Usulután

San Miguel

Cuscatlán

Sonsonate

La Libertad

San Salvador

Morazán

Ahuachapán

San Vicente

La Paz

Cabañas

La Unión

Santa Ana

Chalatenango

El Salvador

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To demonstrate that blended finance that reduces the cost and risk of climate lending enables FSPs to sustainably expand access to climate-resilient finance for vulnerable smallholder farmers and MSMEs.

Latin America and the Caribbean (LAC) is home to some of the world’s most important carbon-sink ecosystems and biodiversity hotspots. However, the region is also highly vulnerable to climate change. These climate pressures threaten ecosystems, rural livelihoods, and resource-dependent communities. While nature-based solutions are increasingly recognised as critical tools for climate mitigation and adaptation, investment in these approaches remains limited across the region. Rural small and medium enterprises (SMEs), which play a vital role in delivering nature-based solutions, face significant financing barriers.  Many SMEs and smallholder farmers lack the technical capacity and business skills to implement climate-resilient, nature-positive practices at scale.

This programme seeks to close this gap by providing tailored growth capital and technical assistance to rural SMEs working in nature-based solution value chains across Latin America and the Caribbean. Investments will focus on sectors such as sustainable and regenerative agriculture, agroforestry and sustainable forestry management, aquaculture, circular economy solutions, and ecotourism.

Alongside financing, the programme will deliver specialised technical assistance to strengthen business performance and support the adoption of climate and nature standards, certifications, and monitoring systems. Over a ten-year period, the initiative is expected to generate significant climate benefits, including an estimated reduction of 55.5 million tonnes of carbon dioxide equivalent, while supporting climate resilience for approximately 1.3 million people and promoting sustainable management across more than one million hectares of land.

This project was developed under the Project-specific Assessment Approach (PSAA).

Local CSOs and CBOs in landscapes-seascapes around the world access grant financing and technical assistance, including capacity development and knowledge sharing to maintain and enhance their socio-ecological resilience, well-being and socio-economic conditions for global environmental benefits.

In Latin America and the Caribbean, the vulnerability of small- and medium-sized enterprises (SMEs), smallholder farmers, women, and poor households in general is linked to their economic dependence on activities affected most by climate change.  They are also affected by their reliance on conventional and potentially harmful energy sources and limited capacity to invest in climate-smart technologies and practices.  

It is estimated that 95 per cent of the 15 million smallholder farmers in Latin American and Caribbean countries are already experiencing negative impacts from rising temperatures, unpredictable rainfall, extreme weather events, pest and disease incidence, and decreasing income generation and food security.  

Financial institutions can play a vital role in financing climate-smart agriculture (CSA) equipment to increase adaptation and promote mitigation. The Kuali Fund-GCF will invest in local financial service providers (FSPs), including small banks, microfinance institutions (MFIs), cooperatives, non-bank financial institutions, and FinTech companies, as well as innovative companies (ICs) that use technology to offer solutions to climate change mitigation and adaptation. The Kuali Fund-GCF will invest in Brazil, Colombia, El Salvador, Guatemala, Honduras, Mexico and Panama to transform the FSPs in their transition to become greener and more inclusive.

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