The Executive Board of the International Fund for Agricultural Development (IFAD) recently approved a new Sovereign Borrowing Framework, an innovative financial policy tool, to meet the increased need for investing in the Fund’s agricultural development projects.
“This framework provides the means to leverage additional funding for our work in remote areas where few others venture,” Kanayo F. Nwanze, President of IFA said recently. “As we look to how we will finance the post-2015 agenda, IFAD believes that financing tools like this one are essential to transforming rural areas into vibrant places where women and men can thrive.”
There are new Sustainable Development Goals which will be adopted in September, and meeting these new goals will require a substantial range of domestic and international investments from both the public and private sectors.
Development institutions need to broaden their financing instruments in order to attract additional finance and support their partners in making the best use of these resources.
The framework will focus on parameters within which IFAD may borrow from sovereign states and state-supported institutions.
IFAD’s goal is to support rural people so they can improve their food and nutrition security, increase their incomes and strengthen their resilience by investing in agricultural development projects that bring about rural transformation.
In order to reach more rural people and increase its impact, IFAD will continue to expand its funding base by leveraging additional resources.
As a first step late last year, the Fund signed a framework agreement with Germany’s KfW Development Bank for up to 400 million Euros and a first loan of 100 million euros.
The International Fund for Agricultural Development (IFAD) invests in rural people, empowering them to reduce poverty, increase food security, improve nutrition and strengthen resilience.
Since 1978, the fund has provided over US$16.3 billion in grants and low-interest loans to projects that have reached more than 438 million people. IFAD is a specialized United Nations agency based in Rome.