The executive management of the Bank for Agriculture and Agricultural Cooperatives (BAAC) and representatives from the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) Thailand Office recently took part in a study visit to Germany where they met with public, academic, and private institutions in the field of sustainable, green and climate finance in the agricultural sector. The five-day trip from 22-26 May aimed to provide a team of delegates with expertise in innovative instruments and business models for green finance and sustainable agriculture, especially climate-smart agriculture. The study visit also provided a platform for peer-to-peer exchanges between the BAAC and German institutions.

This study visit aimed to build the BAAC’s capacity for developing green finance models and creating financial innovations for sustainable and climate-smart agriculture, which is in line with Thailand’s Bio-Circular-Green Economic Model (BCG). It is also aligned with BAAC’s Environmental, Social, and Governance (ESG) standard of being a secure rural development bank with modern management providing integrated financial services to sustainably enhance the quality of life of farmers.

The BAAC management team also met with representatives from German public banks, including Sparkassen Finanzgruppe (German Savings Bank Association), Helaba, Rentenbank (German Agricultural Bank) and the InsuResilience Solution Fund, to discuss the feasibility of innovative financial products including green credit, promotional loans for the agricultural value chain and rural-area green bonds and financing for environmentally friendly projects for small-medium enterprises SMEs, and climate risk insurance.

A visit to the German Agricultural Society (DLG), the Leibniz Institute for Agricultural Engineering and Bio-Economy (ATB) and the Leibniz Centre for Agricultural Landscape Research (ZALF) provided the delegates with innovative solutions and research initiatives in precision agriculture, automation, and remote sensing for yield or pest projections, and crop modelling. The demonstration plots and laboratories for biochar production, crop rotation and post-harvest processing and storage enabled the BAAC management team to learn how farmers can actively adapt to the impacts of climate change, especially drought and extreme weather patterns. Following the visit, the BAAC will seek ways to further develop institutional collaboration with the Frankfurt School of Finance and Management and Renewable Academy (RENAC) for training courses and practices on green and climate finance for further human resource development and capacity building.

The representatives of the Thai Embassy in Berlin also led a team of delegates to meet officials from the Federal Ministry for Climate and the Economy (BMWK) and the Mitigation Action Facility (TSU) on the topic of climate finance policy and the importance of climate mitigation and adaptation. The knowledge-sharing and exchange session has enhanced BAAC’s understanding and its role as the bank for smallholder farmers.

Chatchai Sirilai, BAAC President, emphasised the learning benefits derived from the study trip, saying: “BAAC has recognised the impact of climate change on the Thai agricultural sector and the need for farmers to access financial mechanisms and financial products crucial for coping with the unforeseeable risks of climate change. It is both a great opportunity and challenge for BAAC to prepare and develop staff competencies to understand climate change and its impact on risks in both Thailand’s agricultural and banking sectors. Therefore, BAAC will continue cooperation with GIZ to introduce green and innovative finance products for supporting farmers and transformation of the agricultural sector in Thailand.”

Tim Mahler, Director of Business Development and former Country Director of GIZ Thailand, emphasised the long relationship between the two countries, “BAAC and GIZ have a long-standing cooperation and partnership. BAAC and GIZ have partnered since the 1990s to promote sustainable development, rural financial inclusion and agricultural development. Finance is always important for the agriculture sector and for farmers. It is even more crucial now when considering the impacts of climate change. Not only is finance needed, but raising farmers’ awareness and understanding of climate change is also necessary”.