Dive Brief:
- The World Bank Group will double its agricultural finance commitments to $9 billion per year by 2030, the international lending giant said Wednesday.
- The development bank will focus its financing efforts on addressing climate change, connecting farmers to digital platforms and de-risking the sector through better use of guarantees and insurance, according to Shobha Shetty, World Bank global director for agriculture.
- The announcement comes as the World Bank moves to overhaul its operating structure and President Ajay Banga looks to focus more on tackling climate change as a way to alleviate poverty.
Dive Insight:
The World Bank is pouring more money into agriculture as the multilateral development bank doubles down on a commitment to address climate change. The bank announced last December that it would devote 45% of annual financing to climate-related projects.
“We are combining a new way of working with a new level of investment” to address issues around food productivity, climate change and other “roadblocks” challenging agriculture stakeholders, Banga said during the lender’s annual meeting in Washington, D.C.
The World Bank will use its public and private sector divisions to further help countries develop farm-related regulations and work with producers to improve productivity and scale operations.
As an example, the bank said it can help governments repurpose around $1.25 trillion in fossil fuel, agriculture and fishery subsidies to incentivize climate action, unlocking “a significant source of financing for the agricultural sector.”
Banga also looks to make lending in agriculture more commercially viable through an expansion of de-risking tools such as credit guarantees, first-loss facilities and insurance instruments. There are also opportunities for the bank to advance climate-smart agriculture and digital tools that farmers use on a regular basis.
“Our strategic shift in agribusiness is aimed at unlocking the path to a brighter future — delivering quality of life and job opportunities,” Banga said.