IFAD Secures $344M Through Sustainability Bonds to Support 8.1 Million Farmers

Impact Report 2023 Highlights Expansion of Rural Development Projects, Enhancing Global Food Security and Climate Resilience.

The International Fund for Agricultural Development (IFAD) is poised to impact the lives of over 8.1 million people in the world’s most vulnerable farming communities through new agricultural projects, made possible by $344 million raised via sustainability bonds issued by IFAD in 2022 and 2023. The Impact Report 2023, released today, outlines how these investments will enhance food security, improve resilience to climate change, and create economic opportunities for small-scale farmers across the globe.

Leveraging Sustainability Bonds to Drive Change

Founded in 1977, IFAD’s mission is to combat hunger and poverty by empowering small-scale farmers and transforming rural economies. At the end of 2022, IFAD’s ongoing projects had already benefited 78.6 million people, a number that grew to 95.6 million by the end of 2023. With the new funds raised through sustainability bonds, IFAD expects to reach an additional 8.1 million people over the coming years, providing much-needed support to rural farmers, who produce one-third of the world’s food but remain disproportionately affected by climate change and poverty.

“By bringing together like-minded investors, including private impact investors, we can drive finance to make a real difference in the lives of millions of people and contribute to a world free from hunger and poverty,” said Alvaro Lario, President of IFAD. “This innovative financial approach not only delivers financial returns but also creates stable food supplies, bolsters resilience to climate change, and enhances global stability. It’s a win-win for investors, rural communities, and the world.”

Fostering Sustainable Development Goals (SDGs)

The report reveals that IFAD’s sustainability bonds have contributed significantly to achieving the UN’s Sustainable Development Goals (SDGs). The bonds have directly supported 10 SDGs and 16 SDG targets in 2022 and 2023, with indirect contributions to 16 SDGs and 58 SDG targets. Key priorities funded by the bonds include increasing market access for small-scale farmers, enhancing environmental sustainability, and fostering climate-resilient agricultural practices.

Of the $344 million raised, $154.8 million (45%) will focus on improving market access for rural farmers, while $98 million (29%) will be allocated to environmental and natural resource management projects.

Global Reach and Expanding Impact

IFAD’s efforts to expand its global reach were also emphasized in the report. In 2023, the fund extended its activities across five regions—Latin America and the Caribbean, Asia and the Pacific, Near East, North Africa and Europe, West and Central Africa, and East and Southern Africa—up from two regions in 2022. This expanded outreach will enable IFAD to address the needs of small-scale farmers in diverse geographical areas and strengthen global food security.

Future Financial Strategies and Replenishment Goals

As IFAD continues to enhance its financial capacity, the Impact Report 2023 also highlights the organization’s ongoing efforts to secure new capital for its 13th replenishment. With a target of raising $2 billion from 2025 to 2027, IFAD is preparing a work program worth at least $10 billion. This replenishment will further support IFAD’s mission to improve the livelihoods of rural populations and drive agricultural growth in some of the world’s most vulnerable regions.

Since 2020, IFAD has been issuing sustainability bonds to bolster its funding capacity. These bonds enable the organization to raise funds in international financial markets, increasing its lending potential at a time when many governments face budgetary constraints. In 2022, IFAD became the first UN body and one of only a few international organizations to enter capital markets with a sustainability bond issuance. By the end of 2024, IFAD expects to have raised a total of $644 million through these innovative bonds.

A Critical Role in Addressing Hunger and Poverty

The need for IFAD’s work is urgent: In 2023, approximately 735 million people around the world suffered from hunger, and nearly 700 million people lived in extreme poverty, surviving on less than $2.15 per day. Around 80% of the world’s poorest live in rural areas of developing countries, where small-scale farmers often face challenges such as climate change, food insecurity, and lack of access to markets and infrastructure.

Through this innovative financing and its ongoing projects, IFAD aims to continue improving the lives of millions of small-scale farmers, increasing agricultural productivity, fostering economic stability, and contributing to global food security. The organization’s commitment to supporting sustainable development and rural economies remains stronger than ever.