KIGALI, Rwanda, Sep 3 — Governments, financiers and agricultural organisations meeting in Kigali have called for new financing models to help African farmers invest in climate-smart technologies, saying the continent’s challenge is increasingly how to finance existing solutions rather than develop new ones.
The call emerged during the Climate Finance Nexus Forum, convened by Heifer International at the Africa Food Systems Forum, where government, financial institutions, development partners, technology companies and farmer organisations examined how to move more capital into African agriculture.
Across the continent, farmers and agricultural businesses are already adopting solutions including solar irrigation, renewable energy for cooling and processing, improved water management and other technologies that can reduce costs, limit losses and improve productivity.
But participants said the financing available often does not match the investments farmers and agricultural enterprises need to make.
For financial institutions, agriculture remains difficult to finance because revenues can be unpredictable, infrastructure is often inadequate and businesses are exposed to weather, production and market risks. For farmers and cooperatives, meanwhile, available financing may not be structured around the realities of agricultural businesses.
The result is a gap between climate solutions that could strengthen agricultural enterprises and the capital required to deploy them at scale.
An experience from Uganda’s dairy sector illustrates how that gap can be addressed.
At Migina Milk Collection Centre, solar-powered cooling has been associated with the elimination of milk losses, while the centre now chills 197,321 litres of milk each month and has recorded a 22.6 per cent increase in milk suppliers.
The significance of the investment extends beyond the solar equipment.
The model brings together the cooperative, technology provider, milk processor, commercial finance and insurance, with Heifer International providing technical and operational support.
When these elements are connected, an investment in renewable energy can improve the performance of an agricultural business while creating a stronger basis for commercial finance.
Safia Boly, Senior Vice President, Africa, Heifer International, said climate finance must ultimately reach the businesses and farmers at the “first mile”.
“If we get this right, climate finance reaches the first mile, and it arrives as credit a business can use rather than a grant it has to wait for. That is what I hope we are all working towards.”
She added that concessional capital does its real work when it is placed where it absorbs a lender’s risk, rather than simply paying for an asset.
The financing challenge is playing out across East Africa, where farmers and agricultural enterprises face increasing pressure from climate variability, rising input and energy costs and limited access to finance.
In Uganda, agriculture accounts for approximately 26 per cent of GDP, while the dairy sector is growing as a source of value addition, employment, exports and farmer incomes.
Milk is highly perishable, however, making reliable energy for cooling, storage and processing essential to the sector.
Uganda has also made significant progress in renewable energy, with renewables accounting for approximately 95 per cent of installed electricity generation capacity by the end of 2025.
The challenge now is ensuring that this energy reaches productive enterprises and contributes to economic activity in rural communities.
Opening the forum, Uganda’s Minister of State for Agriculture, Animal Industry and Fisheries, Bright Rwamirama Kanyontore, said government cannot finance agricultural transformation alone.
“The opportunity before us is to connect productive agricultural businesses, appropriate technology, reliable markets and suitable financing,” Minister Rwamirama said. “When these elements come together, climate solutions become investable opportunities capable of attracting private capital.”
The approach has implications beyond dairy.
Similar financing structures could support investments in solar irrigation, cold storage, processing and other productive-use technologies across agricultural value chains in East Africa and beyond.
Rwamirama said the next step is to move beyond individual projects and develop financing models that can be replicated across sectors.
“Our task is to connect these opportunities and move from individual successful interventions to financing models that can be replicated and scaled across the dairy sector and other agricultural value chains,” he said.
