In Pakistan’s Himalayas, Germany’s IKI Small Grants programme worked with the Aga Khan Foundation (AKF) to fund local business efforts to promote cultivating roses and saffron in the country’s high-altitude agriculture. The measures were part of an initiative run in India, Pakistan, and Tajikistan for financing local ideas that turn climate risks into business opportunities that reached 4,000 people directly.

“When it doesn’t rain for a long time, we have to harvest our crops prematurely, losing time, labour, and money,” says Manzur, a farmer from Kosht village in northern Pakistan’s Chitral district. “Now, saffron grows with minimal water, even during the dry season, and restores soil health using manure – not chemicals.” In the highlands of Chitral, Pakistan, reduced rainfall and shrinking glaciers have made farming precarious for local, rural populations. A quiet transformation is taking root – one saffron bulb, one rosa damascene plant after another.

Decision-making at the local level and space for testing new ideas

With support from IKI Small Grants, AKF in Pakistan launched a business challenge for private companies to receive funding for climate-smart business opportunities. In three countries – India, Pakistan, and Tajikistan – the initiative awarded grants to a total of eight local businesses. The German government provided 900,000 euros in funding through IKI Small Grants. The IKI programme is more than just a source of funding. It follows a unique “funding the funders” model, by entrusting local institutions like AKF to design and implement their own funding schemes, and offering support for developing the tools for providing funding. This approach puts decision-making power directly into the hands of those closest to the ground — those who understand local needs and climate pressures.

AKF was wholly responsible for awarding and disbursing the funds locally to the private companies. Muhammad Ali is project manager at Aga Khan Foundation in Pakistan and in charge of the IKI Small Grants project. As he explains, opportunities for climate financing are meagre in Pakistan. “Businesses face issues in securing loans from institutions. IKI Small Grants allowed us to suit requirements to the local context. We could connect with businesses and give them space to test their climate action ideas.”

Climate challenge meets entrepreneurial spirit and vision

Local cosmetics company North Naturals Private Limited was one of three winners with its plan to introduce and cultivate high-value, low-water crops like saffron and rosa damascene in the country’s highlands. What began as an experiment has become a beacon – showing how business and local communities can work together on regenerative, nature-based business models that restore land, livelihoods, and local pride. The two crops are well-suited to the changing climate, requiring little water and no chemical inputs. The idea quickly gained favour.

Traditional farming in Chitral’s Mulkhow Valley had become increasingly difficult. 53 natural springs dried up between 1998 and 2008, and conventional cash crops like wheat were failing. But this new initiative, supported by IKI Small Grants, asked a simple question: What if climate change didn’t just represent risk, but opportunity? “We’re introducing crops that match the new climate reality,” explains Ali. “Saffron and roses use less water, grow well at altitude, and create value that wasn’t possible with conventional crops.”

Results rooted in local knowledge

By training 140 farmers in how to grow saffron and rosa damascene – reaching over 500 community members indirectly – the project covers an area of 14 hectares and brings traditional wisdom back into action. Composting, once sidelined for synthetic inputs, has been revived using leftover crop waste. Previously burned, releasing carbon, this waste is now transformed into organic fertiliser. Over 50 tons of factory and farm waste were converted into ten tons of compost for organic farming, helping enrich the soil for growing saffron. “Saffron is more than a crop. It’s a return to our roots,” says Manzur. “I remember how my father’s generation shared manure and worked the land together. Now we’re doing it again.”

Women have also become stewards of this shift. North Naturals trained 100 women in cultivation, harvest and processing of the plants and Manzur’s wife proudly explains how she helped other village women use saffron not only for cooking but also as a natural remedy for winter illnesses in children. “It brings us together. We support each other.”

High value, low input, tangible impacts

Although the first harvest was modest, the 85% growth rate of the saffron bulbs bodes well for future yields – and for transforming unproductive land into sustainable income. “Last year, I spent 150,000 Pakistani rupees (around 450 euros) on wheat and barely broke even,” Manzur recalls. “Saffron is different. It can finally let our land provide us with reliable income.”

