New Delhi, India — The Climate Finance Network (CFN), a flagship UNDP regional initiative supported by the UK government’s flagship Climate Action for a Resilient Asia (CARA) Programme, announced today a new partnership with The Blended Finance Company (TBFC) to create a new guarantee facility that makes financing more accessible for climate-smart agriculture.

India’s agriculture sector forms the bedrock of its economy, contributing 16% to the country’s Gross Domestic Product (GDP), and supporting more than 45% of its workforce. It is dominated by smallholder farmers who remain highly vulnerable to increasingly unpredictable rainfall, temperature shifts, resource scarcity, and diverse agro-climatic conditions.

These climate risks disproportionately burden women farmers and women-led Farmer Producer Organisations (FPOs) and Companies (FPCs), who face continued barriers to credit, information, and financial decision-making. The new partnership seeks to address these inequities directly through a gender-responsive financing mechanism that improves financial inclusion alongside climate resilience. 

Under this partnership, TBFC UNDP will design a guarantee facility that will enable financial institutions to confidently extend credit to Village-Level Entrepreneurs (VLEs), FPOs and FPCs, including women-led groups, to scale climate-smart agriculture. By reducing perceived lending risks, the facility aims to catalyse roughly USD 45 million in new financing and strengthen the flow of capital into the agriculture sector. It will also complement UNDP’s upcoming Programme on inclusive, market-led inclusive value chain. 

Angela Lusigi, UNDP India Resident Representative, said “Climate resilience in agriculture depends on ensuring women farmers have equal access to finance and opportunity. This partnership helps close long-standing gaps by creating a gender-responsive guarantee facility that encourages financial institutions to invest confidently in underserved communities.”

The facility will enable access to longer-tenor, higher-ticket asset financing and working capital—both of which are critical for the sector. It will also help lenders to pilot new financing approaches by leveraging credit enhancement measures. To cut post-harvest losses and give farmers better price protection, the facility will cover more agri-commodities than those usually financed. Alongside the guarantee, the Facility will provide technical assistance and performance-based incentives to support women’s participation, improve market access, and strengthen the bankability of FPOs across the full agricultural cycle. 

Aparna Dua, from The Blended Finance Company said “TBFC’s unique model enables the rapid scaling of innovative financing solutions across sectors and geographies. The challenges faced by smallholder farmers across the region are strikingly similar, and we hope this facility can serve as a blueprint for the broader Global South. The encouraging early response to this idea from financial institutions and foundations reaffirms both its relevance and its urgency. Delivering the impact we envision will require coordinated action across the ecosystem, and we are pleased to partner with UNDP to fill a critical gap and set an example for the Global South.”

The Facility is also intended as a use case of the Climate Finance Taxonomy currently under development by India’s Ministry of Finance, while also building on UNDP’s SDG Impact Standards. By applying the taxonomy to the agriculture–climate nexus, the initiative aims to demonstrate how consistent climate investment classification can support better mobilisation, tracking, and reporting of green finance flows. Priority states include Uttar Pradesh, Bihar, Odisha, Chhattisgarh, Madhya Pradesh, Maharashtra, and Jharkhand. 

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About UNDP

UNDP works in about 170 countries and territories, helping to eradicate poverty, reduce inequalities and exclusion, and build resilience so countries can sustain progress. As the UN’s development agency, UNDP plays a critical role in helping countries achieve the Sustainable Development Goals. UNDP has been working in India since 1951 in almost all areas of human development. With projects and programmes in every state and union territory in India, UNDP works with national and subnational governments, and diverse development actors to deliver people-centric results, particularly for the most vulnerable and marginalised communities. 

About the Climate Finance Network (CFN)

The UNDP Climate Finance Network (CFN) supports countries in the Asia-Pacific region to strengthen their climate finance systems and unlock investments needed to meet national climate goals. The Network promotes peer learning, knowledge exchange, and technical assistance across ministries of finance, planning, and environment. Operating as a regional platform, CFN helps integrate climate into budget processes, improve coordination across sectors, and ensure transparency and accountability of climate finance. It is supported by the UK government’s flagship Climate Action for a Resilient Asia (CARA) programme and the Government of Sweden through Sida.

About The Blended Finance Company (TBFC)

The Blended Finance Company (TBFC) is a purpose-built, transaction advisory and execution platform focused on mobilizing capital for sustainable development through innovative blended financing structures. TBFC works with development agencies, philanthropies, financial institutions, governments, and social enterprises to design and implement transactions that seek to activate new sources of capital, especially private capital, for climate resilience, equitable growth, and socially inclusive impact. The organization operates at the intersection of finance and development, aiming to deploy concessional resources in ways that leverage substantial commercial capital.

Contact details

Karanraj Chaudri

Advisor, Sustainable Finance 

Karanraj.chaudri@undp.org