Announced at COP31, this first global adaptation bond focused on rural communities, opens a channel for private capital to support small-scale farmers to adapt to climate change.
©IFAD/Aubrey Wade
The International Fund for Agricultural Development (IFAD) today announced a US$70 million climate adaptation bond privately placed with Japanese agricultural cooperative insurer Zenkyoren. Announced at COP31, this first global adaptation bond focused on rural communities, opens a channel for private capital to support small-scale farmers to adapt to climate change.
Proceeds of the note, which was issued under IFAD’s Sustainable Development Finance Framework, will help finance IFAD’s rural development project investments worldwide, supporting climate adaptation for small-scale farmers and more resilient rural economies.
The bond responds to a large gap in funding for adaptation. Developing countries will need an estimated US$305 billion annually by 2035 for adaptation, while international public adaptation finance reached just US$28.2–31.7 billion in 2024. Small-scale farmers produce one-third of the world’s food but receive less than one per cent of climate finance. Closing the gap will take additional funding, including private investment.
This landmark bond demonstrates that climate adaptation is investable and that private capital can be mobilised at scale to finance rural resilience. We thank Zenkyoren for its leadership and partnership in advancing a climate-resilient, food-secure future in which rural communities can adapt, build resilience and drive economic growth and development.
IFAD is rated AA+ and is the only United Nations fund authorised to issue sustainable bonds on capital markets. It has issued over US$1 billion in sustainable bonds since 2022.
Dedicated adaptation and resilience bonds remain rare, particularly in agriculture, where issues have mostly been limited to national or regional markets. Sustainable and green bonds direct an estimated US$69 billion a year to adaptation and resilience, a fraction of the US$6.8 trillion sustainable debt market.
This bond is an important milestone. We want it to open a broader market for adaptation bonds, particularly in agriculture. That market will only grow if investors are confident their money delivers measurable results. With nearly five decades of experience in rural development, climate adaptation and impact measurement, IFAD is helping set the standards and accountability that make that possible.
Climate adaptation is embedded across IFAD’s investment portfolio. IFAD turns global climate finance into practical resilience for small-scale producers and rural communities, while de-risking private investment and increasingly connecting capital markets with rural communities. Dedicated climate finance through IFAD’s Adaptation for Smallholder Agriculture Programme (ASAP) complements this mainstreamed approach, helping test and scale adaptation solutions through IFAD’s broader financing platform.
