Financing Africa’s Restoration Economy: What’s Next?

‍Across Africa, restorative, smallholder‑led agribusinesses [1] are creating rural jobs, strengthening climate resilience and restoring landscapes – work that is urgently needed, with around 15% of the continent now degraded, the equivalent of 15,000 New York Cities. Yet despite managing 80% of Sub‑Saharan Africa’s farmland, many smallholder farmers – and the agri-SMEs that aggregate from them – still struggle to scale, held back by limited market access, scarce finance and the challenge of turning restoration into investable value.

Last month, at a convening led by Regeneration in Nairobi, Dr. Agnes Kalibata – former Rwandan Minister of Agriculture, former President of AGRA, and current chair of the C4Impact Advisory Group – underscored the inseparable link between farmer livelihoods and landscape restoration. Drawing on her leadership in driving food-system reforms across Africa and mobilising over 1 billion USD to strengthen smallholder agriculture, she emphasised the need to centre farmers in restoration efforts and to build the enabling conditions for their success. She also underscored the critical role of aggregation, showing how agribusinesses unlock technical assistance, scale and market access for farmers.

Building on this keynote, Regeneration ran a workshop series with more than 40 actors from across the restoration economy – agribusinesses, investors, donors, off‑takers and market intermediaries – to pinpoint the barriers limiting smallholder‑led enterprises and co‑create solutions that support their scale and strengthen their restoration impact. This article distils the key insights from the event, from the need for clearer pipeline visibility and stronger readiness support to accessible working capital and trusted, low‑cost MRV [2].

Figure 1: Throughout the day, participants separated into interactive breakout groups, tackling guiding prompts, mapping financial obstacles, identifying de‑risking tools and returning to plenary with 2–3 actionable solutions.

From Potential to Pipeline: Surfacing Investable, Nature‑Positive SMEs

A major barrier in the restoration economy is the lack of a visible, investable pipeline of nature‑positive agri‑SMEs. Whilst there are already many agri‑SMEs farming sustainably — often through agroforestry and low‑ to no‑input models — many still sit just below investor thresholds. They have strong models and real restoration impact, but still need support to become “investment ready”, such as clearer governance structures, stronger financial systems, and restoration‑linked revenue streams.

The problem is that “investment ready” means something different to every investor. As a result, agri-SMEs end up chasing shifting standards, while much of the restoration value they create (e.g., premium produce, restored land, carbon gains, biodiversity benefits) remains hard to measure and easy to overlook. This leaves investors struggling to find credible opportunities, often duplicating due diligence across disconnected networks, while smaller or off‑grid businesses rarely surface at all. And when these enterprises can’t be identified or financed, they struggle to continue farming sustainably.

At the same time, readiness support is typically short‑term and grant‑funded, often ending before enterprises reach investment grade. As a result, agri‑SMEs can’t scale in the way they need to, and restoration outcomes can’t scale with them. Both dynamics point to the same underlying issue: without shared definitions and shared systems, SMEs remain invisible and underprepared; and no single investor or donor can solve that alone.

Community of Practice

A simple but powerful solution is a shared system for surfacing mission-aligned, investable SMEs: a community of practice, where investors, donors, off‑takers, intermediaries and agri‑SMEs can align on what “investment‑ready” and “restorative” actually means. Common definitions and standardised financial, governance and impact templates would streamline due diligence, enable knowledge sharing, cut duplication and make pipeline visibility far clearer. And even if full alignment isn’t possible because funders have different mandates, agreeing on a shared baseline would still give everyone a common starting point. Some participants even suggested profit‑sharing mechanisms for pipeline referrals to encourage more transparent and proactive opportunity sharing.

Independent third‑party organisations are best placed to host such a platform, such as industry alliances and technical assistance facilities.Crucially, it must be anchored by trusted intermediaries in the region who understand local contexts and can surface credible opportunities beyond the “usual suspects”. And with their regional expertise and close relationships with agri-SMEs, these intermediaries can ensure the platform is genuinely designed around SME realities: tailoring data requests to what is feasible, cutting what isn’t, and engaging enterprises in ways that help them understand why data matters and how it strengthens their case for investment. This is essential if agri‑SMEs are to continue restoring land at scale.

Readiness Support as a Business Model

When building a bankable portfolio, another critical requirement is ensuring that readiness support is genuinely long‑term and financially sustainable, by using a blended model. For example, concessional capital can underwrite early‑stage capacity building; off‑takers can contribute where readiness strengthens supply reliability; investors can co‑finance where it reduces risk; and first‑loss guarantees can help make the economics work. Critically, SMEs should also contribute modest fees or success‑based payments when support clearly adds value, incentivising them to commit time and engage more meaningfully with the support offered. This shifts technical support from short‑term, grant‑funded support into a durable, investable service model.

*Figure 3: Henry Kahira, from WRI, presents his breakout group’s findings to the convening, outlining practical ways to make readiness support more financially sustainable.*

To ensure readiness support genuinely adds value for SMEs, it must be clearly impactful and designed with outcomes in mind. For example, by involving financiers in the design of technical assistance from the outset, SMEs are prepared for real financing pathways, the impact of technical assistance becomes visible — with tangible returns for both enterprises and land restoration. Intermediaries, in turn, are best incentivised when this work is embedded in long‑term programmes rather than short project cycles, allowing deeper relationships, sustained support and more impact as enterprises move toward readiness.