Even in the early stages, the results are noticeable. Farmers who once struggled to break even with water-intensive wheat are beginning to see saffron as a viable alternative. The project has already led to reduced carbon emissions and improved soil conditions. In this project alone, local farmers planted 12,000 rosa damascene plants and 2.5 tons of saffron bulbs. Across all three countries, AKF’s business challenge reached almost 4,000 people directly – almost half women – and contributed to advancing resilience through climate-smart solutions.

Beyond the highlands: A scalable model

The early success of the highlands project points toward a replicable model – not just for Pakistan, but for any region where climate pressure meets entrepreneurial drive. By working with and through regional partners like AKF, small ideas that bigger funding institutions often overlook can receive funding for local needs. “Compared to other donors, IKI Small Grants let us test a high-risk idea, in a high-altitude region, and it worked,” says Muhammad Ali. “They gave us space to grow.”

From replacing carbon-emitting fertilizers to strengthening community cohesion, this initiative proves that small grants can yield big shifts. “Despite some reluctance initially to diversify from wheat with its quicker returns, communities now see the results,” says Ali. “It takes time to get the returns from saffron and rose cultivation and harvesting. It’s not just about cultivation. It’s about training and learning. The future is better now. Yes.”

More about the project

Turning climate risks to business opportunities – Climate-Smart Business Challenge Initiative

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Aga Khan Foundation

Across the drylands of northern Kenya and the foothills of Nepal, forests that faced drought, slow degradation and invasions of alien plant species are now springing back to life — thanks to the local communities that depend on them. With support from Germany’s International Climate Initiative, people across continents have taken the lead in restoring almost 300 hectares of damaged ecosystems, removing thousands of tonnes of invasive species, and planting and protecting tens of thousands native seedlings. The result is not just greener landscapes, but renewed local engagement, ownership, and resilience in the face of climate change.

The forest is everything

In Kenya’s Mukogodo Forest, Maasai tribesman Nicholas Kodei expresses what the land means to his people: “We call it Pasenai, meaning everything. The forest is our total dependence.” At nearly 30,000 hectares, the Mukogodo Forest is the country’s largest national forest reserve. It provides water, medicinal plants, grazing land, and wildlife habitats for indigenous communities – especially during times of drought. But this ecosystem has come under threat. Invasive plants like Opuntia stricta, a large cactus normally at home in the Americas, have spread quickly across degraded areas, crowding out and choking native vegetation and reducing the productivity of land that families rely on. In addition, drought has robbed the community of the means to cultivating crops and raising livestock.

Thousands of kilometres to the east, in Nepal’s Barandabhar forest, communities face similar challenges. The fast-growing vine plant Mikania micrantha, also originally from the Americas and locally known as the “green devil,” has taken over large swaths of forest, smothering biodiversity and threatening livelihoods. “This unique and rich forest is vital for biodiversity, local livelihoods and human health,” says Lila Nath Sharma of ForestAction Nepal. “Conserving it is no longer optional – it is essential.”

Bringing together traditional and modern resources in Nepal

In response to these growing threats, two locally-led reforestation efforts took root, supported by a combined total funding of around €275,000 from IKI Small Grants. In Nepal, ForestAction Nepal and several community forest user groups mobilized to remove invasive species and protect and nurture native trees.

Equipped with kutto hoes and simple tools, local residents – mostly women from disadvantaged backgrounds – cleared over 1,500 tonnes of invasive plants from nearly 200 hectares of forest. Once cleared, they planted 50,000 native seedlings to help the forest regenerate naturally.

A concerted effort for regeneration in Kenya

In Kenya, the organisation IMPACT (Indigenous Movement for Peace Advancement and Conflict Transformation) coordinated a similar effort in Laikipia County, reaching over 5,000 people across the Mukogodo Forest region after receiving approximately €170,000 in funding from IKI Small Grants. Youth were trained in tree nursery management, women led reforestation campaigns, and elders provided guidance in land-use planning. On 75 hectares of forest land, the alien cacti were cleared, grass seeds were sewn, and tree nurseries were built for crop farming.

