The BIFT aims to derisk private investments in underserved food system segments, fostering transformative agricultural investments through innovative blended finance solutions.
As the global food system faces mounting challenges, from supply chain disruptions to the impacts of climate change, innovative financial solutions are becoming essential to ensure food security and sustainability. One such initiative is the Business Investment Financing Track (BIFT), launched by the Global Agriculture and Food Security Program (GAFSP). This new track aims to derisk private investments, making it easier for investment vehicles to mobilize additional finance for high-potential but traditionally underserved segments of the food system.
The BIFT comes at a critical time when the agricultural sector requires increased investments to address climate risks, build resilient food systems, and support economic growth. With a focus on blended finance solutions, the BIFT seeks to attract private investors to support transformative agricultural projects in regions and value chains that have historically been neglected due to perceived risks and low returns.
GAFSP’s Legacy in Supporting Global Food Security
GAFSP, established by the G20 in 2010, is a multilateral partnership platform that has mobilized over US$2.5 billion in donor resources to finance global food and nutrition security. Over the years, GAFSP has created a global portfolio of 300 projects, benefiting more than 20 million people worldwide. These projects span a wide range of initiatives targeting low-income country strategies, agribusinesses, and producer organizations. The introduction of the BIFT is an extension of GAFSP’s ongoing efforts to support underserved areas of the food system.
The BIFT adds to GAFSP’s existing financing tracks, with a specific focus on incentivizing investments in segments that have been underserved by financial markets, such as smallholder farmers, producer organizations, and early-stage agribusinesses. These players are often seen as too small or too risky to attract conventional financing, but they hold immense potential for driving sustainable food production and strengthening local economies.
Blended Finance Solutions: A Key Pillar of the BIFT
The BIFT aims to deploy innovative blended finance solutions to make agricultural investments more attractive to private investors. Blended finance refers to the use of public or concessional resources, such as grants, guarantees, and concessional debt, to mitigate risks and leverage private sector financing. This approach helps to bridge the gap between high-potential projects in underserved regions and the private capital needed to bring them to scale.
Through the BIFT, GAFSP will support investments in nutritious food value chains by building on strategic public investments. The track emphasizes the importance of public-private partnerships, civil society engagement, and co-financing platforms that aggregate funding from various investors, including impact investors, asset managers, and banks. These partnerships aim to create larger, more impactful programs that address the specific needs of small producers and agribusinesses in low-income countries.
According to James Catto, Director of International Development Policy at the United States Department of the Treasury and Chair of the GAFSP Steering Committee, “High-potential agri-MSMEs in lower-income countries are being left behind by financial markets and have no way of breaking into regional or global markets. The BIFT will deploy systemic solutions tailored to the needs of small producers and early-stage agribusinesses so they can achieve scale and tap into conventional financing.”
Addressing the Financing Gap for Smallholder Farmers and MSMEs
One of the main goals of the BIFT is to address the financing gap that smallholder farmers, micro, small, and medium enterprises (MSMEs), and agribusiness start-ups face. These segments are often viewed as too risky by traditional financial institutions, leading to a lack of investment in their growth and development. However, these very segments hold the key to improving food security, enhancing climate resilience, and boosting economic opportunities in some of the world’s most vulnerable regions.
Blended finance solutions, such as concessional debt, equity, and guarantees, will play a crucial role in attracting private investments to these segments. By reducing the risk for investors, the BIFT aims to unlock much-needed capital that can help smallholder farmers and agribusinesses scale their operations, improve productivity, and access new markets.
The BIFT pilot will run until June 2026, in partnership with key financial institutions, including the African Development Bank, Asian Development Bank, International Finance Corporation, IDB Invest, and the UN’s International Fund for Agricultural Development (IFAD). Together, these organizations will work to create sustainable investment opportunities that benefit both small-scale producers and the broader food system.
The Role of Public-Private Partnerships and Civil Society Engagement
Public-private partnerships (PPPs) will be central to the success of the BIFT. By bringing together governments, civil society organizations, and private investors, the BIFT aims to create a collaborative ecosystem that supports long-term agricultural development. These partnerships will help to ensure that investments are aligned with national strategies for food security and climate resilience while addressing the unique challenges faced by smallholder farmers and agribusinesses.
In addition to PPPs, the BIFT will promote civil society engagement to ensure that the needs of local communities are considered in the design and implementation of agricultural investments. By involving non-governmental organizations (NGOs) and producer organizations, the BIFT seeks to create more inclusive and sustainable value chains that benefit all stakeholders.
A Path Toward Long-Lasting Solutions
Felipe Dizon, Acting Program Manager of the GAFSP Fund at the World Bank, highlights the significance of the BIFT: “BIFT is a significant step forward in addressing the smallholder financing gap by unlocking much-needed private capital. This is not just about financing projects; it is about working with a range of partners, from government to civil society to the private sector, to create long-lasting solutions that improve food security, climate resilience, and economic opportunities across some of the world’s most vulnerable regions.”
By leveraging blended finance solutions and fostering public-private partnerships, the BIFT is positioned to create systemic changes in how the food system is financed. Its focus on underserved regions and value chains, coupled with its commitment to inclusive development, will be critical in driving meaningful progress toward global food security and sustainability.
Conclusion: Transforming Agricultural Investment
The BIFT represents a bold new approach to agricultural financing, one that aims to unlock private capital for high-potential, underserved segments of the food system. By derisking investments and fostering collaboration between public and private stakeholders, the BIFT has the potential to create long-lasting, transformative impacts on food security, climate resilience, and economic development.
As the BIFT pilot moves forward, its success will depend on the continued collaboration of governments, financial institutions, civil society, and the private sector. Together, these stakeholders can drive the systemic changes needed to build a more resilient and sustainable global food system.
