Intervention Package 6

Significant investments are needed to enhance sustainability in agriculture and food systems in the ASEAN region. However, private-sector investments in small and medium enterprises (SMEs) face challenges in assessing and quantifying the risks, rewards, and impacts associated with investments. Factors contributing to this include context-specific risks, information asymmetries, capital-raising bottlenecks, and high transaction costs. These limited financing opportunities are reflected in agriculture and food systems receiving less than 10% of total foreign direct investments (FDI) in the region. Existing investment approaches prioritise financial risks over operational factors, hindering efficient allocation of capital. Collaboration between CGIAR and the global investment community can integrate science and data-driven knowledge into finance-based approaches, improving financing for agri-food systems' transformation in the ASEAN region.

Mobilising private investments for SMEs and farmers in the ASEAN agri-food sector faces challenges due to a nascent investment environment, limited knowledge of sustainable business models, and difficulties in deal-sourcing and investee identification. The ASEAN Guidelines on Responsible Investment aim to unlock additional capital and an ASEAN-wide strategy is needed for sustainable financing of agri-food systems transformation.

The IP’s overall objective is to pool diverse sources of private capital to scale region-wide implementation of climate-smart agricultural (CSA) practices. The IP will enable multidimensional assessment and selection of investees, and identifying, implementing, and monitoring CSA practices. The IP will also assess the overall impacts of investments across climate-change mitigation and adaptation and productivity dimensions. In addition to financing agriculture and food-related SMEs to develop profitable and climate-smart operations, this will also enable investors to comply with ESG (Environmental, Social and Governance) regulations.

1. De-risking impact investments through infusion of science-based tools and advisory

2. Increased accessibility of private capital in agriculture and food systems

3. Incentivizing solutions/services in the agriculture and food system space

4. Improved knowledge of blended financing options among AMS

• Learning events with public and private sector investing community to promote the use of blended financing investment models along with CGIAR driven science to promote sustainability in the agriculture and food sector

• Including CGIAR-generated science-based, data-driven approaches for initial assessment / pre-screening of investments in the agri-food system in the ASEAN region.

• Using CGIAR-derived science, data, experience, and expertise to monitor and assess impacts of investments in the post-investment phase

• Fortifying existing self-assessment toolkits designed specifically to make investees investment ready

IP6 aims to mobilise public and private capital for sustainable investments in the agri-food sector, benefiting farmers and SMEs in ASEAN countries. The interventions have the potential to empower women and youth, considering the higher proportion of female workers in the ASEAN region compared to the global average.

Dharani Burra
Intervention Package 6 Convener
The Alliance of Bioversity International and CIAT

D.Burra@cgiar.org