The European Investment Bank (EIB) has agreed to lend the United Nation’s (UN) International Fund for Agricultural Development (IFAD) some €500m for investment aimed at strengthening food security in those countries most hit by climate change.
The €500m will back IFAD’s programme of targeted loans aimed at reducing poverty in rural areas and increase its support to small-scale farmers as they adapt to climate change and cope with the current global food, fertiliser and fuel crisis.
“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,” said IFAD president Alvaro Lario.
EIB vice-president Ambroise Fayolle shared Lario’s opinion of the €500m investment, stating that it will help IFAD 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”.
“The EIB recognises 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,” Fayolle said.
The €500m loan from the EIB will be provided to IFAD in two tranches.
Some €150m will be made available immediately and the remaining €350m is expected to be distributed over the next two years. The loan has a tenor of 20 years and a grace period of five years.