Climate risk financing: Building resilience for Pakistan's agrifood sector

A cycle of climate risks 

Pakistan’s agricultural sector stands at the frontline of the climate crisis, with escalating cycles of drought and flooding causing an estimated $4 billion USD in annual losses. The catastrophic 2022 floods displaced 33 million people; in Punjab, rising temperatures and unpredictable monsoons exacerbate environmental risk. Without adaptive strategies, livelihoods connected to the agriculture sector are at risk.

A new program, funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) and supported by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, introduces climate risk financing solutions tailored to agrifood value chains. These will cover the entire value creation process from the agricultural production stage to processing, transport, storage, packaging and delivery. Increasing production, improving value addition and market linkages could significantly boost Pakistan’s agricultural exports. However, yield gaps and climate risks have hindered growth and innovation. By providing financial protection and fostering investment in innovation, quality and market access, this initiative aims to de-risk investments, strengthen resilience and enhance the inclusiveness and competitiveness of Pakistan’s agrifood sector.