IFAD Issues SEK 900M Sustainable Bond to Support Rural Development and Combat Global Poverty

Kåpan and Skandia Invest in IFAD’s Mission to Transform Rural Livelihoods Worldwide.

The United Nations International Fund for Agricultural Development (IFAD) successfully issued its tenth sustainable bond, valued at 900 million Swedish Krona (SEK), under its Sustainable Development Finance Framework. The bond was purchased by Kåpan, a Swedish pension fund managing state employees’ pensions, and Skandia, a Swedish insurer and repeat investor that had previously participated in IFAD’s inaugural SEK transaction in 2024.

The funds raised will finance IFAD’s global development initiatives aimed at transforming rural areas into more productive and resilient regions. IFAD’s projects focus on empowering rural populations through access to modern tools, inputs, technologies, credit, markets, and value chains. They also emphasize climate-adaptive agricultural practices, ensuring small-scale farmers can sustainably increase their production despite challenges posed by climate change.

Investor Commitment to Sustainability

This issuance underscores the shared commitment of IFAD and its investors to promoting sustainable development and social inclusion.

• Kåpan’s Chief Investment Officer, Marie Giertz, expressed enthusiasm for the fund’s first investment in IFAD, highlighting its strong credit rating and targeted impact on poverty reduction in rural communities.
• Skandia’s Head of Fixed Income and Currency Management, Alexander Onica, reaffirmed the company’s commitment to sustainable investments that deliver both financial returns and broader societal benefits.

Addressing Rural Poverty and Hunger

Small-scale farming plays a critical role in the economies of developing countries, producing one-third of the world’s food and supporting the livelihoods of over three billion people in rural areas. Despite this, rural regions remain poverty hotspots, with 80% of the world’s extremely poor residing in these areas.

Global challenges persist:

• In 2023, approximately 735 million people faced hunger.
• Nearly 700 million people lived in extreme poverty, surviving on less than $2.15 per day.

IFAD’s efforts focus on reversing these statistics. Between 2019 and 2021, the organization’s investments improved the incomes of 77 million people and enhanced food security for an additional 57 million.

The Economic and Social Value of Agricultural Investment

Research indicates that growth in agriculture is two to three times more effective at reducing poverty compared to growth in other sectors. By leveraging investments such as this SEK 900 million bond, rural communities can achieve transformative economic and social development.

Expanding IFAD’s Vision

With the launch of its three-year IFAD13 program, this bond issuance sets a strong foundation for achieving its ambitious goals.

• Natalia Toschi, Head of Funding at IFAD, expressed satisfaction with the support from Kåpan and Skandia, emphasizing their alignment with IFAD’s vision of sustainable and inclusive rural development.

A Shared Path Forward

This bond highlights the essential collaboration between international development organizations and forward-thinking investors. Through such partnerships, IFAD continues to make strides in alleviating poverty, enhancing food security, and fostering resilience in rural areas worldwide.