Cocoa Climate Resilience Fund

About

Overview
Cocoa Climate Resilience Fund aims to accelerate climate adaptation measures for smallholder farmers in the cocoa sector in West Africa, such as shading and crop diversification. By financing these measures, the fund aims to protect and improve farmers’ livelihoods, and avoid new deforestation.

The Problem
Cocoa is the main agriculture export product in Ghana (around US$ 2 bn) and sustains the livelihood of more than 800,000 small-scale households (70-100% of annual household income). According to research, future cocoa production is highly vulnerable to climate change risks, especially to excessive dry seasons. Future shifts to less affected areas are likely to lead to new deforestation (25% of deforestation in Ghana and Cote D’Ivoire is cocoa farming linked). Adaptation measures, such as shading and diversification are therefore expected to (i) protect and improve farmer’s livelihoods, and (ii) prevent further deforestation.

The Solution
Cocoa Climate Resilience Fund is a fund aimed at scaling up and commercializing economically attractive climate change adaptation measures for smallholders and SMEs operating in the cocoa sector, in Ghana and neighboring countries. The fund combines three pockets of capital:  a technical assistance facility, a de-risking facility, and a loan facility.

Target Impact
The proponents, Ikigai Advisors and South Pole, estimate the investment need for climate resilient cocoa agriculture in Ghana at US$ 500-800 million. Such investment is expected to secure and improve the livelihoods of 400,000 households and avoid losses to the economy of US$ 410 million per year. By financing climate adaptation measures the fund will also have a strong impact on climate mitigation by causing avoidance of new deforestation, and increase of carbon sequestration. The fund also provides a designated funding window for women in a male dominated industry.