Annual

Report

Market Development Facility

Annual

Report

Market Development Facility

MDF interventions
benefitted
585,045
people

generated
USD200 million
in additional
income

stimulated
USD 36.6million
in Private Sector
Investment

and positively
impacted
39,215
women

Climate Change

Key Achievements in 2025

For many emerging markets, the climate transition is unfolding alongside rising exposure to climate shocks.

Small island states in the Pacific face high energy costs, limited grid coverage and increasing vulnerability to extreme weather events. Countries such as Sri Lanka and Timor-Leste remain heavily dependent on imported fossil fuels while seeking to expand energy access and strengthen economic resilience.

These dynamics are reshaping incentives for firms and households. Rising fuel prices, high electricity tariffs, improving renewable technologies and expanding sustainability standards are driving demand for renewable technologies, resource-efficiency services and climate-resilient agricultural solutions.

However, adoption depends not only on technology availability, but also on viable commercial models, accessible finance and supportive market systems.

  • In alignment with DFAT’s International Development Policy, MDF continued to integrate climate considerations across its portfolio. MDF works with private and public market actors to develop commercially viable solutions that address the effects of climate change while improving productivity and competitiveness. The program focuses on identifying where changing incentives create opportunities for market innovation. This includes supporting firms that supply renewable technologies, efficiency services and climate-resilient agricultural inputs, as well as strengthening supporting systems, such as information, finance, standards and regulation, that enable wider adoption.

    MDF’s climate investments also align with host government priorities, including National Adaptation Plans and Nationally Determined Contributions under the Paris Agreement. By partnering with firms and industry bodies, MDF catalyses private investment that contributes to these objectives, while ensuring the scalability and sustainability of climate-smart solutions.

  • In 2025, MDF stimulated AUD1.5 million private investment in climate-related solutions, and 50 per cent of the program’s budget was eligible to contribute to DFAT’s climate finance goal in 2024-25, exceeding its target of 30 per cent.

    Several developments in 2025 indicate growing market interest in climate- related opportunities:

  • MDF’s work with agribusinesses demonstrated the business case for production, retail and distribution of resilience-enhancing inputs, technologies and information, reaching over 118,600 farmers in 2025, enabling them to prepare for, cope with or recover from climate change-driven weather events and pest and disease outbreaks.
  • There were early signs of increased private investment in renewable energy technologies across MDF countries, including rooftop solar, biogas installations, EV charging infrastructure and energy-efficient upgrades.
  • MDF signed 66 new partnerships focused on climate change adaptation and mitigation in 2025, reflecting growing market appetite for climate-related solutions. This included collaborating with energy-efficiency service providers in Fiji’s outsourcing services sector and Sri Lanka’s tourism sector and partnering with a regional industry association to overcome barriers to financing in the Pacific region.

MDF continued to generate research and convene industry stakeholders on climate-related issues and opportunities. This included a sustainability expo at the Tourism Super Week in Fiji; a workshop in Vanuatu on demand for solar financial products, based on MDF research; and renewable energy awareness events in Timor-Leste. In Sri Lanka, MDF delivered a workshop for DFAT on food security and climate-resilient inputs such as improved fertiliser.

MDF shared lessons from integrating climate change considerations into its portfolio in a BEAM Exchange webinar, ‘Climate change evolution in MSD: Lessons from the Market Development Facility.’ MDF’s Climate Change Manager also explored the practical application of Market Systems Development (MSD) to channel private investment into adaptation and mitigation, in a blog for the Springfield Centre.

Research, Impact Measurement and Inclusion

The Research, Impact Measurement and Inclusion (RIMI) team helps MDF understand markets, assess program impact, and use data to guide implementation and inform stakeholders.

The team ensures that MDF’s interventions are grounded in market insights, measured rigorously, and aligned with priorities such as GEDSI and climate resilience. More detail on progress on these priorities can be found in the next section on GEDSI.

In 2025 the 11-person RIMI team conducted 86 field activities, covering over 2,100 interviews with a variety of stakeholders including businesses, government, farmers and workers across MDF countries. The interviews helped to identify opportunities, establish baselines and monitor progress of ongoing work. RIMI supported the development of 94 new intervention concepts during the year, nearly 11 per cent more than in 2024 and double the number approved in 2023.

Disability Equality

MDF continued advancing disability equity across its portfolio.
Through its ongoing partnership with Maven, Palladium’s in-house access and inclusion service, MDF delivered Foundations of Disability Equity training for all staff, with follow-up sessions on digital accessibility for communications, Washington Group questions for monitoring and accessible tourism opportunities for all country offices.

Social Inclusion

MDF partnerships also address broader forms of exclusion linked to geography, age and social status. In 2025 MDF worked in geographically isolated communities where remoteness and weak infrastructure limit access to markets and services.

Gender Equality

MDF supported women’s participation as producers, workers, entrepreneurs and decision-makers, particularly in sectors offering stronger commercial returns.

Cumulative results to date

0
women benefitted through MDF's work
0
people with disability benefitted from better access to inputs and services
0
additional income earned by women
0
farmers accessed climate-resilient inputs and tools

130 partnerships
relevant to climate change 

130 partnerships
relevant to climate change 

93 partnerships
relevant to disability inclusion 

93 partnerships
relevant to disability inclusion 

193 partnerships
relevant to women’s economic empowerment 

193 partnerships
relevant to women’s economic empowermentÂ