When building a bankable portfolio, another critical requirement is ensuring that readiness support is genuinely long‑term and financially sustainable, by using a blended model. For example, concessional capital can underwrite early‑stage capacity building; off‑takers can contribute where readiness strengthens supply reliability; investors can co‑finance where it reduces risk; and first‑loss guarantees can help make the economics work. Critically, SMEs should also contribute modest fees or success‑based payments when support clearly adds value, incentivising them to commit time and engage more meaningfully with the support offered. This shifts technical support from short‑term, grant‑funded support into a durable, investable service model.

To ensure readiness support genuinely adds value for SMEs, it must be clearly impactful and designed with outcomes in mind. For example, by involving financiers in the design of technical assistance from the outset, SMEs are prepared for real financing pathways, the impact of technical assistance becomes visible — with tangible returns for both enterprises and land restoration. Intermediaries, in turn, are best incentivised when this work is embedded in long‑term programmes rather than short project cycles, allowing deeper relationships, sustained support and more impact as enterprises move toward readiness.

From Risk Premiums to Sustainable Returns: Partnerships That Unlock Working Capital

Another critical barrier in the restoration economy is the persistent working‑capital gap. Many restoration-focused enterprises sit in the “missing middle”: too large for grants but still perceived as too risky for commercial lenders. Because many agri‑SMEs in Africa have thin credit histories, limited collateral and operate in value chains lenders don’t know well, financiers are often discouraged from serving them, particularly when they are small and geographically dispersed. This leaves many promising SMEs chronically underfunded, with little financial headroom and limited incentive to continue farming sustainably.

Ultimately, this gap persists because risk is overstated, restoration is undervalued, and every financier must redo due diligence in isolation. In reality, restoration-focused SMEs perform strongly: Rebuild’s working‑capital facility has maintained a 96% repayment rate since 2022. Yet every lender learns this in isolation, repeating due diligence and pricing risk without shared data. These loans also support a shift in farming practices, which raises a bigger question about how much risk lenders are willing to take to make restoration possible. Without shared evidence, shared risk and shared systems, working capital remains a series of isolated bets rather than a recognised asset class.

De-risking Partnerships

A key opportunity that surfaced from the event is deeper collaboration between off‑takers and investors to de-risk working capital for restoration-focused SMEs. Buyers often have deep networks, strong visibility into enterprise performance and the ability to collect data that financiers struggle to access. Partnerships like Organic Development Finance (ODF) Fund’s work with Tradin Organic show how shared pipeline visibility, aligned priorities and even tripartite agreements can reduce risk for lenders while strengthening supply reliability for buyers. Within this, adaptability is crucial: investors typically move slowly but crop cycles move quickly, so partnerships need to be designed around real harvest timelines and cash‑flow needs.

Figure 4: A breakout group in Regeneration’s workshop on the working‑capital gap, composed of regional and international stakeholders, explored practical ways to de‑risk lending and strengthen access to finance for agri‑SMEs.

Just as they help build an investable pipeline, third‑party intermediaries can also play a critical de‑risking role when structuring financing agreements. Models like Aceli – which help to unlock finance for agri-SMEs – demonstrate how independent actors can lower the cost of due diligence, giving verified “readiness” stamps, and signalling that an enterprise is credible through their association. In addition to building confidence across the ecosystem and help lenders price risk more accurately, they can de-risk deals through innovative mechanisms like first-loss guarantees, making lending more attractive and channelling more finance into restoration-focused business models.

Agri-SME partnerships and platforms can also build confidence in the restoration economy. In Kenya’s macadamia sector, the MACNUT Association provides systemic verification and contract enforcement by acting as a trusted body of macadamia suppliers, creating confidence across the value chain. Similar platforms could support capacity building, streamline data collection, and coordinate requests from off‑takers and investors. The challenge is designing models that are sustainable and incentivise participation, whether through profit‑sharing mechanisms or innovative tools that reward collaboration.

“Blended finance has a huge role to play in this sector — both to de-risk investment and to prove to private capital, and institutional investors in particular, that these essential (and exciting!) markets are a compelling way to build both economic and environmental resilience across Africa.”

Sarah Forrest, Finance Director, AgDevCo

From Data Burden to Shared Systems: Unlocking Credible, Low-Cost MRV for SMEs

*Figure 5: From left to right: Shiro (Afrex Gold), Sarah (AgDevCo) and Rita (Privamnuts) share perspectives on how to reduce the data burden on agri‑SMEs.*

The final challenge that emerged from the event was generating reliable and accessible MRV for restoration‑focused agri‑SMEs. Buyers and investors need credible, independently verified data, yet current MRV systems are often too expensive, complex and time‑intensive for local organisations. As a result, SMEs and community groups carry a heavy data‑collection burden without the tools or resources to meet market expectations.

