Food Security Green Bonds
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FAO ; APRACA ;
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This report examines the growing pressures on global agrifood systems, where hunger and food insecurity remain widespread and are expected to intensify under climate change and population growth. It highlights the dual challenge of expanding production to meet rising demand while addressing the sector’s significant contribution to greenhouse gas emissions and increasing climate risks that threaten agricultural land and livelihoods.Despite strong recognition by countries of the need for climate‑smart agriculture and agrifood systems transformation, progress is constrained by a large financing gap. Current investment levels fall far short of the estimated USD 1.1 trillion required annually by 2030, with particularly acute shortfalls affecting smallholder farmers and agri‑SMEs. Public finance continues to dominate, reflecting both its catalytic role and the barriers limiting private sector engagement.The report identifies public‑led green bonds as a practical avenue to mobilize private and institutional capital at scale. It reviews recent growth in green and sustainable bond markets, including rapid expansion in Asia, and outlines how governments and public financial institutions can use these instruments to crowd in investment while aligning with national climate and development priorities.A central constraint remains the limited pipeline of investment‑ready projects in agrifood systems. The report discusses how technical assistance and project preparation facilities can address this by developing bankable projects, strengthening capacities, and enabling aggregation models that extend financing to smallholders and local enterprises.It further presents models for Food Security Green Bonds and related instruments, describing how they can channel long‑term financing into climate‑resilient and low‑emission agriculture. Guidance is provided on bond design, use of proceeds, and alignment with international standards, alongside simplified criteria to support investments that enhance productivity and resilience without harming ecosystems or communities.The report concludes that combining public leadership, innovative bond instruments, and targeted support mechanisms can help close the financing gap, expand access to climate finance, and support the transition to more resilient and sustainable agrifood systems.