In southern Benin, the company Agro-Eco Services, founded by local entrepreneur Noël Obognon, is working to improve agricultural productivity in an area where nutrient-poor soil has long challenged farmers. The firm produces organic compost using black soldier fly larvae, a project partially financed through the market gardening development support initiative known as Padmar. This initiative receives support from the International Fund for Agricultural Development (Ifad), a UN agency focused on rural development.
Padmar’s funding was made possible through innovative legal and financial frameworks developed by Ifad’s in-house lawyers in collaboration with the international law firm Clifford Chance. Together, they crafted the first bond issuance program launched by a UN body. These bonds, issued under English law despite Ifad’s Rome headquarters, have attracted a diverse range of investors by combining financial returns with sustainable development goals. Since launching in 2022, Ifad’s bond program has raised over $1 billion across 13 separate issues.
The bonds help fund various projects, including a large-scale reforestation effort in Mexico’s Balsas Basin, where 444,000 hectares of forest have been restored to enhance climate resilience. Ifad’s chief legal and governance officer, Katherine Meighan, noted that the bond initiative emerged from efforts to diversify funding sources and mobilize sustainable private capital targeted at rural areas. This approach represents a shift toward more predictable and scalable financing models within multilateral agencies.
Similar financial innovations are underway at the UN High Commissioner for Refugees (UNHCR), which has been exploring carbon markets to support displaced communities grappling with long-term environmental challenges. The UNHCR’s Refugee Environmental Protection Fund addresses deforestation caused by displaced populations collecting wood for cooking by replanting trees and restoring ecosystems, while promoting alternative fuel sources.
UNHCR’s innovative finance officer and general counsel highlighted the complex balancing act required to make carbon credit instruments attractive both to international investors and local stakeholders, including governments and refugee communities. By aligning with established financial frameworks and focusing on risk management and measurable outcomes, the program has attracted support from firms like carbon trading company BB Energy and consultancy Hamerkop.
These initiatives reflect a broader trend of NGOs and international organizations adopting new legal and commercial methods to raise finance for social and environmental causes. Paul Deakins, a partner at Clifford Chance, emphasized this increasing interest in innovative financial vehicles to support sustainable development objectives.
Another example includes The Ocean Cleanup charity, which has benefited from legal expertise to navigate the ambiguous jurisdictional status of cleaning operations in international waters, further illustrating the diverse applications of such legal innovations.
Overall, these developments demonstrate how legal counsel and financial innovation are enabling international organizations to tap into private capital markets and emerging carbon markets to support projects ranging from sustainable agriculture to environmental conservation and refugee support.