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The Hand in Hand Initiative - Building Resilience in the Dry Corridor and Arid Zones of the Central American Economic Integration System (SICA) region is being developed since 2022, involving the eight countries of the region: Belize, Costa Rica, El Salvador, Honduras, Guatemala, Nicaragua, Panama and the Dominican Republic. 

SICA, created in 1991, is the institutional framework of Central American Regional Integration, whose fundamental objective is to achieve the integration of Central America, to establish it as a region of peace, freedom, democracy and development. The region's priority pillars are democratic security, climate change and integrated risk management, social integration, economic integration and institutional strengthening. 

It has the participation of the Executive Secretariat of the Central American Agricultural Council (SECAC), the Central American Commission for Environment and Development (CCAD), the Secretariat for Central American Economic Integration (SIECA), the Regional Center for the Promotion of Micro, Small, and Medium Enterprises (MSMEs) (CEMPROMYPE), under the leadership of the General Secretariat of SICA.  

 This regional initiative seeks to mobilize high-impact socioeconomic and climate-sensitive investments to accelerate agricultural transformation and rural development by generating regional public goods to promote technological innovation in agriculture and more effective governance. Key components include: (i) agricultural zoning for climate risk; (ii) digital soil mapping; (iii) strengthening agricultural research institutes in research, development and innovation; (iv) micro, small and medium enterprises and digital ecosystems; (v) integrated water solutions (to be first presented at the 2024 Investment Forum). These investments complement the national investment proposals from Guatemala and the Dominican Republic that will also be presented at this year's Investment Forum. 

In total, the Regional Initiative is presenting a proposal package costing approximately USD 203 million, with an average internal rate of return (IRR) of 25%. These investments are expected to directly benefit 647,000 families and, considering indirect beneficiaries, support the livelihoods of a total of 2.9 million people. 

 

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Agricultural zoning for climate risk 34 Million USD 506,000 Beneficiaries

Agricultural Zoning for Climate Risk 

The climate risk zoning investment case has three elements for its implementation: i) it provides producers with the necessary information so that they can make decisions based on future climate change scenarios; ii) municipal maps disaggregated by crop and planting date will be prepared; and iii) the range of financing and agricultural insurance options available to producers will be increased. Equipped with these tools, producers and decision-makers will be able to anticipate extreme weather events and the gradual effects of climate change, reducing crop and harvest losses and protecting income and food security in the long term.  

This investment case has a total cost of USD 34 million and will benefit 92,000 basic grains producers in the CSZA of the 8 SICA countries, with potential for expansion to other crops and territories. The intervention is expected to increase the income of each beneficiary family by USD 214 per year. So far, this investment case has raised over USD 1 million in the context of Triangular South-South Cooperation with the Brazilian Cooperation Agency (ABC). The program is strengthening the technical capacities of teams throughout the region, with pilot tests in 40 municipalities. Its estimated IRR is 28%, and its net present value (NPV) is approximately USD 22.3 million. 

Digital soil mapping  59 Million USD 2.811 Million Beneficiaries

Digital Soil Mapping 

This investment's objective is to contribute to sustainable agriculture and soil management by optimizing nutrient monitoring. This requires the development of digital maps that enable informed decision making, and the standardization of soil-related information. The key interventions include: i) survey and collection of soil samples; ii) equipping national laboratories; iii) the development of soil information databases and maps; iv) the development of extension tools and integrated national soil information systems; v) strengthening institutional and individual capacities. 

This investment component will benefit 511,000 producers and has a total cost of USD 59 million. Its IRR is estimated at 24% and its NPV is USD 69 million. Finally, the annual income of each beneficiary family is estimated to be increased by USD 145. 

Strengthening INIA in R&D&I 11.2 Million USD 8 Agriculture and forestry research institutes

Strengthening Agricultural Research Institutes (INIA) in R&D&I 

 To strengthen the INIAs, four interventions have been identified: First, the creation of a database of staple grain and pasture seeds available in each country. Next, the establishment of a regional digital platform for the registration and dissemination of INIA products and innovation services. Third, the strengthening of INIA capacities in the development of research projects and impact evaluations. Finally, the leveraging of financing sources, such as FONTAGRO and other institutions, for regional research and innovation projects. These interventions are expected to streamline the research and innovation initiatives of each INIA and strengthen prospects for cooperation among the region's institutions. 

The cost of this component amounts to USD 11.2 million. Its IRR is estimated at 22% and its NPV is USD 2.4 million. 

 

MSMEs and digital ecosystems 42 Million USD 123,200 Beneficiaries

MSMEs and Digital Ecosystems 

This component of the investment plan aims to strengthen the business skills and digital connectivity capabilities of MSMEs, cooperatives and family farming organizations. This requires the development of investments in information and communication services and technology, applications and the development of digital skills to improve competitiveness and access to markets as well as the expansion of connectivity infrastructure in rural areas. Therefore, there is an identified need for 80 digital ecosystems and one MSME center to be established in each country. 

The total cost of this component amounts to USD 41.9 million. Its IRR is estimated at 24% and its NPV at USD 5.2 million. The program will have 22,400 direct beneficiaries and will strengthen the capacities of 1,600 MSMEs. Each beneficiary's income is estimated to increase by USD 712 per year. 

Integrated water solutions 57 Million USD 120,450 Beneficiaries

Integrated Water Supply Systems for Irrigation 

This investment will seek to manage and develop integrated water solutions for agricultural production and human consumption in vulnerable rural territories; promote water security, resource use efficiency, resilience and climate adaptation; the provision of public goods related to information, science and technology; and strengthen partnerships between SICA, international financial institutions, specialized agencies, the private sector and other stakeholders. 

The first component will cost USD 14.2 million and will provide: public goods focused on information systems and tools for decision making; and productive, environmental and social profiling and water availability studies, as well as the development of national investment plans. A second component that will cost USD 42.3 million, will implement water supply solutions for agricultural production and human consumption (at least four different solutions are proposed according to uses and water storage capacity). 

The total investment will cost USD 56.7 million. It will directly benefit 21,900 people and indirectly benefit another 76,650 people in the Dry Corridor. The annual income of each beneficiary will increase by USD 412. The IRR is expected to be 25% and the NPV is estimated to be USD 80 million. 

 

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For more information, please contact the Hand-in-Hand team.