Finance, technology and innovation are themes threaded throughout the Climate Investment Funds’ (CIF) work and a pioneering new project in Tajikistan is encapsulating all three in one package.
Earlier this month, the CIFs Pilot Program for Climate Resilience (PPCR), the European Bank for Reconstruction and Development (EBRD) and the Tajik government launched CLIMADAPT, a new project specifically dedicated to financing innovative technologies that will help make Tajikistan more resilient to climate change.
Tajikistan is amongst the most vulnerable countries to climate change in the world. Its impacts are hitting this central Asian country hard and threatening the agricultural sector and livelihoods of the Tajik people. In parts of the country, it’s threatening to reduce crops by 30% by the end of this century, endangering food security and pushing more people into poverty. For a country where agriculture accounts for one quarter of the country’s GDP and two thirds of the working population, this requires urgent adaptation and resilience
Here’s what CLIMADAPT aims to do – The CIF is providing $5 million USD and has leveraged an additional $5M USD from EBRD to create a pilot Climate Resilience Financing Facility. The program - entitled CLIMADAPT - aims to help Tajik households and businesses cope with the effects of climate change. It finances projects which improve water efficiency, increase energy efficiency and reduce soil erosion. These could include developing new orchards for growing apples, installing rainwater harvesting systems or replacing windows and doors leaking heat.
The technologies supported will help businesses and households use energy more wisely, thus cutting their costs. They will enable farmers to use water wisely while improving their yields. They will also minimize soil erosion – a real problem in Tajikistan and one being worsened by climate change.
Here’s how it works - CLIMADAPT offers loans to private businesses, farmers and households via local Financial Institutions (FIs.) These FIs have the potential and willingness to act as agents of change to rapidly and sustainably increase the market penetration of certain technologies. They are a key nexus between investors, suppliers, installers and providers. They help us reach many more households and businesses because their branches and customers give them strong networks and lots of specialized local knowledge.
A team of local and international stakeholders and experts will provide technical advice on the adoption of best practices and most suitable technologies. Project leads will meet monthly with civil society, the private sector and other stakeholders to ensure technologies selected are the most suitable.
And here’s why it matters –This work will be an important part of the agenda to reduce poverty through economic development, make businesses more climate resilient and create an enabling environment for future investment. Agriculture in particular will benefit from CLIMADAPT, and with over half the country employed in this sector it offers a solid foundation and a ready-made client base.
Climate change is a risk amplifier and Tajikistan is a country where many of its key sectors – such as energy and agriculture – are very climate-dependent. So it makes sense that if we can build resilience to climate variability in these sectors we’re also reducing the impacts of climate shocks and helping Tajikistan’s economy grow at the same time.
As far as we know, this is the first time there has ever been a dedicated finance mechanism for climate resilience operating with local FIs. Many other countries around the world are looking at this project with great interest because they face many of the same challenges associated with climate change. We look forward to watching it grow from strength to strength and sharing the lessons we learn along the way.