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Incubating Climate Technologies in Small and Medium Enterprises in Chile

Santiago Market
This technical assistance advances the following Sustainable Development Goals: 

Decent work and economic growth

Goal 8: Decent work and economic growth
Goal8
Decent work and economic growth

Industry, innovation and infrastructure

Goal 9: Industry, innovation and infrastructure
Goal9
Industry, innovation and infrastructure

Climate action

Goal 13: Climate action
Goal13
Climate action

This Technology Transfer Advances Chile's

  • Nationally Determined Contribution to reduce its CO2 emissions per GDP unit by 30% below their 2007 levels by 2030, while decreasing poverty and inequality as well as continue advancing toward sustainable, competitive, inclusive and low-carbon development.

Context

The agriculture sector is an important contributor to the Chilean economy in terms of exports, jobs and GDP, but it is also responsible for 13% of the country´s GHG emissions, before accounting for GHG emissions from energy consumption related to production as well as a large consumer of water. Likewise, Chile is highly vulnerable to the effects of climate change with the Agricultural and Forestry sectors being one of the most vulnerable sectors. Within this sector, micro, small- and medium enterprises (SMEs) make up the majority of producers. There is a low uptake of both climate mitigation and adaptation technologies by SMEs despite available financial instruments. This technical assistance sought to understand the barriers that prevent SMEs in the fruit, wine, vegetable, annual crop, beef, and dairy value-chains from implementing climate mitigation technologies, and climate adaptation technologies (which in this case, focused on efficient irrigation) and to propose solutions to increase the use of these technologies.

Requested CTCN Response

The requested CTCN technical assistance aims to evaluate the main obstacles to funding for investment in climate technologies facing MSMEs in the agrifood sector in Chile. Specifically with the aim to:

  • Analyze the main barriers to investment in clean technologies by SMEs in Chilean agri-chains and the potential interventions to overcome them; 
  • Identify the main opportunities to reduce the environmental impact and increase the resilience to climate change of selected agri-chains through the use of clean technologies;
  • Analyze the effectiveness of selected national and international financial instruments to help promote the uptake of clean technologies in SMEs; 
  • Propose recommendations to overcome barriers and increase the deployment of clean technology within the prioritized value chains through either the Clean Production Agreements or a potential Green Investment Bank; 
  • Build local capacity so that authorities have increased awareness of the challenges and the opportunities that could enable the replication of learnings to other agri-chains and potentially other sectors in Chile;
  • Engage with 31 private sector organizations throughout the assistance in order to better understand the local context, to validate findings, and to share project results. 
     

Relevant Technologies and Approaches

Expected Results

  • The technical assistance helps to understand why SMEs in the agri-food sector aren´t implementing climate technologies, which will enable Chile to design initiatives and instruments that can help address these challenges. CORFO estimates a potential 18.4 million tonnes of CO2 reduction through the adoption of climate technologies in the sector. This project helps Chile to realize this opportunity. 
  • Strengthened local institutional capacity so that authorities can replicate learnings to other agri-chains and potentially other sectors, catalyzing further sustainable growth within Chile´s SMEs
  •  The recommendations inform the implementation of a Green Investment Bank which is being developed in parallel with this technical assistance. The recommendations produced will help facilitate the integration of the agricultural sector as a priority sector for the bank and with the aim of making the bank an effective mechanism to combat and address climate change within the sector.

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