Jul 30 - 2nd Presentation Technical Assistance Facility V2.pptx

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1. Call-to-action AGRICULTURE and CLIMATE RESILIENCE Technical Assistance Facility for Large Scale Climate Action Projects Baskar Reddy and Simon Winter

2. 01 Climate Impact on Smallholder Agriculture Implications of climate change on smallholder farmers and current state of investments in climate adaptation 02 Challenges in Adaptation in Agriculture Smallholder View and Climate Financiers View 03 SACCA Concept - Goals and Ambitions Understanding the specific objectives and aspirations of SACCA in ensuring climate resilience among SHFs 04 Key Principles and Strategies Unveiling the fundamental principles and strategies employed by SACCA for sustainable agriculture transformation. 05 SACCA Use Cases Example of large-scale climate adaptation projects and how to unlock climate finance 06 Technical Assistance Facility Need for TAF and role of TAF in SACCA Projects and financial model of TAF Agenda Need for a Technical Assistance Facility

3. Heightened Risks Exposure to increased vulnerabilities due to climate change, affecting livelihoods and well-being Consequences Food security crises Poverty escalation Involuntary migration Decline of soil health and ecosystem biodiversity Disrupted supply chains Large scale devastation of fragile landscapes and water systems Climate Change Impact on Smallholder Agriculture and Investments Required CLIMATE VULNERABILITY Climate Adaptation Efforts Lagging Support for adapting to climate adaptation trails mitigation actions, with only USD 5.53 billion per annum allocated to smallholder adaptation. This severely hinders progress in building resilience. Climate Finance Developing countries require USD 2.3-2.5 trillion per year of climate finance by 2030 to meet climate goals. However, as of now only USD 20 billion is being invested in agriculture.

4. Fragmented smallholder producers 01 Fragmented smallholder producers hinder the scalability and impact of adaptation efforts. Need for behavior change among stakeholders 02 Reluctance (behavioral change) among farmers to invest in and adopt new technologies and services and diversify cropping. Transition costs and loss of income in some cases 03 Adoption of new technologies and practices would involve new investments and costs which smallholder farmers are unable to absorb on a purely commercial basis. Adaptation Challenges from Smallholders Point of View Adaptation Challenges from Climate Financiers Point of View Lack of Aggregation or Scalable Climate Innovation Bundles 01 Lack of orchestrators who can aggregate thousands of SHFs and individual climate smart technologies ( eg solar irrigation pumps) currently on offer. For scalability, climate smart bundles financed through large-scale adaptation projects are needed to cover risks. Lack of Investible Projects 02 Lack of scale projects and well-structured investible projects. Most projects are developed by project developers or NGOs and do not include system finance models at landscape level.

5. AGRICULTURAL TRANSFORMATION, CLIMATE RESILIENCE, SACCA Smallholder Action Coalition for Climate Adaptation in Agriculture (SACCA) Initiative to bridge gaps between Climate Innovations Delivery and Climate Finance

6. AGRICULTURAL TRANSFORMATION, CLIMATE RESILIENCE, SACCA Climate Finance Orchestrator Agri-Entrepreneurs Climate Innovation Organizations Smallholder Farmers First-Mile Delivery Organizations Global AE Academy/ First-Mile Orchestrator Climate Innovation Orchestrator Ag Production Products/Services Technical Assistance Debt/Loans/Equity Concessional Finance Financial Institutions* * Financial Institutions include climate financiers Core Pillars in SACCA Climate Innovations, Delivery and Climate Finance

7. Social Enterprise Funded through grants to set-up TAF and hire small team to develop SACCA projects Financial Sustainability Sustained by design grants from GCF and other climate funders, as well as success fee generated on unlocking blended finance Developing Investible Projects Success fee earned from developing projects, deploying innovations across different geographies and licensing digital assets Technical Assistance Facility Need for Orchestrators to Develop SACCA Projects Seed Fund to Kick Start

8. TAF Financial Model - Illustrative FINANCIAL PROJECTIONS Anchor grant 01 The initial $1.5 million annual grant for two years would provide stability and resources for the crucial first years of the TAF project, enabling foundational work and strategic investment. Annual revenues 02 Steady increase in revenues from $ 0.67 million in year 1 to $ 3.7 million by year 5. Cash at the end of the year 1 is $ 1.18 million and this increases to $ 6.5 million by the end of the year 5. Two major implications of this healthy cash in TAF : There is a room for undertaking more SACCA projects Even if 1-2 projects are not realized as per the projections, TAF will continue to be sustainable over the years Cash at the end of the Year 03 SACCA Technical Assistance Facility USD (000) Projected Financial Plan 2025 2026 2027 2028 2029 INCOME STATEMENT (P/l) Net revenues 675 1,380 2,110 2,894 3,708 Total Cost of Services 656 734 1,081 1,138 1,199 Gross Profit 19 646 1,029 1,756 2,509 Total expenses 363 392 540 563 664 Net Earnings (344) 254 489 1,194 1,845 BALANCE SHEET Total Current Assets 1,181 2,937 3,426 4,617 6,465 Total Liabilities Retained earnings (cumulative - includes rollover) (344) (90) 399 1,593 3,438 Funding from grants (cumulative) 1,530 3,030 3,030 3,030 3,030 Less: cum distribution to equity investors Total shareholders' equity 1,186 2,940 3,429 4,623 6,468 CASH FLOW STATEMENT Cash and cash equivalent - start of period 1,181 2,937 3,426 4,617 Net cash from operating activities (342) 257 493 1,198 1,849 Net cash from investing activities (7) (1) (4) (7) (1) Net cash used in financing activities 1,530 1,500 Cash and cash equivalents, end of period 1,181 2,937 3,426 4,617 6,465

9. Climate Investment Pipeline TAF will create a pipeline of 9-10 SACCA projects with a potential for unlocking USD 1-1.5 billion of climate finance Ensuring climate resilience for at least 5-7 million smallholders and accelerate the adoption of climate innovations Benefits of Funding TAF Need for Orchestrators to Develop SACCA Projects Playbook for Investible Projects New Partnerships Best Practices in Delivery and Innovations Launch a playbook and common operating system for developing asset class of agriculture climate adaptation projects Potential future partnerships with other investors, who would be part of the SACCA projects Best practices from SACCA Projects could be used by Climate Action Funders and Philanthropies in other climate investments that they make Climate Resilience among SHFs

10. Thank You Call for Action Please contact [email protected] or [email protected] if you are interested in partnering in SACCA TAF Join Now