IDB | Climate-Smart Agriculture Fund

The Inter-American Development Bank’s Climate-Smart Agriculture Facility provides $3 million to $12 million per country to help Latin American and Caribbean governments build agricultural systems that are more productive, more resilient to climate change, and lower in greenhouse gas emissions. This isn’t just funding for individual farm projects—it’s comprehensive support for transforming entire agricultural sectors to cope with climate challenges while improving food security and farmer livelihoods.

If you’re a government agency responsible for agriculture, rural development, or climate adaptation in a Latin American or Caribbean country, this facility can finance the infrastructure, technical assistance, and farmer support programs needed to help your agricultural sector adapt to changing climate conditions. The program uses blended finance, combining IDB grants and loans with private sector investment to create sustainable solutions that continue benefiting farmers long after IDB funding ends.

Climate-smart agriculture means farming practices and systems that simultaneously increase productivity, enhance resilience to climate shocks, and reduce emissions. This might include drought-resistant crops, efficient irrigation systems, agroforestry that protects soil and sequesters carbon, digital tools that help farmers make better decisions, or financial products that help farmers invest in climate adaptation.

The facility operates on a country program basis, meaning IDB works with your government to design a comprehensive strategy for your agricultural sector, then provides multi-year funding to implement it. Programs typically run 5 years (60 months), giving enough time to achieve meaningful transformation of farming practices and systems.

Key Details at a Glance

What the Facility Actually Funds

The Climate-Smart Agriculture Facility supports comprehensive country programs that address multiple barriers to climate-smart farming. A typical program might include:

Climate-Smart Infrastructure and Technology:

• Efficient irrigation systems (drip, sprinkler, smart irrigation)
• Water harvesting and storage infrastructure
• Post-harvest infrastructure (storage, processing, cold chains)
• Renewable energy for agricultural operations
• Climate monitoring and early warning systems
• Digital platforms for weather forecasting and farm advisory services

Farmer Support and Extension Services:

• Training programs on climate-smart practices
• Demonstration farms and learning sites
• Technical assistance and advisory services
• Farmer field schools and peer learning networks
• Support for farmer organizations and cooperatives

Financial Services and Risk Management:

• Agricultural credit lines for climate-smart investments
• Crop insurance and weather-indexed insurance
• Guarantee funds to de-risk lending to smallholders
• Blended finance mechanisms to attract private investment
• Payment for ecosystem services programs

Agroforestry and Sustainable Land Management:

• Agroforestry system establishment
• Soil conservation and restoration
• Sustainable livestock management
• Integrated crop-livestock-forestry systems
• Biodiversity conservation in agricultural landscapes

Value Chain Development:

• Market linkages for climate-smart products
• Certification and quality standards
• Processing and value addition infrastructure
• Market information systems
• Support for climate-smart commodity value chains

Policy and Institutional Strengthening:

• Climate-smart agriculture strategies and policies
• Institutional capacity building
• Monitoring and evaluation systems
• Knowledge management and learning platforms
• Coordination mechanisms across government agencies

The facility can fund technical assistance, infrastructure, equipment, training, financial services, and institutional development—essentially whatever is needed to transform your agricultural sector toward climate-smart practices.

Who Can Apply and Eligibility Requirements

The facility is designed for governments in IDB member countries in Latin America and the Caribbean. Individual farmers, companies, or NGOs don’t apply directly—applications come from government.

You can apply if you:

• Are a sovereign government or subnational entity in an IDB borrowing member country
• Have a clear strategy for climate-smart agriculture aligned with your NDC and food security plans
• Can provide at least 20% co-financing from public or private sources
• Have mechanisms to mobilize private sector investment in climate-smart agriculture
• Can demonstrate institutional capacity to implement a multi-year program
• Are committed to IDB’s environmental and social safeguards

Strong applications typically:

• Address climate vulnerabilities that significantly affect your agricultural sector
• Target smallholder farmers who are most vulnerable to climate impacts
• Include clear strategies for private sector engagement and co-investment
• Align with national climate commitments (NDCs) and agricultural development plans
• Have strong government commitment and political support
• Include robust monitoring systems to track climate and development outcomes
• Show how the program will be sustainable beyond IDB funding

The facility prioritizes:

• Programs that benefit smallholder and family farmers
• Approaches that reduce emissions while improving productivity and resilience
• Innovations in climate-smart agriculture that can be scaled
• Programs that strengthen women’s participation in agriculture
• Strategies that protect biodiversity and ecosystem services
• Approaches that create economic opportunities in rural areas

You’re probably not competitive if:

• Your proposal focuses on conventional agricultural intensification without climate considerations
• You can’t demonstrate how you’ll mobilize private sector investment
• You lack the institutional capacity to implement a complex, multi-year program
• Your approach doesn’t align with your country’s NDC or food security strategy
• You can’t provide the required 20% co-financing

The most successful applicants have clear climate-smart agriculture strategies, strong institutional frameworks, and demonstrated ability to work with both public and private sectors.

Application Process and What to Expect

Applying for Climate-Smart Agriculture Facility funding is a multi-stage process that typically takes 12-18 months from initial concept to approved program:

Stage 1: Initial Consultation - Contact IDB’s climate change and agriculture teams to discuss your interest. They can provide guidance on whether your concept fits the facility and what IDB’s priorities are in your country.

Stage 2: Concept Development (2-3 months) - Develop a program concept in consultation with IDB, including preliminary assessment of climate vulnerabilities, proposed interventions and approach, estimated budget and financing plan, and alignment with national strategies.

Stage 3: Concept Review - IDB reviews your concept for strategic fit, feasibility, and alignment with facility priorities. Strong concepts are invited to develop full proposals.

