Convergence Design Funding awards aim to mobilize new sources of financing to achieve the Sustainable Development Goals and catalyze the next generation of blended finance instruments
TORONTO, ON, CA – Convergence, the first and only platform exclusively focused on blended finance, announced that it will award one of its inaugural design funding grants to the Rainforest Alliance for the design of a financing facility to increase lending to smallholder farmers in the Ghanaian cocoa sector and ultimately increase productivity and resilience. Convergence is awarding these grants in an effort to surface the next generation of blended finance models and foster market-wide learning to drive the field forward. Convergence will award a minimum of CAD 10M in design grants over the next five years. This initial funding is provided by the Government of Canada.
The Rainforest Alliance will use the Convergence feasibility study funding to explore an investment and risk sharing facility for local financial institutions in Ghana to lend to smallholder cocoa farmers and their organizations for climate smart agriculture (CSA) investments. The organization anticipates that a guarantee mechanism will incentivize local financial institutions to lend using their own capital as well as support co-investment from private and public sectors. The Rainforest Alliance will work closely with Rabo International Advisory Services B.V. throughout the design activities.
“The Rainforest Alliance understands that creating resiliency to climate change is a vital component to improving the livelihood of smallholder farmers in Ghana,” said Nigel Sizer, president of the Rainforest Alliance. “A facility that incentivizes financial institutions to provide credit to farmers to implement climate smart agriculture practices, combined with our on-the-ground technical assistance, has the potential to increase productivity and resiliency, and ultimately improve farmers’ livelihoods.”
Convergence is an independent institution that helps public, philanthropic and private investors find and connect with each other to co-invest in blended finance deals in emerging markets. Convergence offers grant funding for practitioners to design innovative blended finance instruments that address a key development need but would otherwise be too risky or complex to pursue. To share what grantees have learned through their design process, Convergence has partnered with the Bertha Centre for Social Innovation and Entrepreneurship, a specialized unit within the University of Cape Town's Graduate School of Business. The Bertha Centre will create learning briefs that outline key decisions and outcomes from the design processes, ensuring practitioners considering similar instruments have access to design best practices.
“Smallholder farmers represent a vital component of most developing economies, and the vast majority have difficulty obtaining appropriately structured credit and other financial services. Through our Design Funding, Convergence hopes to support bold ideas like the Rainforest Alliance's facility, which if successful, could offer a replicable structure for using a limited base of grant funding, enhanced by technical assistance, to deliver credit services to this population,” said Joan Larrea, CEO of Convergence.
The Honourable Marie-Claude Bibeau, Canada’s Minister of International Development and La Francophonie commented, “Supporting innovative approaches to financing international development is a priority for our government. Through Convergence projects we will help Ghana’s most vulnerable, including women, access credit to start and grow businesses and boost their incomes.”
Convergence accepts Design Funding applications on a continuous basis, and reviews applications every quarter. To be considered for the next review cycle, practitioners must submit their applications by August 31, 2016. Visit www.convergence.finance/design-funding to learn more.
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ABOUT CONVERGENCE: Convergence is a platform that connects and supports private, public, and philanthropic investors for blended finance deals in emerging and frontier markets. Visit www.convergence.finance to learn more.
ABOUT THE RAINFOREST ALLIANCE: The Rainforest Alliance is a global nonprofit that works with people whose livelihoods depend on the land, helping them transform the way they grow food, harvest wood, and host travelers. From large multinational corporations to small, community-based cooperatives, businesses and consumers worldwide are involved in the Rainforest Alliance’s efforts to bring responsibly produced goods and services to a global marketplace where the demand for sustainability is growing steadily. For more information visit: www.rainforest-alliance.org