European Investment Bank confirms EUR 500 million loan to IFAD to invest in global food security – World
Sharm el-Sheikh (Egypt), November 14, 2022 – The European Investment Bank (EIB) and the United Nations’ International Fund for Agricultural Development (IFAD) signed their first financial agreement today. The EIB will lend EUR 500 million to IFAD in support of IFAD’s targeted lending program aimed at improving food security and reducing poverty in rural areas. The new EIB financing will strengthen IFAD’s urgent response to help small-scale farmers adapt to climate change and cope with the current global food, fertilizer and fuel crisis.
“IFAD is a fundraiser for rural communities. With global hunger and poverty rising alarmingly amid multiple worsening crises, the loan comes at a critical time. This will help IFAD multiply its impact on the ground by 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 program,” he added.
The current loan fits perfectly with the EIB’s objective to increase its cooperation with clients, EU Member States, development finance institutions, civil society and many other partners under its programme. recently launched EIB Global. IFAD is the only United Nations agency that focuses exclusively on investing in rural areas and small farmers.
“The EIB recognizes the urgent need to support vulnerable communities around the world threatened by the risk of famine, unpredictable and extreme weather conditions, food shortages and agricultural challenges. The EIB’s EUR 500 million support to IFAD will help scale up targeted and sustainable investments to strengthen food security, improve agriculture, fight poverty and increase agricultural productivity in rural communities most affected by the climate change,” said Ambroise Fayolle, Vice-President of the European Investment Bank.
The EIB’s first direct support to IFAD follows decades of cooperation between the two institutions to support local investments in food security and agriculture in emerging and developing countries around the world.
The EIB and IFAD share a common vision of improving food security and alleviating poverty in rural areas by helping smallholder farmers and rural communities improve economic opportunities and better adapt to the effects of climate change.
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A first tranche of €150 million will be available immediately and the remaining €350 million is expected to be distributed over the next two years. The loan has a term of 20 years and a grace period of five years.
IFAD became the first United Nations fund and the only United Nations agency (other than the World Bank Group) to enter the capital markets, thanks to its AA+ public credit rating. Led by President Lario as IFAD’s then Chief Financial Officer, the UN fund issued its first sustainability bonds through two private placements for a total of US$150 million in June 2022 .