Rabobank is a large Dutch bank with a presence in 35+ countries, including 25+ emerging countries via Rabo Partnerships and Rabobank Foundation. In the Netherlands, Rabobank serves both retail and corporate clients, while globally they focus on the food and agricultural sector.

Within Rabobank, Rabo Partnerships is a dedicated entity that partners with financial institutions around the world to drive impact in food and financial systems, especially in emerging markets. In this way, it aims to strengthen these institutions’ ability to serve smallholder farmers and agricultural small- and medium-sized enterprises (agri‑SMEs).

We spoke to Pieter Bos, Sr. Advisor Blended Finance at Rabo Partnerships about how they engage in blended finance, their AGRI3 Fund, their focus areas, and more.

Tell us about how you engage with partners to develop scalable food and agriculture finance solutions in emerging markets.

We do this in a couple of ways. One is by taking minority equity stakes in these financial institutions and another is by delivering technical assistance. For example, part of this work involves setting up digital solutions, like developing digital credit‑scoring tools, using sensor and satellite data for farm and climate risk mapping, and embedding data‑driven approaches into the bank’s operations. The goal is really to help scale sustainable finance, reduce risk, and increase access to financial services where they are needed most.

We also have a dedicated blended finance team within Rabo Partnerships that focuses on bringing together public and private funding to mobilize capital into emerging markets. Rather than focusing on fund management, the team concentrates on origination and structuring: translating sustainability and transition challenges into concrete lending propositions that work for farmers, clients, and commercial banks alike.

The blended finance team structures loans for Rabobank’s large base of corporate and rural clients in emerging markets, both on an individual basis and through portfolio lending. In addition, the team supports local financial institutions in engaging with impact capital providers including impact funds and development banks, and developing lending propositions that expand access to finance for the agricultural sector.

Rabobank co-created the AGRI3 Fund, one of the most recognized blended finance vehicles. What motivated the bank to help launch this fund, and how has it evolved to meet market needs?

AGRI3 was launched in 2020 by Rabobank and United Nations Environment Programme (UNEP), together with IDH and with support from FMO - Entrepreneurial Development Bank, and the Dutch government. It was created in response to the urgent need to support the transition to sustainable agricultural practices and to combat deforestation. Many farmers and agribusinesses are willing to invest in sustainable land use, but the financial system is often unable to support the associated risks and longer timelines.

Transitioning to deforestation-free and climate-resilient production typically requires longer loan tenors, grace periods and financing for activities that might not generate immediate cash flows. These features sit uncomfortably within traditional bank risk frameworks.

AGRI3 was designed as a guarantee-based blended finance fund. By providing partial credit guarantees and technical assistance, the fund enables commercial banks to -amongst others - extend loan tenors, increase ticket sizes and support transition investments that would otherwise remain unfunded.

A strong example of a loan proposition built with Agri3 Fund is Renova Pasto in Brazil: a standardized loan product that combines long term financing, partial guarantees and technical assistance to support cattle farmers restore degraded pastureland and accelerate their compliance with the Brazilian Forest Code. Embedding this structure into regular credit processes has significantly improved efficiency and replicability.

Since its launch, AGRI3 has evolved from supporting individual transactions to more scalable, standardized approaches, including partnerships with other financial institutions.

Many of Rabo Partnerships’ blended finance transactions make use of guarantees. Could you explain how guarantees help unlock private capital, and why Rabo Partnerships has chosen to prioritize this instrument over other blended finance tools?

In sustainable agriculture and land-use transitions, risk is often structural rather than cyclical. Farmers face climate risks, transition risks and temporary income dips as they adopt new practices. At the same time, lenders face uncertainty around unfamiliar business models and the longer investment horizons these transitions require.

Guarantees directly address these challenges by absorbing part of the downside risk. For banks, that means they can lend with longer tenors, to clients, activities and/or assets that normally fall outside the standard risk appetite, while maintaining commercial pricing and credit discipline.

Rabobank sees clear value in these guarantees because they fit naturally into bank lending frameworks. They can be deployed efficiently, without requiring lenders to fundamentally change how they operate.

At the same time, guarantees remain scarce relative to demand. Expanding their availability for globally active lenders like Rabobank is, in our opinion, one of the most impactful roles development financial institutions (DFIs) and development banks could play in unlocking private capital for sustainable agriculture.

What are the key impact areas Rabobank has focused on through its blended finance initiatives?

Our blended finance team’s initial efforts have been mainly focused on deploying the AGRI3 Fund alongside Rabobank’s own balance sheet, which resulted in a sizeable and growing portfolio.

At the same time, when it comes to working with local financial institutions and our “partner banks”, we are still at an earlier stage, but we see a clear opportunity to scale. Local banks and non-bank financial institutions are essential for farmer finance. They are close to farmers and understand local realities, but many remain cautious about financing food and agriculture businesses because of perceived risks.

Moving the needle requires stronger collaboration with value‑chain players to improve risk profiles, combined with blended finance tools that allow banks to reach underserved segments more confidently.

Overall, Rabo Partnerships’ blended finance work aligns with three closely connected Rabobank impact priorities:

• Nature: forest protection, land restoration, and deforestation-free supply chains
• Climate: mitigation and adaptation through more resilient farming systems
• People: improved rural livelihoods, equality, income stability, and access to financial services for rural communities.

Food security is also becoming an increasingly important focus; our work supports initiatives that stabilize and grow sustainable food production at scale. This includes solutions that help farmers access modern equipment and high‑quality inputs essential for productivity and climate resilience. Blended finance solutions play a critical role by sharing transition risks and supporting the evolution of our credit and risk‑assessment frameworks. This allows commercial capital to finance investments that would otherwise fall outside standard risk appetite. Experience shows that these objectives cannot be addressed in isolation. For instance, even environmental initiatives only scale when they are economically viable for farmers.

As a commercial bank, what have been the key challenges and opportunities you’ve experienced when working with DFIs or other public sector stakeholders to structure blended finance transactions?

One recurring challenge we face is bringing together two quite different mindsets – those of commercial bankers and impact capital providers. It can take time to find the right partner with the appropriate de-risking tools, aligned impact ambitions, and the ability to engage at the right moment. This is partly because impact capital is fragmented.

At the same time, there is a strong opportunity to combine complementary strengths. Rabo Partnerships brings origination capacity, sector expertise, and execution capability, while catalytic capital providers bring risk-bearing, possibly concessional capital and environmental, social, and governance (ESG) expertise. When these strengths come together effectively, we can co-develop new lending propositions that work for large corporates and value chain players, while ensuring they are scalable and replicable beyond individual transactions.

Drawing on your experience as a commercial lender and globally active food and agriculture bank, where do you see the greatest opportunities for blended finance to help unlock more bankable transactions in the sustainable agriculture sector?

The biggest opportunity lies in moving beyond pilots and ensuring capital reaches farmers at scale.

Some of the most promising areas include portfolio-level guarantees for partner banks serving smallholders, value chain finance linked to corporates, like input providers, sustainable equipment manufacturers and off takers, and local currency risk-sharing structures. We also see strong potential in embedding climate and nature transition products directly into core bank offerings, such as with the Renova Pasto model, rather than treating it as a stand-alone initiative.

Rabo Partnerships can originate strong, real economy pipelines across regions and commodities. What is often missing is sufficient catalytic capital to share transition risks and enable these solutions to scale. This creates a clear opportunity for development banks, DFIs, and impact funds to partner with Rabobank, Rabo Partnerships, and our partner banks in building the next generation of sustainable agriculture finance.