MSMEs to access M68 million climate adaptation grants

The Ministry of Trade, Industry and Business Development has launched a M68 million MSME Resilience Building and Preparedness Support Facility aimed at helping micro, small and medium enterprises (MSMEs) strengthen their ability to withstand the growing impacts of climate change.

Established under the World Bank-funded Competitiveness and Financial Inclusion (CAFI) Project, the facility will provide matching grants to eligible formally registered businesses seeking to invest in climate-resilient equipment and minor infrastructure upgrades designed to reduce their exposure to climate-related risks.

Under the programme, the government will finance up to 80 percent of approved resilience investments, while beneficiary businesses will contribute the remaining 20 percent. The cost-sharing arrangement is intended to promote ownership while making resilience-enhancing technologies more accessible to enterprises.

The initiative comes at a time when Lesotho is experiencing increasingly frequent and severe climate-related shocks, including prolonged droughts, floods, strong winds and heavy snowfall, all of which have disrupted business operations, damaged infrastructure, destroyed agricultural production and weakened economic activity.

Speaking at the launch, Minister of Trade Motlatsi Maqelepo described climate change as one of the country’s most pressing economic challenges, saying the facility represents a strategic investment in the future competitiveness of Basotho enterprises.

“Through the World Bank-financed Competitiveness and Financial Inclusion (CAFI) Project, the Government is introducing the Climate Resilience and Preparedness Support Facility to help Basotho enterprises prepare for, adapt to, and withstand the growing impacts of climate change. This initiative is not merely a grant programme; it is an investment in the future resilience, productivity and competitiveness of our businesses and our economy,” Maqelepo said.

He noted that climate change has evolved from an environmental concern into a significant economic threat affecting production, supply chains, employment and public finances.

“Climate change is no longer a distant environmental concern. It is one of the most significant economic challenges confronting our nation. Increasingly frequent droughts, floods, extreme weather events and changing climatic conditions are disrupting agricultural production, damaging business assets, interrupting supply chains, threatening jobs and placing immense pressure on livelihoods and public finances,” he said.

According to the minister, strengthening climate resilience is now critical to protecting productive investments and sustaining economic growth.

“The Government recognises that strengthening climate resilience is therefore not only an environmental imperative; it is an economic necessity. Building resilient businesses means protecting jobs, safeguarding investments, maintaining production and ensuring that our economy continues to grow despite increasing climate risks,” he said.

The facility is expected to support businesses in acquiring resilience-building equipment and undertaking targeted infrastructure improvements that reduce exposure to climate hazards before disasters strike. By prioritising prevention rather than recovery, the programme aims to minimise business disruptions, protect livelihoods and enhance long-term operational continuity.

Maqelepo said the initiative aligns with broader government efforts to strengthen national disaster preparedness and risk management.

He revealed that, through the CAFI Project, the Ministry of Finance, in collaboration with the Disaster Management Authority, developed the Disaster Risk Financing Strategy, which was approved by Cabinet and entered implementation in 2025.

“The Strategy provides a comprehensive framework for mobilising and managing financial resources before disasters occur, enabling Government to respond more rapidly, efficiently and effectively when crises arise,” he said.

“Today, we are extending that same forward-looking approach to the private sector.”

Unlike conventional disaster response programmes that provide assistance after calamities occur, the new facility is focused on prevention and preparedness.

“While other government programmes focus on supporting communities after disasters have occurred, the Ministry of Trade, Industry and Business Development is investing in prevention. Our objective is to ensure that businesses are equipped to anticipate climate risks, reduce their vulnerability and continue operating even under adverse conditions,” the minister said.

He emphasised that resilient businesses are essential to sustaining communities, preserving jobs and supporting economic stability.

“Resilient businesses create resilient communities. When businesses continue operating, they preserve jobs, sustain household incomes, maintain supply chains and contribute to national economic stability,” he added.

The matching grant programme will finance investments in climate-resilient technologies, equipment and infrastructure that strengthen operational resilience while improving enterprise productivity and competitiveness.

Maqelepo stressed that addressing climate change requires coordinated action between government, the private sector, financial institutions and development partners.

“Climate resilience cannot be achieved by Government alone. It requires collective action by businesses, financial institutions, development partners and every stakeholder committed to the future of our economy,” he said.

Applications for the Climate Resilience and Preparedness Support Facility are now open to eligible formally registered businesses across Lesotho.

Application forms and eligibility requirements are available from the CAFI Project Office, district offices of the Ministry of Trade, Industry and Business Development, and on the CAFI Project website.

Encouraging businesses to apply, Maqelepo said resilience investments are increasingly becoming a prerequisite for long-term competitiveness and sustainability.

“Preparing for climate change is no longer optional; it is essential for business continuity, competitiveness and long-term success. The businesses that invest in resilience today will be the businesses that thrive tomorrow.”

He concluded by urging the private sector to work alongside government in building a more resilient and competitive economy.

“Together, let us build enterprises that can withstand shocks, create sustainable jobs, drive economic transformation and secure a more prosperous future for our nation.”

Seabata Mahao

Seabata Mahao is a general news reporter with special focus on Business and Sports. Started working at Newsday in 2021. Working in a team with a shared goal is what I enjoy most and that gives me the motivation to work under any environment leading to growth.