The Bayer Foundation and the United Nations Capital Development Fund (UNCDF) are partnering to launch the Food Systems Innovation Finance Facility, an initiative to address global food security challenges and promote sustainable agricultural practices through innovative, high-impact food systems businesses operating in disadvantaged markets in developing countries.

The partnership between UNCDF and the Bayer Foundation aims to mobilize flexible, concessional, and catalytic capital to support innovative food systems businesses, particularly in high-risk market environments in Africa, Asia-Pacific, and Latin America. These small and medium-sized enterprises benefit disadvantaged communities, smallholder farmers, and women involved in food system value chains and contribute to the achievement of Sustainable Development Goal 2: Zero Hunger.

The Fund, managed by UNCDF, will leverage targeted contributions from foundations and development partners to invest in the Zero Hunger agenda in the form of loans and guarantees. This allows the Bayer Foundation to scale the impact of its capital beyond traditional grants through multiple rounds of reinvestment. Furthermore, the Bayer Foundation's financing is expected to catalyze more than a three-fold increase in capital flow from future private donors to innovative food system companies in low- and middle-income countries. In total, the Bayer Foundation will provide the Fund with $4.5 million from 2025 to 2027.

"The Food Systems Innovation Financing Fund represents a transformative approach to the fight against hunger and malnutrition, serving as an example of how corporate philanthropy can create value in collaboration with an innovative and committed financial partner like the UNCDF," said Chitkala Kalidas , Executive Director of the Bayer Foundation. "By leveraging our resources and expertise, we aim to catalyze the flow of capital towards innovative solutions that have a lasting impact on the lives of millions of people. The philanthropic capital will be recycled and can benefit multiple social enterprises in the fight against hunger and malnutrition."

"This partnership is a perfect example of the unique role UNCDF plays within the United Nations Development System. By channeling the Bayer Foundation's philanthropic capital through our innovative financial instruments, we are reducing risk for local businesses and opening the door to other investors," said Pradeep Kurukulasuriya , Executive Secretary of UNCDF. "We are delighted to collaborate with several philanthropic organizations to leverage their capital, unlock and catalyze investment where capital traditionally doesn't flow, and support innovators and early-stage small businesses in food systems in disadvantaged communities and high-risk markets."

The partnership will also focus on creating a collaborative ecosystem of like-minded investors and financiers dedicated to improving food security and promoting sustainable agricultural practices. Other capital providers, such as foundations, interested in financing food security solutions are invited to participate in the Fund. The first investments are expected in 2025, leveraging the UNCDF's structured investment process, derisking financial instruments, and an active group of companies focused on private sector-led, high-impact solutions for agriculture and food security in underserved markets.

Indicative of the Fund's focus on innovation is its first signed investment, Nilus Peru, a social enterprise operating in Latin America and developing technologies to make nutritious food accessible and affordable for low-income people living in "food deserts."