Options for Increased Private Sector Participation in Resilience Investment

Abstract

How is this report structured?This report is organized in six chapters as follows:Chapter 1. Climate and Natural Hazards Resilience. This chapter contains a brief overview of climate and natural hazards disasters and risk, as well as a definition of adaptation and resilience. After reviewing existing literature on funding needs and funding gaps, this chapter briefly discusses the most notable global trend in private sector adaptation finance.Chapter 2. Resilience Market Segmentation. This chapter contains a high-level analysis of the resilience impact and potential for commercial investment in four economic sectors -water, agriculture, transport, and energy, covering both infrastructure and value chains.Chapter 3. Agriculture Resilience In-Depth Analysis. This chapter discusses the resilience relevance of the agriculture sector, and further analyses potential and investment barriers associated with resilience investment in agricultural infrastructure, and along the main link of the agriculture value chain.Chapter 4 -Resilience investors landscape and investment tools. This chapter provides an overview of agri-resilience investors, focusing on private sector finance. It also contains an analysis of financing tools that are usually associated with climate finance, and adaptation finance.Chapter 5. Resilient agricultural infrastructure: the irrigation PPP facilitation program. After reviewing the rational for investing in irrigation infrastructure, this chapter analyzes the current investors' landscape, identifies issues that affect private sector participation, and proposes an integrate lifecycle financing approach.Chapter 6 -Resilient value chains: early stage and PE/VC in agri-resilience. This chapter focuses on agriculture resilience in Asia, through the review of market structure, institutional environment, climate impact, and investors' landscape, and potential investment themes in three pilot countries -China, Myanmar, and Vietnam. A hybrid capital fund is suggested as efficient and scalable way to attract private sector funding to agri-resilience. Why blended finance could increase private sector funding to adaptation in the agriculture sector?Many adaptation projects in the agriculture sector have some form of viability gaps. Many agriculture resilience projects that could be commercial end up not being financed for a variety of reasons, including: i) the true value of an adaptation investment is often not captured by financial markets, particularly when part of the benefit of the investment accrue to interest groups beyond the investor (positive externalities or investment co-benefits). For example, investing in precision agriculture generates co-benefits like food security, rural development, and climate mitigation but agricultural producers and their financiers are not reworded for this service; ii) shareholders and financial markets often value short term gains, which means that there is a shortage of financing for investments that are required to cope with long-term or distant climate impacts. iii) the...

An Assessment of Low-Cost Tractor Motorization with Main Farming Implements

“…Tractors represent the largest segment of the agricultural machinery industry and play a central role in the mechanization of agriculture [5]. Global annual tractor sales are estimated at approximately 1.8 million units, with a sales volume of USD 45 billion in 2017 [6].…”