A crescendo of extreme weather events recently witnessed across the world clearly exposes the urgency of large-scale investment in adapting to climate change. In response to this, the Landscape Resilience Fund (LRF) has made its first investment in Koa, a Swiss-Ghanain sustainable cocoa fruit company.
The $3.5 million investment, made alongside co-investors IDH Farmfit Fund, will support Koa to set up a new processing facility in Ghana, increasing production capacity more than tenfold by 2024 and creating additional income for up to 10,000 cocoa farmers.
Founded in 2021, the LRF was co-developed by South Pole and the World Wide Fund for Nature (WWF) to create a scalable way to support meaningful climate adaptation in at-risk landscapes. This first investment advances the goals of the LRF to fund solutions that have the greatest potential to protect people and nature in landscapes facing disastrous climate change impacts.
A critical challenge for the majority of cocoa farmers in West Africa is lacking access to affordable finance so that they can invest in their farms in a way that allows them to be more resilient to the increasingly extreme weather driven by climate change. Sarah Afful, a cocoa farmer from the community Assin Ayigbo working with Koa, feels the disruption of seasonal patterns. “ I experience unusually heavy or lack of rainfall and that negatively affects my cocoa yield."
As a young social enterprise committed to sustainability and creating shared value, Koa's fresh look at the cocoa pulp as a source of value has immense potential to boost the incomes and climate resilience of smallholder cocoa farmers in Ghana. Francis Appiagyei-Poku, Finance Director of Koa Impact Ghana comments," the investment from the Landscape Resilience Fund and the IDH Farmfit Fund allows us to extend our positive impact to new cocoa growing regions in Ghana."
Appiagyei-Poku continues saying, “ by making use of the previously lost cocoa pulp, we can increase and diversify smallholder farmers' income. This investment in a new factory will create an additional income for up to 10,000 cocoa farmers. Furthermore, the new production plant will generate 250 jobs creating new vocational opportunities for communities in rural Ghana."
Koa has unlocked a new decentralised value chain around the previously unused cocoa pulp which boosts farmer income and improves climate resilience in two ways. Firstly, it provides a meaningful increase in the income of cocoa farmers, paying them on the spot while transparently recording transactions. The whole process reduces food waste by 40%, thus, enhancing the land use of cocoa farms and reducing their carbon footprint.
In this process, the cocoa pods are opened on the farm, the fruit pulp is extracted using mobile solar units in the nearby communities and then pasteurised in a local factory creating jobs in these rural communities. This novel ingredient can be used for a variety of innovative creations in the food industry from juice, chocolate, pastries, icecreams to savoury products.
Secondly, by training farmers in sustainable agricultural practices and post-harvest processing, Koa is able to reduce the environmental impact of cocoa farming. “ Increasing investment in adaptation will empower communities to better adapt to extreme weather events driven by climate change. That's what today's investment is all about — supporting an inspiring, socially and environmentally grounded business to reach even greater heights and have even more climate impact. But climate adaptation is chronically underfinanced, " says Urs Dieterich, Managing Director of the Landscape Resilience Fund.
Momentum for large-scale investments in climate adaptation is growing. The LRF will continue to invest in SMEs that enable the most vulnerable people - in specific landscapes in the Global South - to effectively adapt to climate change. Our aim is that the initial funding creates a snowball effect - for every $1 million of funding from the LRF, we hope to unlock up to $3 million additional finance from commercial investors. The LRF's active engagement has already catalysed over $5 million additional commercial investment in Koa.
As Dieterich concludes, " We must go further, faster, to ensure climate adaptation is a core pillar of our response to the climate crisis."
The LRF's landscape approach to building climate resilience unlocks positive benefits for biodiversity and gender equity. Investors and philanthropic funders interested in supporting this work can find out more here. By investing in and funding climate adaptation, you can help build climate resilience in high-risk landscapes.