FarmCarbon Closes $53 Million to Bring Climate Finance to Smallholder Farmers Across Africa and Asia
A new climate finance vehicle designed to put clean energy technology in the hands of smallholder farmers has closed its first round of funding, marking one of the most ambitious attempts yet to channel institutional capital into agricultural methane reduction in the developing world.
Sistema.bio announced on March 17 that it had closed $53 million in initial funding for FarmCarbon, a carbon finance vehicle led by BNP Paribas Asset Management Alts (BNPP AM Alts), British International Investment (BII), and Shell Foundation.
The funds will support the deployment of over 90,000 biodigesters – devices that convert livestock waste into biogas for cooking and electricity, as well as organic fertiliser that reduces farmers’ reliance on chemical inputs.
The mechanism at the heart of FarmCarbon is straightforward. Sistema.bio pre-finances biodigester installation, allowing farmers to access the hardware at a discounted price through upfront payment or instalments. In return, the carbon credits generated by reduced methane emissions are assigned to the fund and sold through long-term offtake agreements.
Farmers benefit immediately through reduced energy and fertilizer costs and improved farm productivity – all without having to pay the full upfront cost of the technology.
Alexander Eaton, CEO and Co-founder of Sistema.bio, said FarmCarbon builds on 15 years of working hand-in-hand with farmers installing biodigesters, bringing climate finance directly to farmers and enabling them to co-invest in energy, productivity, health, and climate outcomes on their own farms.
Targeting the World’s Most Neglected Climate Problem
The vehicle takes aim at methane, a greenhouse gas that punches well above its weight in climate impact. Methane is responsible for roughly 30% of global warming and about 10% of emissions from livestock, yet despite its outsized impact, it receives only about 2% of global climate finance.
Sistema.bio estimates that the 90,000 biodigesters funded by FarmCarbon will capture and eliminate enough methane to reduce emissions by the equivalent of over nine million tonnes of carbon dioxide over the next ten years.
Investor confidence in the vehicle is underpinned by rigorous independent verification. FarmCarbon’s initial project has already been given an ex-ante AAe rating from BeZero Carbon and carries the Core Carbon Principles label, both signals of strong integrity in the carbon accounting framework. The project also incorporates digital measurement, reporting and verification systems to track impact.
Jonathan Dean, Deputy Head of Natural Capital & Impact Private Equity at BNPP AM Alts, described the investment as an opportunity to scale a project with strong environmental and social credentials. He highlighted the scale of Sistema.bio’s global farmer network, the potential for significant methane reductions, and the additional economic benefit of savings for farmers from fertiliser and decentralised energy provided by biodigesters.
Sistema.bio, founded in 2010 and headquartered in Nairobi, currently operates across 35 countries on three continents and has worked with more than 200,000 users since its founding.
FarmCarbon aims to mobilize more than $1 billion in climate finance over the next decade. That ambition, analysts say, could signal a turning point for how climate ventures in Africa and Asia finance hardware adoption at scale.
For many startups serving farmers, the end customer cannot bear the full cost of hardware — so the real product becomes a blend of equipment, financing, and carbon monetisation. If FarmCarbon performs as planned, it could become a template for how African climate ventures finance adoption at scale, especially in sectors where emissions reductions and rural productivity move together.