“We’ve had five years of drought and we were trying to cultivate crops and we got nothing,” says Nicholas Kodei. “Now in our tree nursery we intend to propagate 10,000 seedlings every year. Already, we’ve harvested 20 tonnes of maize and 5 tonnes of beans.”

Turning thickets into compost, cactus into wine, marmalade and methane

After the clean-up, a particularly innovative outcome came from Nepal, where communities began turning the cleared invasive weed into compost. “The bushes are regularly cleared and converted into manure,” explains Kumar Gurung, a member of a local forest user group. “Compared to buffalo or chicken manure from the market, this compost makes our chilies, tomatoes, and paddy grow faster,” adds Deepak Lama, a local farmer.

Meanwhile, in Kenya, neighbouring communities in Laikipia County have found creative ways to put the invasive Opuntia stricta cactus species to good use. In another IKI Small Grants project with the local Institute for Peace Development and Innovation that is transitioning from use of firewood to use of biogas, the cactus is now being transformed into biogas, wine, and marmalade, turning an ecological challenge into a source of sustainable energy and income. Both of these examples of innovative uses not only help control the spread of invasive species but also boost local livelihoods and circular economies.

Local responsibility key to regreening sustainably

While the metrics added up for both projects are impressive – 275 hectares restored, 60,000 seedlings planted, over 1,500 tonnes of invasive species removed – the true success lies in the shift toward local ownership. In both Kenya and Nepal, communities have deepened their knowledge of ecosystems, developed practical land management skills, and rekindled ties to the forest. “The biggest positive we’ve seen is the community owning up to the management of the forests and surrounding rangelands,” says Lestan Kimiri of the ILMAMUSI Community Forest Association in Kenya.

Local solutions applied globally

From Chitwan in Nepal to Mukogodo in Kenya, these projects demonstrate how nature-based solutions – when led by local communities and backed by meaningful support – can restore not just ecosystems, but the relationships people have with their land. And how local solutions can be shared, adapted and applied globally. In late 2023, ForestAction Nepal was one of 11 IKI Small Grants organisations invited to Kathmandu to showcase their impact to an audience of peers, stakeholders and donors – and establish a working relationship with other reforestation projects. Likewise, IMPACT was one of 40 organisations invited to share its results with representatives of government, business, research and the donor community in Nairobi in early 2024. As Frank Krämer, Manager at IKI Small Grants, puts it: “One of our aims is for organisations to implement their projects and then share their solutions, learn from each other, and duplicate where possible. Locally tried and tested approaches to protecting and regreening forests are essential for a world we can all breathe in.”

More about the projects

Grassroot communities taking action for resilient ecosystems in the Mukogodo forest | IKI Small Grants

Managing invasive species in community forests in Nepal | IKI Small Grants

ABOUT THE ORGANISATIONS

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IMPACT Kenya website

ForestAction Nepal website

With support from Germany’s International Climate Initiative, Benin’s National Fund for Environment and Climate (FNEC) is working with local organisations to conserve woodlands and pastures, empower communities and transform livelihoods through fish farming, beekeeping and other sustainable sources of income.

Safourath Seïdou, a young farmer living in Bourandou, a community in Benin’s northeastern Bembèrèkè municipality, could never have imagined that she would one day engage in fish farming in the middle of a forest. Of around 3,000 villagers directly impacted by FNEC’s small grants programme for local climate and biodiversity action across the country, she is transforming how she makes a livelihood.

“I did not know you could farm fish like this. With FNEC I learnt how to grow and feed them, everything.” The transition to fish farming, beekeeping, or other sustainable sources of income also relieves the biodiversity of the Sinatabé forest, as the local communities exploit it less, for instance, by collecting firewood or converting the forest into farmland.

