**4. Climate policy and financing in Zimbabwe**

There are a number of national policies in Zimbabwe that focus on climate and the broader environment. Zimbabwe has a National Climate Response Strategy (NCRS) supporting the National Climate Policy while consultations on the development of National Adaptation Plan (NAP) are on-going. The country has also submitted its Nationally Determined Contributions (NDCs) to the UNFCCC.

The National Climate Change Response Strategy provides a framework for a comprehensive and strategic approach on aspects of adaptation, mitigation, technology, financing, public education and awareness. It will help to inform Government on how to strengthen the climate and disaster risk management policies.

<sup>5</sup> Such training may not be as intensive in the lease based model given that the large firm already brings in the technical expertise.

The Zimbabwe National Climate Policy explains that Zimbabwe seeks to create a pathway towards a climate resilient and low carbon development economy in which "the people have enough adaptive capacity and continue to develop in harmony with the environment". To achieve this, the Climate Policy is supported by the National Climate Change Response Strategy, National Adaptation Plan, the Low Carbon Development Strategy, National Environmental Policy and Strategic Document as well as other policies aimed at achieving sustainable development. The actions envisioned in the Policy will "safeguard the Zimbabwean natural environment, sustain society, and support the economy for the years ahead". "Adequate financing, cross sectoral coordination, climate change science, research and systematic observations will form the backbone of actions towards a climate resilient Zimbabwe" (NCP, 2016:2).

It is the vision in the National climate policy to "climate-proof" all the socio-economic development sectors of Zimbabwe in order to reduce Zimbabwe's vulnerability to climate and climate related disasters, while at the same time developing along a low carbon pathway (NCP, 2016:2). Zimbabwe aims to reduce per capita emissions by 33% from "business-as-usual" baselines by 2030 (NCP, 2016:4). This ambition is based on the availability of financial resources and technology transfer from bilateral and multilateral funding mechanisms in addition to domestic financing.

#### **4.1 Costs of climate change financing**

The Development Bank of Southern Africa estimate the costs of climate change adaptation to be US\$9.9 billion. The costs to agriculture are almost US\$2.4billion [2]. Evidently, the climate risk mitigation and adaptation options discussed in the previous section require financial and technical resources to come to fruition. The potential sources of finance within and outside Zimbabwe are discussed below.

The Zimbabwean agro-food sector has undergone major changes ever since the fast-track land reform programme (FTLRP). These changes influenced new models of production, marketing and financing [19]. Access to external financial capital for the majority of participants remains limited. If available it is costly and inequitably distributed thus, severely limiting the productivity and competitiveness of the majority rural SHFs [20–22].

The changing agricultural environment in Zimbabwe has come with a drought of the typical financial products and services for agricultural production that were previously designed for large scale commercial farmers [23]. According to Sachikonye [24], financial intermediaries lack depth and understanding of the rural SHFs who in most cases have non-liquid assets that are not recognised by conventional financial markets. As such, conventional thinking is that the agricultural sector (particularly the SHF) is too costly and risky for lending [24–26].

Biyam [23] notes that commercial banks have traditionally shied away from the rural smallholder agricultural sector because of uncontrollable and systemic risks, higher costs and fear of the unknown. The cost of directly lending to rural smallholder farmers in hard-to-reach rural areas with less-educated and low-income populations has become prohibitive to most formal financial institutions [25, 27]. Microfinance institutions that loan cash to these low-income households do so at a high cost, with short-term loan products that are generally not able to address the full range of agricultural needs of the rural SHFs [25].

#### *4.1.1 Financing for SHF and related stakeholders outside Zimbabwe*

The most important multilateral sources of climate financing at the international level are the World Bank's carbon funds, the Global Environment Facility

### *Climate Change Risks in Horticultural Value Chains: A Case Study from Zimbabwe DOI: http://dx.doi.org/10.5772/intechopen.97211*

(GEF)—recently supported the development of the Zimbabwe NAP—, the African Development Bank (AfDB), African Sustainable Forestry Fund, the United Nations Framework Convention on Climate Change (UNFCCC's) Adaptation Fund, the Green Climate Fund (GCF)—which is a financial mechanism of the UNFCCC and the Kyoto Protocol's Clean Development Mechanism.

Pswarayi-Jabson [28] noted that there is limited funding that private entrepreneurs and CSOs can access in the global climate management mostly because most of these organisations tend to compete rather than work together to access such financial resources. Local private organisations and CSOs in Zimbabwe are often prevented from accessing climate funds directly due to the large size of available grants, donor partner preference and the absence of an enhanced direct access mechanism [28]. The above is mostly because Zimbabwe currently does not have institutions accredited as a National Implementing Entity, so as to access direct to the GCF. However, efforts are being made to have the Environmental Management Agency (EMA) and the Infrastructure Development Bank of Zimbabwe (IDBZ) accredited with the GCF as implementing entities. Such accreditation would deal with access to finance challenges such as failure to meet global fiduciary standards; misalignment of financing application with other institutional arrangements and requirements of climate funding such as the GCF, GEF and IFC/ World Bank and lack of expertise in packaging of green projects, with particular focus on mainstreaming of climate issues. Nonetheless, the NCRS [2] notes that Zimbabwe has received modest funding from, for example, multilateral organisations (such as UNDP, UNICEF, UNEP; GEF; GEF Small Grants Programme and FAO); international organisations (such as the Global Water Partnership); regional organisations (e.g. COMESA); private organisations (such as the Evangelischer Entwicklungsdienst); and research funding organisations (e.g. IDRC and DFID). However, most of the climate finance has come from the Government [2].
