputs are set to be financed at below-market interest rates – where while market rates are at over 15%, the de-risking provided by EBA crop failure mitigation and low financing risk of solar dryers, the de-risking provided by EBA crop failure mitigation and low financing risk of solar dryers, has brought the interest down to 8%. The facility is open to start-ups where they have 100% coverage and actors who may not have enough collateral, as well as established enterprises. Over 100 agro-value chain actors have been engaged and the number is growing, with financing covering both individual and cooperate actors.    These are spread in over 10 counties in Kenya.

Risk sharing facilities: private sector lending to the catalytic sectors remains underdeveloped due to perceived high risk. To remedy this, risk sharing facilities that cover key risk factors of climate risk (driven by climate change induced crop failure) and financial risk (driven by repayment defaults) can be implemented.

For example, county governments that are legislating creation of climate change funds to domestically finance resilience building efforts can leverage the climate change fund for additional private sector financing to capitalize the catalytic area by investing in EBA risk-sharing facilities. The funds can set aside 50% of the portfolio so it can securitize up to 10times this amount in private banks. These securitized monies will be loaned to entrepreneurs engaged in actions that optimize the agro-value chain using EBA and clean energy. Hence indirectly finance up scaling EBA-Driven Agriculture and clean energy agro-value addition to create multiple low carbon, higher order income & job opportunities.  This facility covers both climate risk through use of climate risk mitigating EBA approaches & financial risk through the cash deposit to cover defaults.