Turning climate risk into opportunity in the Himalayas

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.

Regional innovations for advancing resilience on the ground

Across the three countries, India, Pakistan and Tajikistan, AKF’s business challenge reached almost 4,000 people directly – almost half women. Besides the above North Naturals project in Chitral, local companies received funds for introducing sustainable farming methods, including hydroponics and greenhouse systems in Tajikistan, bio-fertilizer from farm waste in India, and further soil-regenerating projects in Pakistan. 

Solar-powered technologies played a central role, with small businesses being funded to promote solar irrigation in Tajikistan, solar cold storage in India, and mobile solar pumps in Pakistan for regenerative agriculture. India also saw the private sector promote climate-resilient beekeeping, while developing a carbon credit application in Pakistan – each offering new income streams based on sustainability. Together, these local innovations turned climate risks into opportunity and contributed to advancing resilience and cutting over 45 tons of CO₂ emissions through climate-smart solutions.