Where Vision Meets Viability: India’s FOAK Blueprint for Climate Finance at Scale

Executive Summary

In the climate-stressed heartland of Andhra Pradesh, Equilibrium designed and delivered a First-of-a-Kind (FOAK) blended finance model, accelerating a large-scale transition to regenerative agriculture for smallholder farmers.

Faced with intensifying rainfall unpredictability and the limits of traditional funding, the project pioneered a unique financial structure, layering catalytic philanthropic support, risk-tolerant bridge grant, and commercial capital. This allowed innovations like AWD, DSR, and zero tillage maize to move from field pilot to proven, scalable solutions.

In just 12 months, this structure mobilised approximately $2 million in blended capital, empowering more than 40,000 rural beneficiaries. 

The project unlocked carbon income for smallholders, boosted food security, and provided a replicable model for climate finance across the Global South.

With clear momentum and commercial capital now anchored, the program is scaling to 25,000 hectares by 2027, proving that strategic, trust-driven blended finance can turn first-of-a-kind interventions into durable, high-impact climate solutions.

Context

Between June and July 2025, Andhra Pradesh recorded just 170.9 mm of rainfall, a sharp 24% deficit from the seasonal norm of 225.2 mm. This isn’t an isolated deviation; it’s part of a broader trend of increasingly erratic rainfall patterns affecting the kharif season and disrupting traditional crop cycles across the region. For smallholder farmers, who depend on timely rains for planting, transplanting, and irrigating their fields, this volatility translates into crop losses, income instability, and rising food insecurity.

Our Regenerative Agriculture project emerges in direct response to these intersecting pressures. Through practices like Alternate Wetting and Drying (AWD) and Direct Seeded Rice (DSR), our project helps farmers transition to low input climate smart agriculture practices that reduce water usage up to 30%, lower input costs, improve soil health, and create new income streams by leveraging carbon markets.

Yet despite their promise, interventions like these rarely find a fit within existing funding models as they always don’t align with the timelines, risk profiles, or metrics of conventional funders. Too often, they are caught in the liminal space—too rooted in complexity for CSR or philanthropic frameworks, yet too early and unproven to stir commercial interest.

This is precisely the kind of gap blended finance is designed to bridge. 

Blended finance offers a rare alignment between ambition and feasibility. By combining concessional support with commercial discipline, it creates space for early-stage interventions to take root, allowing it to absorb risk, extend timelines, and value impact alongside returns.

A Catalytic Start

With this in mind, Equilibrium structured the project on a blended finance framework, identifying the need for catalytic philanthropic capital to absorb early-stage risk and validate the model. USAID’s support became a critical first anchor. 

In August 2024, Equilibrium secured a $115,000 grant from USAID’s Water and Energy for Food (WE4F) program for this specific project in AP. The grant provided early-stage risk capital to invest in areas where traditional finance rarely flows; in community mobilisation, farmer training, and the design of robust data systems that anchor on credibility and long-term impact.

To accelerate implementation and signal commitment, Equilibrium also committed equity capital in the model, absorbing early risk and enabling flexibility in execution.

But the path was far from linear.

Bridging the gap 

Just as the pilot gained traction, policy shifts in the U.S. administration led to the revocation of grant funding, putting the continuity of the project at risk. It was during this period of uncertainty that Spectrum Impact, a mission-aligned family office, stepped in. 

Recognising the long-term potential of the work, and the fragility of climate projects in the face of political headwinds, Spectrum Impact responded with speed, deploying a critical, risk-tolerant bridge grant that sustained momentum on the ground, and created the conditions for a solid foundation to attract additional climate finance.

This progress was anchored in Equilibrium’s decision to embed blended finance into the project architecture, ensuring flexibility, durability, and alignment with real-world constraints. This approach allowed the model to evolve realistically while maintaining a clear pathway to scale. 

“We firmly believe philanthropic capital needs to be catalytic and aid in getting other forms of capital unlocked. Also it's important to take bets on new business models as they can have tremendous potential to scale. We are hopeful that this intervention will create a long term impact.”

~ Mirik Gogri, Spectrum  Impact

Unlocking the Scale with Asvata

Early success, impacting 10,000 farmers, proved the model’s viability. Scaling it further, however, required commercial capital to unlock operational depth and extend the project across new geographies.

Among the first to respond was Asvata. With a $1.6 million commitment, Asvata’s investment marks a critical inflection point for the project. By layering early-stage concessional capital with mission-aligned bridge financing, the model created both credibility and readiness to unlock 17x in additional capital. 

Further, Asvata’s backing not only affirms the project’s technical and institutional rigour, but also reflects confidence in Equilibrium’s ability to structure climate solutions that are both investable and scalable. 

As of 2025, the project has restored 8,000 hectares of farmland and reduced 30,000 tonnes of CO₂e through verified methodologies. Beyond carbon, it has generated over 28,000 tonnes of food via regenerative practices, bolstering food security and improving incomes for over 40,000 rural beneficiaries across multiple districts. 

On benefit sharing, the model created the financial space to design a revenue-sharing mechanism that channels one-third of verified carbon revenue directly to participating farmers. Rather than treating farmers as end recipients, the structure recognised them as co-creators of value, with a defined stake in the outcomes they help deliver. Further, the financing structure enables milestone-based capital deployment, wherein funds are released to participating farmers in tranches as they meet pre-agreed benchmarks related to regenerative practices, monitoring compliance, and carbon delivery.

By 2027, the program will scale to 25,000 hectares and catalyse further uptake of low-input techniques.

The Equilibrium Way

At its core, this project illustrates what’s possible when climate action is underwritten by well-structured financial models. Equilibrium integrated the financial architecture, technical depth, and regional insight to build a model capable of absorbing capital across the multiple sources. 

It unlocked finance that’s patient enough to weather early setbacks, flexible enough to adapt, and bold enough to back FOAK interventions. Whether in nature-based or engineered solutions, we believe this is the financial architecture the Global South urgently needs: fit for purpose, rooted in trust, and ready to move at the speed of climate change.

“At Asvata, our core promise is building scalable climate solutions that deliver measurable impact to benefit the planet, people and businesses. Together with Equilibrium, our investment is to support climate-smart agriculture and drive inclusive, long-term resilience.”

~Navin Mathur, COO, Asvata Climate Solutions

“At Equilibrium, we design every intervention to reflect the realities of local landscapes. In Andhra Pradesh, our project has helped tackle water stress, improve soil health and crop yields there by ensuring transition to climate smart agriculture remains permanent over decades. This partnership with Asvata reinforces the quality and impact of our interventions. Collectively, we are excited to scale and build solutions that can stand as models for climate leadership in the global south.”

~Siddhanth Jayaram, Founder, Equilibrium