INNOVATIVE FINANCIAL INSTRUMENTS OF THE CLIMATE-ORIENTED AGRICULTURAL SECTOR: ADAPTATION FOR UKRAINE

Анотація

The article systematises innovative financial instruments used in the climate-oriented agricultural sector, classifying them into four groups: sustainable debt instruments, climate risk management tools, market-based mechanisms, and structured capital mobilisation mechanisms. The relevance of the study is driven by the significant financing gap for climate adaptation in agriculture: according to the Climate Policy Initiative and IFAD (2025), annual climate finance needs for agrifood systems amount to USD 1.1 trillion, while actual flows reach only USD 95 billion. At the same time, a bibliometric meta-analysis of green bond markets (2014–2023) reveals that less than 5% of total issuance is directed toward agriculture, indicating severe underinvestment in the sector.The study draws on recent scientific publications and institutional reports (2024–2025), including research on parametric insurance model recalibration under climate change, empirical evidence on the link between agricultural insurance and climate adaptation technologies, and the first large-scale verified carbon credit projects in regenerative agriculture under the Verra VM0042 methodology. The analysis of blended finance mechanisms is based on the CPI/IFAD Playbook for Climate-Smart Agrifood Systems and Convergence data showing USD 15.5 billion in climate blended finance transactions in 2024. The study identifies key barriers to implementing such instruments in Ukraine, including underdeveloped capital markets, insufficient regulatory frameworks for green finance, limited meteorological data infrastructure, and the consequences of armed aggression. Drawing on the World Bank’s priorities for agricultural support in Ukraine and the national Strategy for Agriculture and Rural Development until 2030, the article proposes an adaptation matrix with a phased implementation roadmap. The findings contribute to developing practical approaches for financing the climate transition of Ukraine’s agricultural sector in the context of EU integration and post-war recovery. The results also highlight policy priorities for scaling climate finance instruments in Ukraine.

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