Highlights
Investment Focus
In 2024, the Land Use Facility (LUF) of the Dutch Fund for Climate and Development (DFCD) continued to prioritize investments in agroforestry, sustainable land use, and climate-resilient food production in emerging markets and developing countries. This strategic focus was designed to address the dual challenges of climate change and food security. By investing in projects that promote sustainable agricultural practices, the LUF aimed to enhance the resilience of local communities to climate impacts, while also improving their livelihoods. These investments targeted fostering long-term sustainability and environmental stewardship in regions most vulnerable to climate change.
Production
The year 2024 marked significant progress in the implementation of various projects under the LUF. Several initiatives that were in the origination phase in previous years, successfully transitioned to being taken up by the investment teams. Projects on reforestation, sustainable farming, restoration of degraded land, and (indirect) investments in climate relevant SMEs, will underwrite the LUF mandate. These initiatives contribute to carbon sequestration, and enhance climate resilience, with job creation and sustainable use of land.
Partnerships and Collaborations
Strengthening partnerships and collaborations was a key focus for the LUF in 2024. The facility worked closely with local and international organizations to enhance its capacity to deliver impactful projects. These alliances have been instrumental in leveraging additional resources, expertise, and networks, thereby amplifying the reach and effectiveness of the LUF’s initiatives. By fostering strong partnerships, the LUF ensures that its projects are well-supported and aligned with broader development and climate goals.
Financial Milestones
One of the significant financial milestones achieved by the LUF in 2024 was the signing of a guarantee agreement with the European Commission under their EFSD+ program (‘DFCD Aya’). This partial guarantee secured EUR 240 million of additional funding from FMO to support future projects and bolster the facility’s financial stability and capacity to undertake larger and more ambitious initiatives, mobilized via the initial capital provided by the Dutch Ministry of Foreign Affairs. This financial backing is crucial for scaling up successful projects and thereby catalyze private finance locally and replicate them in other regions. Throughout the report, we will refer to DFCD Aya instead of the LUF.
Pipeline Development
Developing a robust pipeline of projects was another highlight for DFCD Aya in 2024. A well-defined pipeline ensures a steady flow of investments into sustainable land use initiatives, maintaining momentum and continuity in the facility’s efforts. The pipeline includes a diverse range of prospects, from small-scale community-based initiatives to large-scale programs via aggregators. In particular the aggregator model via Financial Institutions and investments in funds with a strategic fit to DFCD Aya become more prominent in the pipeline, and suits the scalability ambitions of the European Commission.
Impact and Future Outlook
The achievements of DFCD Aya in 2024 underscore its critical role in promoting sustainable land use and climate resilience. Looking ahead, DFCD Aya aims to expand its reach and impact by leveraging its strong partnerships and financial backing. As the main focus of 2024 was the signing of DFCD Aya, the main focus of 2025 will be the deployment of the new funding. The facility plans to support even more transformative projects, focusing on innovative solutions and scalable models that can be replicated across different regions. By continuing to prioritize sustainability and resilience, DFCD Aya is well-positioned to make a lasting difference in the fight against climate change.
For more information we refer to the general DFCD Annual Report 2024.