The European Investment Bank (EIB) and the UN’s International Fund for Agricultural Development (IFAD) have signed their first financial agreement last week.
The EIB will lend IFAD EUR 500 million in support of IFAD’s programme of targeted loans that aim to improve food security and reduce poverty in rural areas. The new EIB financing will strengthen IFAD’s urgent response to assist small-scale farmers to adapt to climate change and cope with the current global food, fertiliser, and fuel crisis.
“IFAD is an assembler of finance for the benefit of rural communities. With global hunger and poverty alarmingly on the rise amid multiple compounding crises, the loan comes at a critical time. It will help IFAD multiply its impact on the ground supporting the poorest people living in rural areas,” said Alvaro Lario, President of IFAD. “To meet the growing need for funds, we are diversifying our funding sources and increasing our borrowing programme,” he added.
The current loan fits squarely with EIB’s aim to increase its cooperation with clients, EU Member States, development finance institutions, civil society and many other partners under its recently launched EIB Global programme. IFAD is the only UN agency that focuses exclusively on investing in rural areas and small-scale farmers.
“The EIB recognises the urgent need to support vulnerable communities around the world threatened by the risk of famine, unpredictable and extreme weather, food shortages and agricultural challenges. The EIB’s EUR 500 million support for IFAD will help to scale up targeted and sustainable investment to enhance food security, improve farming, tackle poverty and increase agricultural productivity in rural communities most impacted by a changing climate,” said Ambroise Fayolle, Vice President of the European Investment Bank.
The first direct EIB support for IFAD follows decades of cooperation between the two institutions to support local food security and agriculture investments in emerging and developing countries around the world.
The EIB and IFAD share a common vision in improving food security and fighting poverty in rural areas by supporting small-scale farmers and rural communities to improve economic opportunities, and better adapt to the effects of climate change.