Funding and subsidiary agreements signed on the same day between GCF, FAO, and Government of Cambodia, accelerating implementation of a new climate resilient agricultural project in Cambodia

  • Article type News update
  • Publication date 21 Mar 2023

The Green Climate Fund (GCF) and the Food and Agriculture Organization of the United Nations (FAO) have signed a project agreement, referred to as a Funding Activity Agreement (FAA) to rapidly begin the implementation of a USD 42.9 million project (with USD 36.2 million in GCF financing) that will increase the climate resilience of agricultural production in the Northern Tonle Sap Basin (NTSB), one of Cambodia's most important agricultural regions. For the first time in GCF history, the Subsidiary Agreement between FAO and Cambodia was signed just minutes after the FAA, marking the speed of project disbursement and implementation. 

The Northern Tonle Sap Basin (NTSB) is one of Cambodia's most important agricultural regions, yet highly vulnerable to the impacts of climate change, especially flooding and droughts. The Basin has been experiencing annual temperature increases for over 70 years and precipitation is generally decreasing resulting in huge climate variability, particularly during the rainy season. These anticipated impacts of climate change will likely affect the key crops in the Basin, mainly cashew, mango, rice, and vegetables.

To address Cambodia’s food security, GCF and FAO partnered together for a USD 42.9 million project with USD 36.2 million in GCF financing, to increase the climate resilience of agricultural production in the Basin by employing three main components: climate foresight, market incentives, and an enabling environment.

The local farmers’ capacities to manage climate impacts will be enhanced through an innovative climate-resilient agricultural asset acquisition mechanism which will encourage local ownership over climate adaptation efforts. At the same time, the Agriculture and Rural Development Bank (ARDB) of Cambodia will be strengthened to ensure that lending capacities are developed and equipped with the needs of the smallholder farmers in this crucial region. The project is designed with local farmers, especially women, and agri-ecosystems in mind and is estimated to directly benefit 450,000 people with another one million helped indirectly.  

The legal agreement – called a Funded Activity Agreement (FAA) - was signed immediately following GCF’s most recent Board meeting where the funding proposal for the project was approved.

Yannick Glemarec, GCF Executive Director said, “I’m deeply grateful to the people of Cambodia, and to all our partners who have been working with GCF to make this happen. I hope this project will change the life trajectory of farmers in Cambodia, and I hope they will be able to increase the opportunities of their children in the face of climate change.”  

Nadine Valat, FAO Senior Coordinator said, “I cannot help but think about the small-scale farmers and the communities whom from day one have been associated to this project and will benefit from the GCF project to meet their specific needs. Thank you GCF for making this possible,” She added, “Four hundred and fifty thousand farmers and local value chain actors in the Northern Tonle Sap Basin will see their livelihoods improved thanks to better access and leveraged market opportunities available. After the signing of the subsidiary agreement, FAO will be ready to start the implementation of the project. We look forward to working with the government and civil society organisations in Cambodia to reach the impact we have set out for ourselves.” 

Just minutes after the signing of the FAA, the Subsidiary Agreement, a crucial part of the framework between the Accredited Entity (AE) and the country, was signed between FAO and the Government of Cambodia. Normally, the Subsidiary Agreement is a lengthy negotiation process between the AE and the country as it sets the critical foundation of the project. However, for the first time, since the inception of GCF, both the FAA and Subsidiary Agreement were signed on the same day. This means the project can move faster towards first disbursement implementation, a huge step in the right direction as it sets the positive precedence for future projects to reach the same milestone. 

His Excellency, Eang Sophalleth, Secretary of State, Cambodia said, “The approval of this project is a landmark for Cambodia after several years of efforts and reflects our strong partnerships in securing climate finance and addressing the urgent needs of the most vulnerable people in the face of climate change.” He added, “On behalf of the Government of Cambodia and the Cambodian population, I’m looking forward to working with you to ensure the successful implementation of the project to benefit small-holder farmers and vulnerable populations.” 

Upon signing the Subsidiary Agreement, Rebekah Bell, FAO Representative in Cambodia said: “We look forward to the quick start of this project and the next six years of a growing partnership between FAO and the Ministry of Environment. We have already started on our next GCF proposal, which takes on a new level of ambition.”