Climate-Smart Agriculture (CSA) Risk Sharing Mechanism Project for MSMEs

The project is designed to support micro, small and medium-sized enterprises (MSMEs) in Guatemala and Mexico through the implementation of climate-smart agricultural practices. This project focuses on the creation of a risk-sharing facility that will unlock innovative and scalable financial instruments for investments in agriculture and agroforestry. The main objective is to provide guarantees, equity investments and technical assistance to these companies, facilitating access to long-term loans necessary to make investments in sustainable agriculture and climate change adaptation practices. The project is expected to contribute to the mitigation of CO2 emissions and improve the resilience of rural communities, directly benefiting more than 800,000 people. The project addresses the difficulties faced by MSMEs in securing financing for climate-smart agriculture projects, due to the lack of adequate financial products from financial intermediaries. Through a combination of financing from the IDB Group, the Green Climate Fund (GCF), and partner funds, the project is expected to support the implementation of drip irrigation systems, resistant seed substitution, crop diversification, and other climate change adaptation activities.