New Delhi, India — The Climate Finance Network (CFN), hosted by the United Nations Development Programme (UNDP) and supported by the UK’s Foreign, Commonwealth & Development Office (FCDO), announced today a new partnership with The Blended Finance Company (TBFC) to design a pioneering guarantee facility aimed at expanding access to financing to promote climate-smart agriculture (CSA). 

India’s agriculture sector forms the bedrock of its economy, contributing 16% to the country’s Gross Domestic Product (GDP) as of FY 2024 at current prices, and supporting more than 45% of its workforce. It also continues to be characterised by the predominance of small and marginal farmers, operating fragmented holdings with a high dependency on increasingly unpredictable rainfall, temperature variability, resource scarcity and wide variability in agro-climatic and socio-economic 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 will work with UNDP to design a dedicated guarantee facility that will enable financial institutions to confidently extend credit to Village-Level Entrepreneurs (VLEs), FPOs and FPCs, including women-led groups, for the adoption and deployment of climate-smart agriculture solutions. The facility aims to catalyse approximately USD 45 million in financing, helping to overcome long-standing barriers to climate-smart agriculture investments that stem from perceived risks among financial institutions to lend to the agriculture sector. This initiative also complements UNDP’s upcoming Programme focused on market-led inclusive value chain development interventions. 

Angela Lusigi, UNDP India Resident Representative, “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. This will be supported by credit enhancement measures that allow financial institutions to pilot new instruments and better understand the underlying risk. To further reduce post-harvest losses and strengthen farmers’ price-risk management, the facility will also extend coverage to currently underserved agri-commodities. The guarantee instrument will be designed to support the full agricultural cycle, from pre-harvest to post-harvest activities and will also incorporate complementary mechanisms such as technical assistance and results-based incentives to further strengthen women’s participation in CSA value chains, enhance market linkages, and improve the bankability and governance of FPOs.

Aparna Dua, Partner, 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. 

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 CFN is a regional programme hosted by UNDP and supported by the UK’s FCDO, active in 18 countries across the Asia–Pacific region. It works closely with Ministries of Finance to strengthen the mobilisation, management, and tracking of climate finance while promoting gender equality, poverty reduction, and inclusive development. 

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