THE CASE FOR FINANCING SUSTAINABLE AGRIFOOD SYSTEMS IN LAC

This report by the Climate Policy Initiative outlines the environmental impact of agrifood systems in Latin America and the Caribbean (LAC), the financial barriers preventing their transition to sustainability, and how blended finance mechanisms can unlock private investment to address these challenges.

• Agriculture and land use are the primary drivers of environmental degradation and emissions in Latin America and the Caribbean, accounting for more than 55% of the region's greenhouse gas emissions. These sectors are responsible for 70% of habitat conversion and the consumption of 70% of freshwater resources.
• Despite their economic and environmental significance, agrifood systems in LAC receive a disproportionately low share of climate finance, representing only 8% of total flows. The transition to sustainable practices is hindered by barriers such as a lack of credit history and collaterals leading to high perceived risk, mismatches in investment scale and terms, and a conflict between short-term visions and long-term sustainability goals.
• Blended finance, which uses public or philanthropic capital to improve risk-return profiles for private investors, is a viable tool for overcoming investment barriers. To date, Convergence has recorded 59 blended finance transactions for agriculture in LAC totaling $7 billion, with 20 of these transactions ($3.5 billion) focused on the agroforestry sub-sector.
• Blended agriculture deals in LAC are primarily concentrated in Brazil, with 17 transactions, and Colombia, with 13 transactions.
• Practitioners such as SAIL Investments, AGRI3 Fund, and Root Capital employ diverse strategies to finance sustainable agrifood systems: SAIL Investments focuses on deforestation-free supply chains via direct lending to large producers; AGRI3 Fund provides guarantees to local financial institutions to unlock lending; and Root Capital provides direct lending to small-holder farmers.

APA

Climate Policy Initiative (2025). THE CASE FOR FINANCING SUSTAINABLE AGRIFOOD SYSTEMS IN LAC. https://www.climatepolicyinitiative.org/publication/blended-climate-finance-for-sustainable-agrifood-systems-latin-america-the-caribbean-lac/

Chicago

Climate Policy Initiative. THE CASE FOR FINANCING SUSTAINABLE AGRIFOOD SYSTEMS IN LAC. 2025. https://www.climatepolicyinitiative.org/publication/blended-climate-finance-for-sustainable-agrifood-systems-latin-america-the-caribbean-lac/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=THE CASE FOR FINANCING SUSTAINABLE AGRIFOOD SYSTEMS IN LAC |date=17 April 2025 |url=https://www.climatepolicyinitiative.org/publication/blended-climate-finance-for-sustainable-agrifood-systems-latin-america-the-caribbean-lac/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2025case, author = {{Climate Policy Initiative}}, title = {{THE CASE FOR FINANCING SUSTAINABLE AGRIFOOD SYSTEMS IN LAC}}, institution = {Climate Policy Initiative}, year = {2025}, month = apr, url = {https://www.climatepolicyinitiative.org/publication/blended-climate-finance-for-sustainable-agrifood-systems-latin-america-the-caribbean-lac/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }