Toronto, March 16, 2023 – Convergence awarded a feasibility study grant to Haqdarshak Empowerment Solutions Private Limited (Haqdarshak), which aims to encourage the adoption of climate friendly assets among farmers in rural India. The grant will support the design of the Climate Resilience Collective, a USD 15 million blended finance facility that will help rural farming households in India to access climate-friendly government subsidies and low-cost debt for acquiring climate-friendly assets, such as solar pumps and solar panels. The Facility has a strong gender lens as it focuses on livelihood generation and improving the welfare of local women. The grant is awarded through Convergence’s Gender-Responsive Climate Finance Design Funding Window, funded by Global Affairs Canada.
Over 60% of India’s population is engaged in the agriculture sector, which is one of the largest consumers of fossil fuel in India. Over 7 million diesel pumps are used on Indian farms everyday, which contribute significantly to carbon dioxide emissions. The Government of India is focusing its efforts to reduce the use of fossil fuel by farms to zero and encourage the agriculture sector to use renewable energy, through the introduction of several climate friendly subsidy schemes. However, the uptake of such welfare programs remains extremely low, due to a general lack of awareness among rural farmers, complex application processes for accessing subsidies, and farmers’ inability to meet the high upfront investment required to purchase and install the assets.
The Climate Resilience Collective will partner with local non-banking financial entities to offer low-cost debt to farmers seeking finance for the up-front costs of acquiring these climate friendly assets. The facility will also support farming households in identifying an appropriate subsidy scheme and applying for the subsidies. Rural farmers in India are largely disconnected with formal financial channels and instead rely on informal financing methods. Through the facility, Haqdarshak will promote financial inclusion and support these farmers in building their credit history. The facility will also support women empowerment and gender equality by engaging local women as field agents to connect with farming households and provide last mile application support.
“The Climate Resilience Collective is a game-changing program for Haqdarshak as we build our tech-based solution for accessing climate-positive government subsidies for farmers and small businesses. With the Convergence grant, we at Haqdarshak will be able to test the viability of such a model and make critical changes or revisions to our assumptions," says Aniket Doegar, CEO and co-founder, Haqdarshak.
Convergence's grant will support Haqdarshak in exploring the feasibility of establishing the Climate Resilience Collective. The funding will also help them refine their vehicle structure, engage in market scoping and fundraising activities as well as explore partnerships with important stakeholders, such as local financial institutions. The aim is to support about 5,000 farming households in rural India to access low-cost debt to procure climate friendly assets and infrastructure and offer end-to-end support to access relevant government subsidies to reduce the final cost to the farmer.
"We want to support the Climate Resilience Collective because of the straightforward way it uses blended finance to fill a critical gap in India's ambitious efforts to reach net-zero, while putting women first," says Joan Larrea, CEO at Convergence.
About Haqdarshak Empowerment Solutions
Haqdarshak is an Indian for-profit social enterprise established in 2016. It specializes in providing assisted-tech services for doorstep delivery of welfare entitlements for individuals and micro-businesses. Over the years, Haqdarshak has trained more than 25,000 field agents across 25 Indian states who have collectively reached out to over 2.7 million citizens educating them about eligible welfare programs, facilitating over 2.3 million applications and unlocking over USD 514 million in welfare benefits.
About Convergence’s Design Funding Program
Convergence’s Design Funding Program operates as a market acceleration tool providing early-stage capital to support blended finance solutions in frontier markets and nascent sectors to accelerate the number of investible transactions in market targeting SDGs. The Gender-Responsive Climate Finance Window, funded by the Government of Canada, provides grant funding for the design, and launch of innovative blended finance solutions focused on the intersection of climate change and gender equality in emerging markets globally. Please visit Convergence’s Design Funding page for information on submission deadlines as well as other open windows.
Convergence is the global network for blended finance. On top of market acceleration through its Design Funding program, Convergence generates blended finance data, intelligence, and deal flow to increase private sector investment in developing countries. Convergence’s global membership includes nearly 200 public, private, and philanthropic investors as well as sponsors of transactions and funds. To learn more, visit www.convergence.finance