Context
Livestock is one of the most relevant sectors of Honduras’ economy. It generates 13% of the gross domestic product (GDP) and is responsible for approximately 400,000 jobs annually (36% of the economically active population) supporting 180,000 families. However, the sector is also an important greenhouse gas (GHG) emitter, accounting for 9% of the country’s total emissions. Farmers traditionally rely on established cattle-raising practices, which often involve limited animal and farm management and pasture systems with low tree integration, often contributing to land degradation and deforestation.
Goals and approach to transformational change
The “Transforming the Honduran Livestock Sector into a Low-Carbon Economy” (“Honduras – Livestock”) project aims to promote a productive, climate-resilient, and economically viable livestock sector. Its overarching objective is to support the sector’s transition towards a low-carbon and sustainable development pathway, contributing to Honduras’ Nationally Determined Contribution (NDC) under the Paris Agreement and to the Sustainable Development Goals (SDGs).
(NDC) under the Paris Agreement and to the Sustainable Development Goals (SDGs).
To achieve this, the project will:
1) Strengthen farmers’ capacities through technical assistance and Farmer Field Schools to promote the adoption of low-carbon, climate-resilient livestock practices.
2) Facilitate access to finance by establishing a blended finance mechanism that enables on-farm investments in sustainable technologies.
3) Enhance value chain integration by strengthening linkages between producers, buyers, and financial institutions to improve market access and income stability.
and 4) Support institutional frameworks and monitoring systems by developing MRV tools and embedding climate-smart livestock practices within national policies and strategies.
As a result, the project aims to transform 1,200 farms into low-carbon production systems through an integrated innovation package that enhances productivity, profitability, and climate resilience while reducing GHG emissions and increasing carbon sequestration at farm level. In addition, knowledge management, training, and awareness-raising activities are expected to benefit around 13,500 people, including farmers, employees, family members, extension workers, and credit officers.
Components and support mechanisms
The Financial Cooperation (FC) component plans to establish two financial instruments, unlocking further public and private loans to smallholder farmers to implement low-carbon solutions in the livestock sector. The project will establish concessional loans credit line (EUR 4 million) providing more favourable conditions compared to the market’s average. This instrument is supposed to be complemented with a risk cover guarantee (EUR 2 million) that incentivises financial institutions and farmers to participate in the scheme.
The Technical Cooperation (TC) component strengthens the capacities of farmers and sector stakeholders to adopt low-carbon, climate-resilient livestock practices through targeted training, advisory services, and Farmer Field Schools. It also supports the development of monitoring systems, institutional frameworks, and value chain linkages to enable sustainable sector transformation.
Long-term impact
The project will result in 135,000 tCO2e of direct emission reductions during the implementation period, escalating to 4.8 MtCO2e in the span of an additional ten years. By 2038, the total (direct and indirect) emission reductions will have reached 10.3 MtCO2e. The project aims to train 30.555 farmers during project duration.
