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EIB to support IFAD’s global food security program with €500M loan

EIB to support IFAD’s global food security program with €500M loan

Arab Finance: The European Investment Bank (EIB) will provide a €500 loan to the UN’s International Fund for Agricultural Development (IFAD) to support the latter’s program aiming at improving food security and reducing poverty in rural areas, according to an emailed press release on November 14th.

The loan will finance IFAD’s urgent response to help small-scale farmers to adapt to climate change and cope with the current global food, fertilizer, and fuel crisis.

It is worth mentioning that an initial portion amounting to €150 million will be available immediately, while the remaining €350 million is likely to be distributed over the next two years.

The loan has a tenor of 20 years and a grace period of five years.

“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,” President of IFAD Alvaro Lario said.

“To meet the growing need for funds, we are diversifying our funding sources and increasing our borrowing program,” he added.

The financing comes in line with EIB’s target to boost cooperation with clients, EU Member States, development finance institutions, civil society, and many other partners under its recently launched EIB Global program.

“The EIB recognizes 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,” Ambroise Fayolle, Vice President of EIB, said.

“The EIB’s €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,” Fayolle noted.

This came after EIB and IFAD signed their first financial agreement on the sidelines of COP27 in Sharm El-Sheikh.

The fund marks EIB’s first direct support for IFAD following decades of cooperation between the two institutions to support local food security and agriculture investments in emerging and developing countries around the world.

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