Description financing model: Intermediated Financing Facility
Commercial capital is channeled through a facility that extends loans to farmers. These facilities often pool funding from both commercial and catalytic sources, enabling greater scale while balancing risk and return
Applicability: Well-suited for a range of asset owners (e.g., pension funds, institutional investors) who seek to support farmer financing without direct engagement
Considerations: Success is dependent on effective matching of stakeholders with different risk-return expectations
Description of de-risking tool(s):
Ecosystem outcome monetization: Positive environmental outcomes (e.g., carbon sequestration) of farmers are quantified and monetized through ecosystem outcome credits (e.g., carbon credits). This creates an additional revenue stream for projects and links sustainability outcomes directly to financial returns
Case study description:
Coordinates relationships and transactions between buyers/ investors and farmers to incentivize and implement practices that generate high-demand environmental outcomes, by creating a voluntary carbon credit platform
- CANZA funds climate smart practices for farmers, using proceeds generated by ecosystem outcomes and additional subsidies from the government per generated credit (this will decrease over time with predicted increase in ROI)
- Farmers enroll to the Environmental Outcomes Marketplace and generate carbon credits by adopting climate smart practices
- CANZA is developing its own MRV1 framework under its Climate-Smart Initiative2 to measure, model and monitor anticipated project outcomes, provide period updates/ documentation on project success and verify outcomes
- Carbon credits are monetized by value chain players, the proceeds flow to CANZA
- Value chain players & Canadian government fund technical assistance to farmers - provided by external players
No outcomes so far – 5 to 8 targeted regional pilots; aim is to have $20M funding
