1 Given Rabobank as its parent, Rabo Foundation functions as an impact financier bridging pure philanthropy and commercial banking. In a blended finance transaction, how do you outline your primary function? Do you primarily serve as the risk absorber, the market builder, or the connector, and is this role fluid based on the specific geography or sector?

There are two important and perhaps unique characteristics that distinguish Rabo Foundation from others in the sector. First, we operate as a foundation, which means we do not have a profit goal or return goal from the transactions we set up. That allows us to take on more risk than other impact financiers or DFIs, who typically carry a return mandate. Second, we have the backing of Rabobank, which means we are not limited to grants. We can deploy debt instruments including credit guarantees, loans, trade finance, and working capital. This combination positions us well to participate in blended finance structures because we can absorb more risk while also offering concessional loans or credit guarantees that help shape the structure of a facility. In India specifically, the professionalism of the financial sector and the concentration of impact-focused organisations have made it a natural breeding ground for our blended finance programmes.

2 How does Rabo Foundation distinguish between a transaction requiring catalytic blended finance support and one that a commercial bank could finance independently? This relates to the core challenge of additionality in blended finance: ensuring concessional or public capital is only deployed when genuinely necessary to unlock a deal that commercial finance otherwise would not touch.

Additionality is one of the most important things we look for in any transaction. The word itself captures the intent: we want to be additional to what is already available in the market. If others can do what we do, our role has been fulfilled and we can move on to more innovative transactions or new sectors.

In practice, we are typically one of the first or second lenders to an organisation. If there are already many lenders providing support, that is a signal for us to step back. Because we do not have a return goal, we always put impact first, and that shapes what we look for: does the organisation work fully with smallholder farmers? What is the added value it provides to those farmers? Can it absorb and make good use of our support?

Beyond the financial instrument, we also have a specific grant pool dedicated to capacity building and technical assistance. Lenders who provide a loan typically do not also provide that kind of non-financial support. That combination is part of what makes us additional. We see ourselves as a partner to our beneficiaries rather than merely a lender.

3 Given your focus on bolstering farmer cooperatives, producer organisations, and agricultural SMEs that support smallholder farmers, what segments of the agricultural value chain, in your view, are most appropriate for blended finance solutions, as opposed to relying solely on philanthropic aid or fully commercial investment?

If you look at the lifecycle of an organisation, there is a very specific moment where blended finance is most relevant. Very early-stage startups where the business model is still being drafted tend to rely on grants or equity. At the other end, once an organisation becomes profitable, it can access commercial credit. The gap is the tipping point just before profitability, where the organisation has a proven model but is not yet profit-making. Banks will not typically engage at this stage, and grant funding is no longer appropriate. That is where we step in.

Farmer Producer Organisations present a similar dynamic. They are often supported initially by government or philanthropic funding, but as they become more viable and start generating returns, there is a period where they cannot yet access commercial loans because they lack collateral. We offer cash flow-based financing rather than requiring collateral, which is where we are genuinely additional to the commercial sector. In short, early-stage organisations just before the profitability tipping point, and FPOs with strong business models but limited collateral, are the two categories where blended finance solutions are most appropriate.

4 Rabo Foundation, in collaboration with USAID, developed a $15 million bank guarantee program in India to promote climate-smart agriculture lending via partners like Ananya Finance and Samunnati. What mechanisms are employed in structuring such a guarantee to genuinely mitigate risk for the lender, ensuring it is a true de-risking tool rather than a mere subsidy for pre-existing credit lines?

The key discipline is always to direct the guarantee toward portfolios the lender would not otherwise build. You do not want to structure a guarantee and then find that half the losses covered are losses the lender would have made anyway on their regular book. That would be a subsidy, not an additionality-driven instrument.

In the USAID Sustainable Landscapes Guarantee Programme, we specifically targeted tribal groups and rural communities living in and from forests. That is a segment that NBFCs like Samunnati would not normally touch. We worked together with USAID and the lending partners to design the structure around this new target group. The first 2% of losses were absorbed by Rabo Foundation, given our capacity as a foundation to take a larger hit, while USAID provided a 50% guarantee on the remaining 98%.