Local impact through local organisations

For Dr. Apollinaire Gnanvi, director of Benin’s FNEC, this is the sort of impact he had envisioned with the fund’s small-grant initiative for climate and biodiversity action. With a 670,000 euro grant from Germany’s IKI Small Grants in 2021, the funding institution conducted a nation-wide call for proposals and financed five projects managed and run by Beninese non-governmental organisations (NGOs) in local communities. “The impacts are multiple and diverse,” Gnanvi explains. “Overall, living conditions have improved for populations, especially those near forests.” Besides around 3,000 people directly benefiting from the NGOs’ activities, Gnanvi adds, “almost 3,000 hectares of land have been restored.” This is the equivalent of about 4,000 soccer fields.

Benin’s nature reserves and ecosystems under pressure

Benin’s forests and pastures are important sources of livelihoods, sustenance and social cohesion in communities. Besides feeling the effects of climate change, the country’s nature reserves are under demographic pressure, suffering from over-exploitation due to increasing poverty and food insecurity in surrounding areas. The focus of the FNEC programme together with IKI Small Grants was to adapt agricultural practices to climate change, protect biodiversity, manage pastures, and sustainably develop resources for generating incomes without affecting the environment and biodiversity adversely. Conducting its own call for proposals, 40 project ideas were submitted. Five NGOs received financial and technical support of up to 90,000 euros each.

New sources of income for local communities

For example, the NGO Association Féminine pour une Jeunesse Epanouie (AFEJE) worked with FNEC to counter forest degradation by restoring vegetation and establishing sustainable land use methods. In the forest’s surrounding areas, they trained local communities in sustainable land management and created alternative income opportunities, including beekeeping, sustainable fisheries, and rabbit breeding. For Pierre Adje Assogba from AFEJE, the project benefits both nature and people: “Regenerating nature allows inhabitants a better quality of life and income without exerting pressure on the forests. The forest is secured.” For FNEC’s director, Appolinaire Gnanvi, economic empowerment goes hand in hand with nature conservation. “People now have income-generating activities. And these projects improve economic, social as well as environmental conditions,” he states.

Women’s voices heard and respected

Key to safeguarding sustainable development, the projects also focused on improving the role of women in local communities. Gnanvi explains a substantial outcome is “the involvement of women in decision-making processes at the communal level. This is significant because, in the past, women did not participate in decision-making.” Their participation now allows them to be spokespersons in their communities. Their needs and vulnerabilities are addressed, and by giving them a chance to earn their own incomes, women are earning more money than before. This means says Gnanvi, “women can invest part of the income they earn in their children’s education.”

The future for FNEC

The success of the projects has led to further cooperation with IKI Small Grants, mobilising more funds and support for climate change adaptation in Benin. “We started working with IKI Small Grants in 2021 and completed the first generation of projects with significant results. IKI Small Grants recognised it by endorsing another funding round,” Gnanvi remarks. Three successful projects from the first call for proposals were chosen for scaling up in other similar affected regions – this time financed with a significant amount of FNEC’s own resources. For funding institutions like FNEC in Benin, cooperating with IKI Small Grants was an investment in their institutional future, and a stepping stone for receiving larger funding. In early 2025, Gnanvi explains FNEC has managed to accrue $16 million from the United Nations’ Green Climate Fund and the Adaptation Fund.

Respect and rescue for the sacred forest

In Sinatabé forest, funding and support from Germany’s IKI Small Grants programme through Benin’s FNEC feels very close and very real. Local communities are restoring and conserving woodlands. Trees are protected from felling. Local ranger Désiré Mignanwindé explains, “last year; all these areas were deserted and used for agricultural activities. Now, they are completely covered. It is very rare to see forest areas gaining over agricultural land. This is a true innovation.”

The innovation, however, lies in a return to a shared sense of ownership and respect for the forest, which is considered sacred to the local population – and key to local social cohesion. As Solange Akochamou, a village inhabitant, notes, “Other forests have suffered bushfires. We do not have this problem. Everyone now understands this forest is untouchable.”

More about the project

New approaches for climate and biodiversity action | IKI Small Grants

ABOUT THE ORGANISATION

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Website FNEC Bénin