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EIB Commits Euro 350 Mn Loan to IFAD to Boost Food Security, Alleviate Poverty

This collaboration is a big step forward in the global quest of sustainable agriculture, climate resilience, and equitable economic development in low- and middle-income nations.

Shivam Dwivedi
EIB Commits Euro 350 Mn Loan to IFAD to Boost Food Security, Alleviate Poverty (Photo Source: Reuters)
EIB Commits Euro 350 Mn Loan to IFAD to Boost Food Security, Alleviate Poverty (Photo Source: Reuters)

The European Investment Bank (EIB) and the United Nations International Fund for Agricultural Development (IFAD) have recently solidified their collaboration in low- and middle-income countries across the globe, with a special emphasis on Africa.

In a ceremony held in Rome, the agreements were formally signed by EIB Vice-president Ambroise Fayolle and IFAD President Alvaro Lario. The newly signed agreement encompasses a total financial commitment of Euro 350 million, marking the second finance contract under the Framework agreement worth Euro 500 million that was initially announced in November 2022.

Aligned with the EU's Global Gateway strategy, this EIB financing will bolster IFAD's efforts in assisting small-scale farmers in adapting to the challenges posed by climate change and navigating the ongoing global food crisis, which is intertwined with soaring food, fertilizer, and fuel prices.

This collaboration aims to go beyond enhancing food security alone; it also seeks to strengthen the resilience of small-scale farmers in the face of climate change while preserving natural resources and safeguarding the environment. The first tranche of Euro 150 million was already disbursed in March 2023, allowing IFAD to promptly commence its initiatives.

The signing of the Procedural Framework agreement between the EIB and IFAD will play a pivotal role in deepening the synergies between the two organizations. It will facilitate the implementation of joint public sector projects in countries where they both operate, thereby streamlining project execution and monitoring procurement. This procedural framework aligns with the prevailing trend of cooperation and mutual reliance and draws upon established frameworks with other Multilateral Development Banks (MDBs) to establish efficient and consistent procurement structures.

These agreements fall within the broader framework of the EIB's strategy to strengthen its collaboration with clients, European Union Member States, development finance institutions, civil society, and various other partners. This initiative is spearheaded by the EIB Global branch, which was launched last year and resulted in the bank investing Euro 10.8 billion beyond the borders of the European Union in 2022.

With the signing of these agreements, the EIB and IFAD are further bolstering their partnership to address pressing global challenges. By combining their resources and expertise, they aim to make a tangible and lasting impact on the livelihoods of small-scale farmers, particularly in Africa.

This partnership marks a notable advancement towards fostering sustainable agriculture, enhancing climate resilience, and promoting inclusive economic development across low- and middle-income countries globally.

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