MICROCAPITAL BRIEF: World Bank Climate Investment Funds Disburse $15m to “Zambia Strengthening Climate Resilience” Project for Technical, Financial Support for Smallholder Farmers

The World Bank recently disbursed a total of USD 15 million in grant and debt funding via the Climate Investment Funds (CIF), a group of four funding vehicles addressing issues related to climate change, for the second phase of the Zambia Strengthening Climate Resilience project. The project was launched in 2013 to prepare businesses and farmers for the adverse effects of climate change, particularly in the country’s Southern Province and the province of Kazungula. This second phase of the project is intended to reach 167,000 smallholder farmers in these two provinces, with most of the money allocated to: (1) establishing a warehouse receipt system to help producers store rather than sell products when prices are low; and (2) issue grants to farmers to implement elements of “climate-smart agriculture,” which the World Bank describes as managing land to increase productivity without producing carbon emissions. Of the total budget, USD 3 million is set aside for market research relating to: (1) attracting private investors to the project; (2) creating business plans for farmers that align with climate-change preparation; and (3) selecting smallholder producers from whom to solicit grant proposals. USD 1 million is allocated for delivering information to smallholders about the risks associated with climate change and related market changes via mobile phone, television, radio and the internet.

Founded in 2008 with a focus on promoting business practices that minimize the emission of greenhouse gases and other environmentally-hazardous pollutants, CIF delivers grants, subsidized loans and risk-mitigation advice to enterprises operating in emerging economies. The funds are managed by the World Bank, and its financial products are delivered via development banks such as the Asian Development Bank (ADB), the African Development Bank (AfDB) and the International Bank for Reconstruction and Development (IBRD). CIF has 14 donor countries, which have contributed a total of approximately USD 8 billion since its inception.

In 2013, CIF began its Pilot Program for Climate Resilience (PPCR), a collection of smaller operations designed to help communities prepare for challenges induced by climate change. As of June 2018, PPCR has launched 58 projects in 28 countries and has raised funds totaling USD 1.2 billion.

The World Bank provides grants, loans and equity investments as well as technical support to entities based in middle- and low-income countries. As of June 2017, IBRD and the International Development Association (IDA) reported total assets of USD 406 billion and USD 197 billion, respectively. As of the same month, they reported outstanding loans of USD 177 billion and USD 138 billion, respectively. During the 12 months ending June 2017, IBRD disbursed USD 18 billion in new loans to 133 projects and IDA loaned USD 13 billion via 257 projects.

The World Bank Group is a multilateral organization whose goal is “to end extreme poverty and promote shared prosperity in a sustainable way.” As of 2018, it has 189 member nations. The group encompasses: (1) IBRD and IDA, which make up the World Bank; (2) the International Finance Corporation; (3) the Multilateral Investment Guarantee Agency; and (4) the International Centre for Settlement of Investment Disputes. During the 12 months ending June 2017, the World Bank Group disbursed funds totaling USD 44 billion.

By Nicholas Galimberti, Research Associate

Sources and Additional Resources

World Bank press release
http://www.worldbank.org/en/news/press-release/2018/06/19/zambia-world-bank-approves-146-million-to-link-smallholder-farmers-affected-by-climate-change-to-markets

Zambia Strengthening Climate Resilience Project background
http://projects.worldbank.org/P165442/?lang=en&tab=overview

Zambia Strengthening Climate Resilience Project detail
http://documents.worldbank.org/curated/en/163191529551835656/pdf/ZAMBIA-PAD-05302018.pdf

CIF background
https://www.climateinvestmentfunds.org/finances

PPCR factsheet
https://www.climateinvestmentfunds.org/sites/cif_enc/files/ppcr_factsheet_web.pdf

MicroCapital Brief; June 21, 2018; World Bank’s IDA Loans $50m to Kenya Industry and Entrepreneurship Project (KIEP) for Technical Support for Entrepreneurs; Seed Grants for SMEs
https://www.microcapital.org/microcapital-brief-world-banks-ida-loans-50m-to-kenya-industry-and-entrepreneurship-project-kiep-for-technical-support-for-entrepreneurs-seed-grants-for-smes/

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