TheMastercard Foundation Fund for Resilience and Prosperity recently participated in COP28 within the Blue and Green Zones.
Which were hosted by the UNFCCC and the Climate Action Innovation Zone hosted by Climate Action. The events took place between 4 - 8 December 2023 in Dubai, United Arab Emirates. This was the third consecutive year where the Climate Action Innovation Zone ran alongside COP with an aim of mobilizing the innovation ecosystem to facilitate concrete climate action at this COP28. The Flagship Forums of the Climate Action Innovation Zone included the Sustainable Innovation Forum, Sustainable Finance Forum, UK Climate Action Forum, Hydrogen Transition Summit and the Agri-Food Systems Summit.
The Fund Engagement Partner Smita Sanghrajka was a panelist in the Estonian pavilion on the Blue Zone in a panel titled ‘Unlocking Billions: Private Capital's Role and Opportunities in Africa's Climate Resilience Revolution’ hosted by 1MTN . Smita participated alongside Nassima Sadar-Gravier, Obama Leader and CEO of AfroClimate and Sheri Hickok, CEO of Climate Impact Partners . The panel was moderated by Kristjan Raude, co-founder and CEO of 1MTN. The discussion focused on how Africa can increase climate finance from the private sector through innovative investment instruments delivering both impact and compelling risk-reward ratios in the nature-based solutions landscape.
Smita noted that the private sector’s contribution to climate finance flows in Africa had been low due to the real or perceived elevated risk of investment and the subsequent expected low returns. She noted some the key factors that increase the risk for private sector investment in Africa such as the sustainability of investment, weak policies, institutions and regulatory frameworks on land administration and technical capacity gaps.
Regarding de-risking the climate space in Africa, Smita noted that challenge funds as a de-risking tool, provide an opportunity for early-stage finance for climate innovation: laying the foundation for other funding instruments such as loans and equity at the scaling phase of the innovative ideas for SMEs i.e., blended finance. In addition, she highlighted that challenge funds that are set up with a ‘matching fund’ element ensure that recipient organizations - co-invest in their business to ensure risks are shared and incentives are aligned. She also mentioned that the Mastercard Foundation Fund for Resilience and Prosperity technical assistance as one intervention in support of funding instruments. She explained that this builds the capacity of players in the space leading to development of feasible projects that can attract private investment.
During the Agri-Food Systems Summit at the Climate Action Innovation Zone, Smita also represented the Fund on a panel titled ‘Upscaling appropriate funding mechanisms for sustainable agri-food systems’. Her fellow panelists included Lifeng Li, Director of Land and Water Division, FAO , Jiunn Shih, Chief Marketing, Innovation and Sustainability Officer, Zespri and Natalya Zhukova, Director, Head of Agribusiness, EBRD . The panel discussion was moderated by Peter Elwin, Director, Head of Food and Land Use Programme, Planet Tracker . The panel unpacked ways to harness innovative investment mechanisms to ensure transformation of agri-food systems. They noted private-sector investment is required to close the funding gap on agri-food systems and to efficiently channel investment. During the discussion, Smita highlighted that climate finance flows to agri-food systems can be upscaled through de-risking parts of the sector to increase the flow of private investment.
Smita highlighted the role of grant funding, which will be part of the financial support offered by the Fund, in providing an opportunity for early-stage financing for innovative projects within the agri-food systems space which allows entities to endure the long timelines and high costs associated with developing new projects. In turn, she noted that this lays the foundation for other funding instruments such as loans and equity at the scaling phase of the innovative ideas for SMEs and reduces the level of risk associated with investment in the agri-food systems space increasing local and international private finance flows. She also highlighted the importance of technical assistance as a tool for de-risking agri-food systems and encouraging private sector investment.
Within the Climate Action Innovation Zone, the Fund Program Director Grace Mberia had an interview where she noted that the Global Stocktake emphasized the need for facilitation of climate resilient, sustainable agriculture. In the African context, she noted that sectors related to agri-food systems employ approximately 70 percent of Africa’s labor force and contribute to almost 40 percent of GDP. Unstable agri-food systems do not only threaten livelihoods, but they also exacerbate food insecurity.
She explained that the Mastercard Foundation Fund for Resilience and Prosperity, managed by KPMG Development Services, will be focusing on supporting SMEs in the Agriculture, Climate Adaptation and Digital Economy sectors which are all linked to agri-food systems either directly or indirectly. She noted that the Fund aims to address a broad spectrum of SME-specific challenges using four interventions across 20 countries in Sub-Saharan Africa. The Fund will offer:
Grace Mberia, and the Fund Communications and Knowledge Sharing Lead, Nashipae Leteipan, alongside Fund Grants and Finance Senior Associate, Winfred Kinuthia also attended other sessions within the Climate Action Innovation Zone as well as the Green Zone. The sessions covered various subjects around food and agriculture, sustainable finance as well the role of young women and men in the climate conservation. The team was able to network with various stakeholders and share information on the objectives of theFund for Resilience and Prosperity . At the Climate Action Innovation Zone, the Fund team also managed an exhibition stand where they shared information with interested potential stakeholders about the Fund, including its, objectives, focus sectors and countries. This also further provided an opportunity to interact with key players in the climate space from an agriculture, digital economy lens who will form prospective participants as well as connect and technical assistance partners.
COP 28 provided an opportunity to amplify the objectives of theFund for Resilience and Prosperity with a focus of climate-smart agriculture solutions and climate-related digital economy solutions with key industry players at the global level. It also enabled the Fund team to raise awareness to potential SMEs within the focus sectors on the upcoming challenge fund and add to the Fund database of prospective participants, connect partners and technical assistance service providers who will be engaged at different phases of implementation and along the Fund journey.
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