The programme has been running for six years now and the portfolio has not grown as fast as we had hoped. That itself has been a major learning. It reflects the difficulty lenders face in genuinely engaging with new, unfamiliar target groups. Even with a guarantee in place, the traditional and conservative mindset of a banker tends to pull towards more polished organisations. What we are asking lenders to do is go into uncharted territory, and that takes more than risk coverage. It takes sustained engagement and a willingness to develop new relationships.

5 What key takeaways have emerged from Rabo Foundation's collaborations with development institutions, philanthropic funders, and commercial investors regarding the effective structuring of partnerships to scale agricultural financing and successfully mobilise private capital?

Two things matter most in partnership-based blended finance, beyond the technical structuring. The first is patience. Not just patient capital, but patient stakeholders. Setting up a blended finance structure takes time because every organisation comes with a different mandate, and aligning those mandates takes months or sometimes a full year. Stakeholders who expect to close a transaction quickly will be disappointed. The deals worth building are not small, and the effort required to align different parties is substantial.

The second is having internal champions within partner organisations. You need to work with people who have the mandate and the personal drive to push a transaction forward internally. If you are engaging with someone too junior in the organisation, there is constant back and forth that slows everything down. The transactions we have successfully closed have consistently involved individuals on the partner side who were mission-aligned, result-driven, and empowered to make decisions. Mission alignment across all stakeholders at the right levels of risk absorption is what makes these structures work.

6 Rabo Foundation is improving its impact monitoring framework with clearer, themed impact goals. Considering this, how does rigorous impact measurement practically influence your financing decisions? For instance, has it ever prompted you to leave a market or modify a financing instrument because it was not achieving the desired results?

Impact is our core mission, and our approach to measuring it has matured significantly over time. When I joined the foundation about seven years ago, impact measurement was essentially Excel sheets sent to partners for them to fill in. The reliability of that data was always a question. Today, every project must complete a potential impact framework before it starts, and that framework is submitted as part of the formal credit proposal to an internal impact committee.

We assess each transaction on both an impact score and a credit score. Low potential impact is generally a no-go, regardless of how clean the credit risk looks. On the other hand, if the impact potential is very high and the credit risk is also high, there is still a case to proceed, because impact always takes precedence for us. Scale also matters. A project with a moderate impact score can still be worth pursuing if it reaches a very large number of farmers.

Beyond individual transactions, the framework influences our country strategy. Additionality, local regulation, and the political environment all factor into decisions about whether to enter or exit a country. For example, we onboarded Nepal recently, where access to finance for cooperatives is constrained and existing impact funding is limited, but where local central bank regulations have eased not long ago. Our first transaction there is now done, and we expect more to follow.

7 How will the role of blended finance evolve in the future to strengthen global food systems? Specifically, how can it enable smallholder farmers to participate in more resilient and sustainable agricultural value chains?

Recent disruptions to global value chains, from the COVID pandemic to current geopolitical tensions, have shown how vulnerable export-oriented smallholder models can be. Where we previously supported cooperatives and companies building toward export markets in Europe or the US, we are now focusing more on local market resilience. The core job of blended finance is to ensure capital reaches smallholder farmers who currently cannot access it.

But the end goal is not dependency on blended finance structures. The local financial system must eventually step in. Our role is to set examples, provide evidence that things can work, and create the track record that allows local banks and institutions to build confidence with these target groups. Even a local commercial bank in India can have an impact mandate. The PSL framework shows that, though the challenge is that banks remain cautious about early-stage or innovative models. Blended finance is a bridge, not a destination. Once we have demonstrated that a portfolio is viable, we can step out and let the local financial system take over.

India has become a key portfolio for us and a genuine showcase for the rest of our global work. The transactions we have built here, with partners like USAID and USDFC, are now being studied by our colleagues working in Africa and Latin America. The professionalism of our Indian partners, the quality of the organisations we work with, and the depth of the impact generated make India a model for how blended finance programmes can be designed and replicated.