Putting Food on the Balance Sheet 2025

Several possible roles for financiers to support the food production transformation FIGURE 4 DescriptionRole of financierExamplesDirect farmer lending, derisked by catalytic capital5 Capital contributor with support from catalytic playersDirect farmer lending, facilitated by catalytic capital from corporate offtakers3 Capital contributor with support from corporate offtakersDiscounted loans provided to corporates to finance their value chains1 Issuer of sustainable debtIndirect farmer lending through a blended finance facility6 Capital contributor to blended financing facilityWorking capital financing at improved rates by leveraging food corporates2 Capital contributor in working capital finance modelScaled and de-risked financing by leveraging a corporate’s value chain4 Capital contributor in Filiere model XX Source: World Economic Forum. Importantly, all of the highlighted models leverage derisking strategies ranging from tranching and loan guarantees to carbon credit generation, deployed in various combinations. De-risking can occur in two ways: by directly lowering the risk exposure for capital providers, or by indirectly enhancing the business case for farmers, thereby improving their capacity to repay investors. Catalytic capital providers, including development finance institutions and multilateral development banks, play a crucial role in directly derisking commercial capital through tools such as first-loss coverage, guarantees, or subordinated tranches. Meanwhile, value chain actors can support derisking efforts either by absorbing specific costs (e.g., covering farmers’ interest), or by creating more stable market conditions. This includes securing demand through off-take agreements, offering price premiums, or enabling the monetization of ecosystem services – all of which improve predictability of farmers’ cash flow.Given the constraints, innovative mechanisms are needed to scale up financing for climate resilience in agriculture. Given the diversity of food systems and varying starting points of financial institutions, there is no one-size-fits-all solution. This report focuses on financing required to deliver the transformation, mostly through lending (recognizing the importance of other financial instruments, such as insurance). A number of financing models could lower investment barriers and bring in commercial players. Given the risks and challenges of lending directly to farmers, most commercial capital providers would either lend at lower risk to food corporates (who in turn provide funding to their supply chains) or leverage food corporates to de-risk lending to farmers and agribusinesses (models 1 to 4). Model 5 highlights the important role that banks can play by directly providing balance sheet support to farmers and agri-businesses. When mainstream commercial banks and asset managers lack the capabilities and risk appetite to engage in this type of direct lending, model 6 enables indirect participation by channelling funding and capital through blended finance structures. Finally, a capital coordination structure helps to accelerate the adoption of those financial mechanisms by fostering more effective collaboration and unlocking greater investment opportunities. The examples span emerging and mature markets and various commodities, highlighting the breadth of innovation observed across different markets, challenges and opportunities. Putting Food on the Balance Sheet 8