Promoting rural development in poor regions (IFAD)

active

On behalf of the Federal Ministry for Economic Cooperation and Development (BMZ), KfW signed a EUR 400 million promotional loan with the International Fund for Agricultural Development (IFAD) in November 2021. IFAD is an international financial organization and UN specialized agency with a mandate to combat rural poverty and improve food security in developing countries. Since 1978, IFAD has provided around USD 23.2 billion in grants and low-interest loans for projects that have benefited around 518 million people. Currently (as of 11/2021), IFAD is supporting 203 projects worldwide. Key topics are increasing agricultural production and adapting the agricultural and food industry to climate change. Another focus is currently on dealing with the consequences of the corona pandemic, which is having a negative impact on supply chains worldwide and is therefore particularly affecting the food supply of the poor rural population. With the KfW funds, IFAD can finance a significant part of its planned investments, which will total up to USD 3.5 billion from 2022-2024, thereby massively expanding its support for agricultural and rural development overall and at the same time concentrating the more concessional resources on the poorest countries, especially in Africa. Specifically, the funds help small farmers to increase their production through improved production techniques in crop cultivation and animal husbandry as well as modern, water-saving irrigation systems, to market their products and to clarify land use rights. They will also be used to establish rural financial systems.