Kyiv, Ukraine, March 16, 2021 — Ukrainian farmers are set to benefit from a new project designed to boost climate-smart agriculture in the country. An advisory initiative of IFC, a member of the World Bank Group, will be implemented in partnership with the Austrian Federal Ministry of Finance.
IFC will advise financial institutions on how to develop new green finance products and services for agricultural producers. The targeted financing will enable them to adopt climate-smart practices and technologies to increase productivity and revenues, while also helping the country tackle climate change. IFC's Country Private Sector Diagnostic estimates that with $3 billion of investment in climate-smart agriculture technologies, Ukrainian agricultural producers of grains and oilseeds could increase annual revenues by $11 billion.
Investments can also help reduce significant greenhouse-gas emissions annually equivalent to 11 metric tons of carbon dioxide. This is important because climate change poses a threat to Ukraine's agricultural production, at a time of rising demand for agricultural products globally, While large agricultural producers have already adopted climate-smart practices in crops, livestock, forestry, and fisheries, smaller producers are unable to afford new technologies due to limited access to finance. To address this, IFC—through its four-year Climate Smart Agriculture Finance Project—will work with the government to equip local financial institutions with the necessary tools and knowledge to introduce climate-smart finance solutions, including loans and advisory support.
"Climate change mitigation and adaptation measures are important for keeping current levels of production and increasing agricultural productivity and food security, incomes, and welfare of rural farmers," said Gernot Pfandler, Austrian Ambassador to Ukraine. "Expanded access to climate-smart finance for agricultural producers will catalyze innovative transformation of the farming sector and support economic growth."
IFC will help develop a carbon accounting system to help agricultural producers monetize their greenhouse-gas reductions. A robust system, comprising metrics and climate-smart agriculture standards, will contribute to a conducive environment, promoting green bonds and niche securitization in Ukraine.
"One of IFC's strategic priorities in Ukraine is to strengthen the nation's agriculture sector, including facilitating easier access to financial resources for agricultural producers," said Jason Pellmar, IFC's Regional Manager for Ukraine, Belarus and Moldova. "IFC's new project will help agricultural companies to adopt sustainable practices. This program will contribute to the sector's resilience, unlocking the industry's potential in the global market and accelerating economic recovery in the post-pandemic period."
The efforts are part of the Europe and Central Asia Climate-Smart Finance Facilitation Program which aims to help increase the availability of agricultural finance in emerging markets, supporting countries in their efforts to tackle climate change.
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.
For more information about the Austrian Federal Ministry of Finance, visit: http://english.bmf.gv.at