Stage 4: Full Proposal Development (4-6 months) - Work with IDB to develop a comprehensive program proposal including:

• Detailed climate vulnerability and needs assessment
• Program design with specific components and activities
• Implementation arrangements and institutional framework
• Comprehensive budget and financing plan
• Private sector engagement strategy
• Environmental and social assessment
• Monitoring and evaluation framework
• Sustainability and scaling strategy

IDB typically provides technical assistance during this stage to help develop a strong proposal.

Stage 5: Due Diligence and Approval (3-6 months) - IDB conducts thorough review including technical assessment, financial analysis, environmental and social safeguards review, institutional capacity evaluation, and consultations with stakeholders.

Stage 6: Board Approval and Contracting (2-3 months) - If approved by IDB management and board, negotiate final program documents, financing agreements, and implementation arrangements.

Stage 7: Implementation (60 months) - Implement your program with regular reporting, monitoring, and IDB support.

The process requires patience and sustained engagement, but IDB provides substantial support throughout.

Insider Tips for Strong Applications

Ground your program in solid climate vulnerability analysis. Show specifically how climate change is affecting your agricultural sector: changing rainfall patterns, increased droughts or floods, new pests and diseases, etc. Use data and evidence, not general statements about climate change.

Focus on smallholders and vulnerable farmers. IDB prioritizes programs that benefit those most affected by climate change and least able to adapt on their own. Show how your program reaches smallholder farmers, women farmers, indigenous communities, or other vulnerable groups.

Have a credible private sector engagement strategy. Don’t just say “we’ll involve the private sector.” Identify specific companies, financial institutions, or agribusinesses that will participate, what their role will be, and what incentives will motivate their involvement.

Demonstrate how you’ll achieve triple wins. Climate-smart agriculture should increase productivity, enhance resilience, and reduce emissions. Show how your program achieves all three, with specific metrics for each.

Build on what works. If your country has successful climate-smart agriculture pilots or programs, show how you’ll scale them. IDB prefers to expand proven approaches rather than experiment with untested ideas.

Address the full value chain. Programs that only focus on production often fail because farmers can’t sell their products. Include market linkages, processing, finance, and other value chain elements.

Show alignment with national priorities. Reference your NDC, national agricultural strategy, and food security plans. Programs aligned with government priorities get stronger political support and are more likely to be sustained.

Have realistic implementation arrangements. Identify which government agencies will implement which components, how coordination will work, and what capacity building is needed. IDB has seen too many programs with unrealistic implementation plans.

Plan for sustainability from day one. Explain what happens after IDB funding ends. How will services continue? Who will maintain infrastructure? What policy changes or institutional arrangements will ensure sustainability?

Common Challenges and How to Navigate Them

Coordinating across government agencies. Climate-smart agriculture programs often involve agriculture, environment, finance, and rural development ministries. Establish clear coordination mechanisms and get high-level political commitment to inter-agency collaboration.

Mobilizing private sector investment. Getting private companies and financial institutions to invest in smallholder agriculture is challenging. Offer clear value propositions, reduce risks through guarantees or blended finance, and demonstrate market opportunities.

Reaching smallholder farmers at scale. Delivering services to thousands of dispersed small farmers is logistically complex. Use farmer organizations, digital platforms, and public-private partnerships to achieve scale efficiently.

Measuring climate outcomes. Tracking emissions reductions, resilience improvements, and climate adaptation is more complex than measuring yields or income. Invest in robust monitoring systems from the start.

Ensuring gender inclusion. Women farmers often face additional barriers to accessing services, finance, and technology. Design specific interventions to ensure women benefit equitably from the program.

Long approval timelines. The 12-18 month process from concept to approval is frustrating when farmers are facing climate impacts now. You can’t speed it dramatically, but you can avoid delays by submitting complete, high-quality proposals.

Frequently Asked Questions

Can subnational governments apply? Yes, if they’re eligible for IDB borrowing. State or provincial governments can apply with national government endorsement.

Can we combine this with other IDB funding? Yes. The facility often blends with other IDB instruments to create comprehensive financing packages.

What if our country already has an IDB agriculture project? You can still apply if you have capacity to manage multiple projects and the new program addresses different needs or regions.

How much of the funding is grants vs loans? This varies by country and program. Less developed countries typically receive higher grant percentages. Discuss with IDB during program design.

Can we include carbon finance? Yes. Programs that reduce emissions can potentially access carbon markets, and IDB can help structure this.

What happens if we don’t meet our targets? IDB works with countries to understand challenges and adjust approaches. However, persistent underperformance could affect future funding.

Can private companies receive funding directly? Generally no. Funding goes to government, which then provides services, infrastructure, or financial products that benefit farmers and private sector.

How is this different from IDB’s regular agricultural lending? The facility specifically focuses on climate-smart agriculture and includes technical assistance, blended finance, and private sector mobilization components not always present in regular loans.

How to Get Started

Step 1: Review your country’s climate vulnerabilities in agriculture and existing climate-smart agriculture initiatives.

Step 2: Contact IDB’s country office and climate change/agriculture teams to discuss your interest and get guidance.

Step 3: Develop a preliminary program concept aligned with your NDC and national agricultural strategy.

Step 4: Engage potential private sector partners and secure preliminary commitments.

Step 5: Work with IDB to refine your concept and develop a full proposal.

Step 6: Submit your proposal and be prepared for thorough review and negotiation.

For more information, visit the IDB website or contact your country’s IDB representative.

Climate change is already affecting agriculture across Latin America and the Caribbean, threatening food security and farmer livelihoods. The Climate-Smart Agriculture Facility provides substantial resources to help countries adapt while building more productive, sustainable agricultural systems. For governments ready to commit to transforming their agricultural sectors, this facility offers the financing and technical support to make it happen.