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
About the organisation
The Aga Khan Foundation (AKF) is a private, not-for-profit, non-denominational, international development agency established in 1967 by His Highness the Aga Khan. AKF brings together human, financial, and technical resources to address some of the challenges faced by the poorest and most marginalised communities in the world. With an emphasis on women and girls, AKF invests in human potential, expanding opportunities and improving quality of life.
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