Background
Burundi is one of the world’s most climate-vulnerable countries, with an economy that depends heavily on agriculture. The sector contributes around 30% of GDP and employs nearly 90% of the labour force, most of whom are smallholder farmers relying on rain-fed subsistence farming. Increasing climate variability, including recurrent droughts, floods, and shifting rainfall patterns, poses serious threats to agricultural productivity, food security, and rural livelihoods.
Despite the availability of climate-smart agricultural technologies such as improved seeds and small-scale irrigation, farmers face a major barrier to adoption: the lack of financial protection against climate risks. Burundi currently has no formal agricultural insurance system, leaving farmers and local financial institutions fully exposed to climate-induced losses. As a result, agricultural lending is considered highly risky, limiting farmers’ access to credit and creating a cycle of financial exclusion that constrains investment in climate-resilient farming practices.
CTCN Support
CTCN will provide technical assistance to design an integrated financial solution that reduces climate risk in the agricultural sector and enables greater investment in climate-smart agriculture. The assistance will focus on developing a parametric agricultural insurance product that provides rapid payouts when predefined climate thresholds, such as rainfall deficits or extreme weather events, are reached. This mechanism will help protect farmers from climate shocks and stabilize the loan portfolios of Local Agricultural Financial Institutions (LFIs).
In parallel, the CTCN will support the design of a Credit Guarantee Scheme (CGS) to complement the insurance product and further de-risk agricultural lending. The TA will include the technical design of both instruments, the development of a regulatory and institutional roadmap, and the preparation of a pilot implementation strategy. The process will involve key national stakeholders, including the Ministry of Agriculture, the National Meteorological Service, insurance and re-insurance firms, and LFIs, to ensure the solution is locally owned and scalable.
Expected Outcome
The technical assistance is expected to enable the adoption and pilot implementation of an integrated parametric insurance and credit guarantee mechanism that reduces climate risk in Burundi’s agricultural sector. As the risk profile of agricultural lending improves, the initiative will help unlock private sector financing for climate-smart agriculture, benefiting about 5,000 smallholder farmers with access to credit and financial protection against climate shocks while strengthening the resilience of the agricultural economy.
Seeking Experts
The CTCN invites qualified experts and firms to submit Expressions of Interest (EOI) to participate in this initiative. For further information on this opportunity, visit the UN Global Marketplace (UNGM) or the UN website.
If you are not yet a member of the CTCN Network, you can apply to join here.
