Empowering Africa’s farmers through sustainable and climate-smart agriculture that promotes resilience, food security, and economic growth.
KTZ Scale risk-sharing guarantees help share the risk of losses on portfolios of eligible loans or other assets. Through these agreements, KTZ ScalePlatform reimburses a portion of principal losses incurred by originators like banks or corporations beyond an agreed-upon first-loss threshold. The guarantees consist of the structures below.
KTZ Scale Risk Sharing Facilities (RSFs) are agreements between KTZ Scale and originators like banks or financial institutions, where KTZ Scale reimburses a portion of principal losses incurred on portfolios of eligible assets as per an agreed risk-sharing formula. The assets must meet pre-defined eligibility criteria set at the outset. RSFs enable originators and KTZ Scale to partner in growing new business lines or expanding into target markets, sometimes collaborating with third-party sponsors.
Beyond risk sharing, KTZ Scale Platform can provide advisory services to strengthen originators' capabilities in asset origination, monitoring, and servicing across various sectors like SMEs, agribusiness, energy efficiency, and more. RSFs are suited for originators seeking credit risk protection without funding needs. However, KTZ Scale can couple an RSF with a loan if both credit protection and funding are required, accelerating portfolio growth. RSFs prove valuable when introducing new products or tapping into new consumer/business segments lacking performance data, helping originators build track records
The KTZ Scale Platform offers Value Chain Financing solutions to support small and medium enterprises (SMEs) in the agriculture, energy, and transportation sectors . This financing approach focuses on the entire value chain, from input suppliers to producers, processors, and buyers, to provide a more comprehensive and sustainable financing solution .
Through the KTZ Scale Platform, Value Chain Financing is provided through a range of financial products and services, including loans, guarantees, and advisory services . The platform's Risk-Sharing Facility (RSF) enables financial institutions to provide financing to SMEs, sharing the risk of losses and making it more feasible for lenders to support these businesses . This approach has enabled SMEs to access much-needed capital to expand their operations, improve productivity, and increase their competitiveness in the market. The Value Chain Financing offered by the KTZ Scale Platform is designed to promote sustainability and resilience in the agriculture, energy, and transportation sectors . By supporting SMEs that adopt climate-smart practices and renewable energy solutions, the platform is contributing to a more environmentally friendly and sustainable future.
Additionally, the platform's focus on women-led businesses and rural areas is promoting social inclusion and reducing poverty in these communities .
The ASL Facilitating local climate adaptation and resilience offering coaching and mentorship to enablers and overcoming investment barriers with de-risking measures and investment incentives such as guarantee funds and public-private partnerships as well as with innovative financial instruments such as green bonds and disaster funds.
While many local actors in developing countries recognise the urgent need to strengthen the resilience of the population to climate change through adaptation measures, they often lack the expertise to take action. This results in weak demand for climate financing.
The KTZ Scale Platform stimulate this demand by providing targeted technical assistance to aggregators - mainly enterprises and financial service providers that directly support vulnerable populations’ adaptation efforts. Together with local partners, the Scale loans increase the aggregators’ capacity to not only access, manage and distribute climate finance but also to offer and implement effective climate adaptation solutions.
