Highlights

2025 was a pivotal year for the Land Use Facility (LUF), marking a transition from building foundations to scaling impact. Benefitting from an FMO loan of €240 million, partly guaranteed from the European Commission, LUF accelerated deployment. By the end of 2025, more than 40% of the €240 million allocation was committed, supported by a strong and diversified pipeline that positions the facility for full commitment in 2026 and early 2027. This rapid progress reflects LUF’s ability to combine strategic ambition with operational discipline. A typical example is the $12 million term loan with Phuc Sinh in Vietnam. The company will build a climate‑smart coffee processing plant with the proceeds of the loan.

Beyond direct investments in individual companies, LUF advanced on its aggregator approach through financial institutions. Thousands of smallholders and MSMEs were provided access to climate‑smart lending. The $10 million investments in First National Bank Zambia (FNB) illustrates this approach, as the first market-driven investment in Zambia's financial sector since several years. The innovative approach aligns risk mitigation with outreach, creating a pathway for systemic change in agricultural finance.

Internally, LUF added value to its balance sheet and governance, implementing enhanced financial reporting and liquidity planning to support accelerated deployment. Engagement with external stakeholders intensified: LUF deepened collaboration with EU services and Delegations and maintained structured dialogue with MoFA.

Lessons from the external evaluation were integrated into pipeline selection and reporting, sharpening focus on gender inclusion, vulnerable communities, and robust monitoring frameworks. These actions underscore LUF’s commitment to continuous learning and adaptive management.

In essence, 2025 was a year of acceleration, innovation, and leadership for LUF: mobilizing resources at scale, delivering transformative investments, and shaping the future of climate finance through collaboration and strategic foresight.

For more information we refer to the general DFCD Annual Report 2025.