Africa Rural Climate Adaptation Finance Mechanism (ARCAFIM) for East Africa region

In East Africa, climate models predict a continual rise in average temperatures and an increase in the frequency and intensity of heavy rainfall events. This places significant pressure on the region's farmers, as they will grapple with worsening conditions for crop production and livestock keeping. However, progress in developing more sustainable agricultural processes has been slow, as farmers in Kenya, Uganda, Tanzania, and Rwanda lack access to the necessary funding for Climate Change Adaptation (CCA) investments. There is an urgent need for private sector CCA finance to spearhead long-term, market-driven change.   The ARCAFIM programme strives to introduce a practical and widely applicable financing model to mobilise private sector investments for rural CCA initiatives in East African micro, small, and medium-sized enterprises (MSMEs) and smallholders involved in the food systems. These MSMEs and smallholders have the potential to drive sustainable, long-term changes in response to market needs. The programme supports climate adaptation for smallholders and MSME by crowding in international and local financing, including from regional commercial banks and local financial institutions. The programme model can serve as proof-of-concept to be replicated in other regions, offering potential to make a significant impact on private sector financing for rural CCA projects on a broader scale.