Much of today’s MRV cost comes from collecting more data than is truly needed and from everyone building systems separately. MRV must be low‑cost and simple enough for SMEs, yet robust enough for buyers and investors — a balance that is hard to strike and often leads to over‑engineering. The priority is to identify what information is genuinely essential and build shared infrastructure and stronger local capacity, so restoration outcomes can be verified without rebuilding MRV for every project.

A deeper insight was that MRV is ultimately a question of cost‑sharing and fairness. SMEs and smallholder farmers carry most of the operational burden, while downstream actors – buyers, investors and regulators – tend to capture a disproportionate share of the value created. However, the value created, from restored land and stronger rural livelihoods to more resilient supply chains, often extends far beyond the enterprise itself.

“Farmers are more willing to track and share data when they see clear value in it. Engaging them early to define what information matters – and how it can improve market access and finance opportunities – makes it far easier for restoration‑focused agri‑SMEs to compile and use that data for shared benefit.”

Mary Muhara, Co-Founder, The Village Nut Company

Pooled Financing Approaches

*Figure 6: Monica Kinyua, a Regeneration team member, captures ideas from a workshop session focused on reducing the MRV burden for agri‑SMEs.*

From this challenge emerged a promising idea: a pooled financing approach. SMEs gain directly from MRV through access to buyers and investors, so there is a case for modest contributions that help them track output, quality and market alignment. But relying on SMEs alone diverts scarce resources away from sustainable farming, especially when they already carry a heavy data‑collection burden. A pooled financing approach means designing a model where MRV costs are shared across all who benefit, rather than falling on those least able to afford them — with a pooled mechanism that aggregates contributions from multiple actors.

While investors and off‑takers are the primary actors requesting MRV data, neither can shoulder the cost alone. Many MRV metrics ultimately serve investor needs, so they must contribute – yet if they fund everything, continuity becomes fragile. A more workable model is one where investors help establish systems and build enterprise capacity, while recognising they are not the sole beneficiaries. Buyers also benefit, and they already pay indirectly through premiums and their own verification processes; but more could be done to link restoration outcomes to their business resilience and competitive advantage. Philanthropy and governments also play a critical role, especially in funding public‑good data and setting clear rules on what information should be openly shared to reduce costs and level the playing field.

Low-Cost Data Tools

There are also practical ways to bring down the overall cost of MRV, making any pooled model far more manageable for all actors.WRI’s digital MRV system, for example, shows how credible restoration data can be generated at a very low cost. By combining AI, mobile tools and standardised processes, monitoring costs can fall by up to 98%. Local organisations collect simple, science‑aligned data; WRI verifies it through satellite imagery, field checks and quality assures; and the resulting trusted data acts as a kind of “credit rating” that strengthens investment cases and enables outcome‑based finance, where funders pay only for verified results. Shared digital infrastructure like this reduces the burden on SMEs, increases transparency for investors and creates a scalable pathway for restoration finance.

“What is still holding deals back is the evidence gap. Investors, donors and private sector actors will commit when they can see a verified outcome, priced and traceable. Low-cost MRV is what makes that possible at scale. It converts conservation claims into assets that can be structured, underwritten, and traded. The projects that close in the next two years will not be the ones with the best restoration plans. They will be the ones that solved verification first.”

Henry Kahira, Senior Investment Manager, World Resources Institute

The Path to Scale: Turning Collaboration Into Investable, Landscape‑Level Restoration

*Figure 7: A breakout group of agri‑SMEs, off‑takers, investors and market intermediaries discusses pathways to more coordinated action across the restoration finance ecosystem.*

Regeneration’s convening event made one thing clear: Africa’s restoration‑focused agri‑SMEs are delivering real value, but the systems around them must evolve. Pipeline visibility depends on shared definitions and long‑term readiness support. Working capital requires coordinated de‑risking between buyers, investors and trusted intermediaries. And credible, low‑cost MRV hinges on fair cost‑sharing and digital infrastructure that reduces the burden on SMEs while increasing trust for financiers.

What emerged is a picture of a restoration economy that can scale — but only through collaboration and coordinated action. Shared systems, shared evidence and shared financing models form the backbone of a more investable landscape. The task now is implementation, so restorative agri‑SMEs can shift from overlooked and risky enterprises to recognised engines of restoration capable of transforming not only rural economies but entire landscapes.

“My takeaway is that the biggest bottleneck to scaling restoration is not a lack of capital, investment-ready SMEs, committed buyers or technology. The pieces of the puzzle are already there- we're just not connecting them well enough. We need to rethink how we work together, connect the right partners and exchange more effectively and thus unlock synergies and opportunities across the ecosystem."

Maren Peters, Manager Sourcing Development, Tradin Organic

This article is the final in a series, funded by Bezos Earth Fund.

[1] Agri‑SMEs have the potential to drive restoration by building sustainable farming practices into their core business models, making healthier environments essential to their commercial success. Sustainable farming practices include methods like crop rotation, agroforestry, efficient water use, and integrated pest management to improve soil health, biodiversity, and long‑term resilience.

[2] MRV stands for measurement, reporting and verification.