Unlocking the future of agrifood: from risk mitigation to value creation
The reality is clear: the agrifood sector faces a significant financing gap. Investments in this space are often framed as “risk mitigation” strategies, focused on cutting future regulatory costs or minimising uncertainties. Yet, capital isn’t flowing at the scale needed, largely due to a mismatch in both capital and liquidity.
But what if we flipped the narrative? What if agrifood investments were seen not as a means to avoid risks, but as opportunities to unlock value? By embracing this perspective, we can achieve not only financial returns but also resilience, economic growth, and environmental benefits. Here’s how we can turn this vision into reality.
To unlock this value, we must focus on three key areas:
1. Building understanding: the foundation of transition
Transitioning to sustainable agrifood systems requires a deep understanding of local contexts, value chains, and technical needs. Regenerative practices, for example, might appear uncertain or costly in the short term, but their long-term potential is undeniable. While returns may not align with traditional crop cycles, the benefits – improved soil health, reduced environmental impact, and enhanced productivity are substantial.
The challenge is that financing in emerging markets often prioritises short-term gains, while transition finance demands long-term commitment. This dynamic can deter both lenders and investors. However, solutions do exist. In Brazil, for instance, AGRI3’s partnership with Rabobank introduced a 10-year regenerative loan product featuring flexible grace periods. This innovative approach demonstrates that long-term financing is not only possible but also essential for sustainable transitions.
2. Turning uncertainty into opportunity
The UN Sustainability Development Goals require massive capital investments, yet the path forward is riddled with uncertainties. Emerging market opportunities often appear too novel, risky, or small for traditional investors. High transaction costs and perceived barriers further discourage engagement.
However, uncertainty can be reframed as opportunity. In India, our partnership with HSBC is driving climate-smart agriculture loans and funding innovative technologies. By leveraging AGRI3’s expertise, HSBC ensures these projects are underpinned by cutting-edge science. This is more than sustainable finance, it’s about reimagining value chains to create shared, long-term benefits.
This approach highlights a critical insight: while challenges exist, they can serve as catalysts for innovation and collaboration.
3. Building bridges to scale
Scaling sustainable agrifood investments requires clarity, actionability, and strong connections to international capital markets. While impact investing often emphasises piloting new models, we must go further. Diverse financial incentives and systemic approaches are needed to drive scalable and meaningful change.
As a practice leader, AGRI3 exemplifies how to achieve this. By mitigating perceived risks, it enables institutional investors to contribute to systemic transformation. Equally important is investing in human capital. Many farmers initially hesitate to adopt sustainable practices, unsure of their long-term value. But as they see results, improved yields, healthier ecosystems, and financial gains, they become champions of change.
Finally, the importance of legacy cannot be overlooked. By demonstrating that sustainable rural livelihoods are sources of pride and prosperity, we encourage and inspire younger generations to engage with and sustain these efforts.
Embracing capital mismatch as opportunity – As we look ahead, one pressing question remains: can we shift from viewing the capital mismatch as a barrier to embracing it as an opportunity for value creation?
The answer lies in our collective willingness to innovate, collaborate, and invest in a sustainable future. By building understanding, embracing uncertainty, and scaling transformative solutions, we can create agrifood systems that drive economic prosperity and environmental healing.
The opportunity is here and clear. The question is: are we ready to seize it?
Deniz Harut, CEO & Managing Director, AGRI3 Fund
About the Author – Deniz Harut is CEO & Managing Director of AGRI3 Fund. Deniz brings a wealth of expertise from nearly 15 years at Standard Chartered, where she spearheaded sustainable finance initiatives, including organising USD 5 billion in blended finance for emerging markets and leading billion-dollar sustainability-linked deals. Now, at AGRI3, Deniz continues to drive innovation in sustainable finance, creating pathways for sustainable agriculture that balance profitability with environmental stewardship. Her mission is to build bridges between financial institutions, governments, and businesses to transform the future of agriculture for the better.
About AGRI3 Fund – AGRI3 is a specialised blended finance vehicle with a bold mission: to transform agrifood systems in emerging economies. We work with global financial institutions and corporations to combat nature loss and restore land. Through our commercial fund and technical assistance, we take on risks that others won’t, addressing barriers many investors face. But we do more than just de-risk – we create lasting value.
