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- IFAD and Equity Group have launched the US$200 million Africa Rural Climate Adaptation Finance Mechanism (ARCAFIM) to expand climate adaptation financing for smallholder farmers and rural businesses in East Africa.
- The 12-year programme targets Kenya, Uganda, Tanzania and Rwanda, with plans to reach about 260,000 smallholder producers and 500 rural micro, small and medium-sized enterprises.
- The financing will support climate-resilient investments, including irrigation, water harvesting, improved livestock systems, post-harvest storage, renewable energy and climate-resilient agro-processing.
- ARCAFIM combines US$180 million in lending with about US$20 million in technical assistance, with at least 50% of beneficiaries targeted to be women and 30% youth.
The International Fund for Agricultural Development (IFAD) and Equity Group have formally launched a US$200 million financing mechanism to expand access to climate adaptation finance for smallholder farmers and rural businesses across East Africa.
The Africa Rural Climate Adaptation Finance Mechanism (ARCAFIM) was kicked off on September 4, 2026, during the Africa Food Systems Forum in Kigali, Rwanda.
The 12-year programme will operate in Kenya, Uganda, Tanzania and Rwanda, targeting about 260,000 smallholder producers and 500 rural micro, small and medium-sized enterprises.
The mechanism is structured around US$180 million in lending capital and approximately US$20 million in technical assistance. Equity Group will provide US$90 million from its own balance sheet, matching concessional capital on a one-to-one basis. The lending facility is expected to generate about US$266 million in loans as the funds revolve through multiple investment cycles.
ARCAFIM will finance climate-resilient investments including irrigation and water harvesting, improved livestock systems, post-harvest storage, renewable energy and climate-resilient agro-processing.
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Technical assistance will also help financial institutions, farmers and rural businesses identify and finance viable adaptation investments.
At least 50 per cent of intended beneficiaries will be women and 30 per cent youth, while the programme is expected to benefit about 1.5 million people directly and indirectly and strengthen food security for approximately 1.2 million people.
IFAD Vice President Gérardine Mukeshimana said ARCAFIM is designed to make climate adaptation finance a sustainable business line for African financial institutions rather than a temporary intervention.
The mechanism is backed by partners including the Green Climate Fund, Finland, the Nordic Development Fund, Denmark and the European Union. The Green Climate Fund has committed US$55 million to the programme.
The initiative is intended to demonstrate whether blended finance and private-sector lending can close the gap between global climate commitments and the capital available to farmers facing droughts, floods and other climate-related risks. IFAD and Equity Group have identified Southern and West Africa as potential regions for future replication of the model.
