IFAD’s new financing framework means more investment in poor rural communities

Rome, 6 May 2015 – The Executive Board of the International Fund for Agricultural Development (IFAD) recently approved the Sovereign Borrowing Framework, a unique and innovative financial policy tool created 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,” said Kanayo F. Nwanze, President of IFAD. “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.”

Meeting the ambition of the new Sustainable Development Goals that will be adopted in September 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 focuses on the 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 in this direction late last year, the Fund signed a framework agreement with Germany’s KfW Development Bank for up to EUR 400 million and a first loan of EUR 100 million.

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