Food Systems Investment Framework

The problem: Financing Gap

Most climate hazards impacting the world’s poorest smallholder farmers are water-related, including unpredictable rainfall, droughts, floods, and rising sea levels. These risks are particularly concerning as agriculture and food processing are vital economic pillars for many developing countries—representing over 25% of GDP in some African nations and providing livelihoods for 70% of the world’s poorest populations. Smallholder farms, which supply 30–40% of global food production and primarily depend on rainwater, are especially vulnerable. To sustainably feed a projected global population of 10 billion by 2050, it is critical to scale up investments in water and food systems. However, current annual financing gaps—estimated at $182–664 billion for water-related infrastructure and $300–350 billion for food systems—highlight a staggering overall shortfall of $500 billion to $1 trillion.

This massive investment gap surpasses the fiscal capacity of many resource-constrained countries, making it difficult to build climate-adapted, water-resilient food systems without external support. Without adequate financing, climate change continues to destabilize water availability, degrade biodiversity, and undermine ecosystem health—threatening the reliability and productivity of agriculture. The IPCC reports a 50% increase in rainfall variability over the past five decades, making water systems increasingly erratic and unpredictable, while water contamination grows. In this context, investing in resilient food and water systems is not only a necessity for climate adaptation but also a strategic opportunity to drive co-benefits across food security, infrastructure protection, natural capital preservation, and sustainable economic growth.

The solution: an Integrated Investment Framework

The integrated investment framework presents a “4 by 4” model to overcome key structural and design barriers in financing climate-adaptive, water-resilient food systems. Its core components—Benefit, Bundling, Building for Bankability, and Blending—promote equitable access, align investments with national priorities, improve project viability, and mobilize public-private capital. The framework is operationalized through four priority investment pathways: regenerative agriculture, landscape-based approaches, patient finance for large-scale infrastructure, and natural capital finance for wetland conservation. These pathways aim to strengthen food systems, protect natural resources, and attract diverse funding by aligning financial returns with climate resilience and sustainability goals.

Impact

The Integrated Investment Framework offers a transformative approach to reorient investment strategies toward climate-resilient food systems by advocating for a strategic realignment of policies and funding. To operationalize this shift, it introduces a financial execution model that supports capital deployment across three key areas: (a) Policy and Data, which fosters an enabling environment; (b) Investment Origination, which standardizes project design and incorporates integrated water management; and (c) Financial Structuring, which leverages innovative instruments to attract diverse capital for long-term sustainability. Together, these components enable a more coordinated, resilient, and sustainable approach to global food system investments.

The Food System Investment Planning Supplement, building on the Climate Investment Planning and Mobilization Framework, addresses these issues by guiding stakeholders in mobilizing effective climate finance towards resilient food systems. (Available here)