This is a presentation on financing investment in climate resilient enterprises by Sarah McIvor, a researcher at the International Institute for Environment and Development (IIED). It focuses on how you can work with small and medium enterprises to develop climate-resilient value chains, including a case study from Zanzibar.

1. 1
Author name
Date
COP24, 5th December 2018
FINANCING INVESTMENT IN CLIMATE
RESILIENT COOPERATIVE ENTERPRISES

2. 2
Why focus on Cooperative
Enterprises and SMEs?
- Paris Agreement recognises potential of private
sector to create enabling conditions for inclusive
and sustainable economic growth.
- Small-Medium Enterprises (SMEs) represent up to
90% of Private Sector in developing countries.
- However, many SMEs are dependant on natural
resource base for livelihood, highly vulnerable to
climate impacts.

3. 3
Working with SMEs to develop Climate Resilient
Value Chains
1. Assessment
of Climate
Risks along
Value Chain
2. Identification
of options to
build Climate
Resilient Value
Chain
3.Development
of Climate
Resilient
Business Plans
4. Source
innovative
financing for
investment and
scale up
5.
Implementation
and review of
Climate
Resilient
Business Plans
Monitoring,
Evaluation and
Learning

4. CLIMATE RESILIENT ENTERPRISES
Current Challenges
1. Lack of local access to climate finance
2. Climate risk management not integrated into existing
financial systems
3. Increasing frequency and magnitude of climate induced
hazards
4. Climate impacts being felt on a number of cooperatives-
increase in sea temperature impacting seaweed; change
in precipitation and temperature impacting lime and
honey production
Example: Cooperative Enterprises in
Zanzibar
Government of Zanzibar Response
1. Climate Change Strategy - Vision of placing Zanzibar on a
path to develop a climate resilient, low carbon,
sustainable society.
2. Draft LAPA notes the high dependence of economies and
livelihoods on climate sensitive environmental and natural
resources, recognises the urgent need to address this
adaptation deficit.

5. CLIMATE IMPACTS ON PRODUCTION
Increase in temperature & sunny days is
associated with an increase in sea surface
temperature. This has contributed to a decline
in quantity and quality of shallow water
seaweed production.
CLIMATE IMPACTS ON PROCESSING
Increased exposure to variable
rainfall during drying causes
seaweed to rot.
CLIMATE IMPACTS ON MARKETING
Export quota and price determined by global
markets. Climate change can impact both the
quota and price. For instance, typhoons in
Indonesia resulted in increased demand and
price of Zanzibari seaweed.
1. Identification of Climate Risks to Value Chain

6. Climate
resilient
households &
local economy
IMPACT
Assets: Seeds & deep-sea
farming tools & boats;
Institutions: R&D and
governance systems
Assets: Drying sheds and
mats to dry seaweed;
Machinery to process
seaweed
Institutions: Climate smart
skill development
Regulation: To support
cooperative led climate
resilient enterprises
Revolving fund: To enable
access to finance
Partnerships: To strengthen
capacity and collaboration
for effective marketing
INPUT
Climate resilient
production
OUTCOME
Sustainable
and
financially
viable
seaweed
enterprise
Climate resilient
processing
Improved seed quality
Strengthened capacity,
equipment & systems
for deep sea farming
Good quality dry
seaweed
OUTPUT
Strengthened capacity
of cooperatives to buy
seaweed in bulk & sell
to companies
INTERMEDIATE
OUTCOME
Climate resilient
marketing
Strengthened
infrastructure &
capacity to process dry
seaweed
Strengthened capacity
of companies to
compete in global
market
2. Identification of Options to build a Climate Resilient Value Chain

7. 3. Development of Climate Resilient Business Plans

8. ROLE OF FINANCIAL INTERMEDIARY
1. Access & deliver multiple sources of climate
finance;
2. Manage fiduciary risks on behalf of investors;
3. Procure climate resilient goods & services on
behalf of cooperatives;
4. Provide financial services to cooperatives,
including: retail banking (Islamic banking)
and cashless services
5. Provide training to cooperatives
SOURCE OF CLIMATE FINANCE
International &
national public finance
International &
national private finance
NATIONAL FINANCIAL INTERMEDIARY
COOPERATIVE
FINANCIAL PLANNING SYSTEMS
1. Governance systems;
2. Policy frameworks;
3. Risk assessment systems
to support climate responsive investments
FINANCIAL MANAGEMENT SYSTEMS
1. Financial instruments;
2. Audit & reporting systems;
3. Procurement systems
to manage climate responsive investments
ROLE OF COOPERATIVES
1. Develop & implement climate resilient
business plans
2. Establish & sustain climate resilient revolving
fund
4. Source Innovative Finance
for Investment and scale up
REVOLVING FUND

9. FINANCIAL
PLANNING
SYSTEMS
1. Governance
systems;
2. Policy
frameworks;
3. Risk
assessment
systems
to support climate
responsive
investments
CLIMATE SMART
FINANCIAL SYSTEMS
CLIMATE RESILIENT
COOPERATIVE
ENTERPRISES
CLIMATE
RESILIENT
HOUSEHOLDS
CLIMATE RESILIENT
LOCAL ECONOMY
FINANCIAL
MANAGEMENT
SYSTEMS
1. Financial
instruments;
2. Audit & reporting
systems;
3. Procurement
systems
to manage climate
responsive
investments
Climate resilient
production,
processing and
marketing models
through aggregation
to improve return on
investment &
sustainability of
seaweed, lime and
honey cooperative
enterprise.
Improved
income,
assets and
capabilities
Improved
production,
institutions &
labour
market
5. Implementation of Climate Resilient Business Plans
Continuous Monitoring, Evaluation and Learning during design, development and
implementation of Climate Resilient Business Plans allows for flexibility, review and investment
into new areas to build climate resilience as they arise.

10. 10
Working with SMEs to develop Climate Resilient
Value Chains
1. Assessment
of Climate
Risks along
Value Chain
2. Identification
of options to
build Climate
Resilient Value
Chain
3.Development
of Climate
Resilient
Business Plans
4. Source
innovative
financing for
investment and
scale up
5.
Implementation
and review of
Climate
Resilient
Business Plans
Monitoring,
Evaluation and
Learning

11. 11
Author name
Date
sarah.mcivor@iied.org
Thank you.