Alicia Ferrer, World Bank executive: “Agribusinesses will play a vital role in sustainable economic recovery”.
The IFC Senior Investment Officer, of the World Bank, announced that the entity approved a green loan of US$ 80 million for Latin American SMEs with renewable energy or water efficiency projects. Ferrer explains that the aim is to improve access to financing and strengthen agricultural supply chains that have been weakened by COVID-19.
The International Finance Corporation (IFC), a member of the World Bank Group, will provide a million-dollar loan to support SMEs and agribusinesses in Latin America and the Caribbean to adopt and improve projects aimed at more efficient water use, sustainable practices, and renewable energy generation.
This is a green loan of US$ 80 million to the Latin American Agribusiness Development Corporation (Laad), a private investment and development company focused on financing agribusiness projects on our continent.
The IFC financing package includes a US$ 50 million, a seven-year loan from IFC’s own account, and another loan mobilized from Symbiotics SA for US$ 30 million. It is primarily focused on strengthening agricultural supply chains that have been weakened by the Covid-19 pandemic.
Alicia Ferrer, Senior Investment Officer at IFC, explains that this instrument will be of key importance to support and promote green agriculture, at a time when it is vital to act proactively in this type of initiative.
“In the absence of such investments, climate change could have material impacts on food security and agribusiness value chains. IFC financing enables Laad’s clients to implement measures that contribute to the resilience, low emissions, and efficiency of small and medium-sized agribusinesses,” Ferrer reinforces.
How much has COVID-19 affected agricultural supply chains in Latin America and the Caribbean (LAC)?
While the impact of the pandemic has yet to be felt, the effects on agriculture and food systems in LAC unfold in multiple dimensions. Primary production has proven to be remarkably resilient, in the sense that most farmers and ranchers have continued to produce. On the other hand, challenges have also emerged in the supply chain, as the flow of many food products has been interrupted by mobility constraints that have led to distribution bottlenecks or prevented the redirection of food flows due to the closure of some sectors of the economy.
Despite all these roadblocks, what role will Latin American and Caribbean agribusinesses play in the new post-Covid world?
There is no doubt that agribusinesses will play a vital role in the sustainable economic recovery of Latin America and the Caribbean, safeguarding the region’s food supply, providing employment for millions, generating income in food-exporting countries, improving the balance of trade in importing countries, and restoring the ecosystem services on which the long-term well-being of the planet depends.
Are we still in time to support climate-smart developments, or are we already entering an environmental non-return phase?
The window of opportunity to avoid warming above 1.5 degrees Celsius is closing fast, so we need to act today. The latest IPCC report provides new estimates of the chances of crossing the 1.5 °C global warming level in the coming decades and finds that unless there are immediate, rapid and large-scale reductions in greenhouse gas emissions, limiting warming to around 1.5 °C, or even 2 °C, will be out of reach.
Have you noticed any setbacks in food production using sustainable techniques in Latin America as a result of the pandemic?
Latin America is a major player in the food supply chain and, despite the challenges imposed by the pandemic, its enthusiasm and efforts to continue to contribute to feeding part of the world’s population have not waned. And as the population grows, so will the demand for food.
And how far are we in Latin America from implementing sustainable agriculture on a par with that of developed countries?
Sustainable agriculture is constantly evolving, even in developed countries. A fundamental requirement for its development, in addition to technology, is the collection of detailed data on agribusinesses, soil chemistry, hydrology, productivity by species, etc. Latin America is in this process.