IsDB and IFAD Set US$750m Financing Goal to Boost Farms and Rural Livelihoods

The Cooperation and Co-financing Agreement sets out an expanded investment partnership focused on rural transformation across countries that belong to both institutions.

For rural communities, growing more food is only part of the challenge of making a decent living from agriculture. Access to finance, reliable water supplies and markets where farmers can sell their produce all shape whether a farm or small business can support a family and create jobs for others.

The Islamic Development Bank (IsDB) and the International Fund for Agricultural Development (IFAD) have signed a new agreement to mobilize up to US$750 million in co-financing for sustainable agricultural development. The partnership brings together their financing capacity, specialist knowledge and international reach to strengthen food security, reduce poverty and give rural economies more room to grow.

A US$750 Million Goal Built Around Rural Opportunity

The Cooperation and Co-financing Agreement sets out an expanded investment partnership focused on rural transformation across countries that belong to both institutions. The US$750 million figure is a financing target, with a joint action plan being developed to turn that commitment into investments.

For IFAD President Alvaro Lario, the value of those investments reaches beyond agricultural production to the businesses, jobs and household incomes that depend on it.

"Through this agreement, we are scaling up investment in the first mile of food systems to create jobs, increase incomes and build more prosperous and resilient rural economies," Lario said.

His emphasis on the "first mile" puts rural producers and businesses at the centre of the partnership, recognising that opportunities to earn a living and connect with buyers can benefit communities well beyond the countryside.

Connecting Farms With Finance, Water and Markets

The joint action plan will cover agribusiness value chains, market access, rural finance and financial inclusion, bringing attention to the connections that help agricultural activity become a dependable source of income.

A harvest needs buyers, and a rural business needs access to money to invest in its operations. By addressing these needs together, the institutions intend to support more of the journey between producing food and earning a return from it.

Climate adaptation, sustainable natural resource management and water access are also part of the planned cooperation. These priorities connect the immediate needs of farming communities with the resources they depend on to keep producing in the years ahead.

The agreement creates scope for expanded private-sector operations to support agribusinesses and small and medium-sized rural enterprises, extending the partnership's reach to businesses that can generate employment and strengthen local economies.

Bringing More of the IsDB Group Into the Partnership

The wider IsDB Group will contribute capabilities that go beyond development lending, opening opportunities to combine development finance with trade finance, investment and risk mitigation.

Participating affiliates include the Islamic Corporation for the Development of the Private Sector (ICD), the International Islamic Trade Finance Corporation (ITFC), and the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC).

Their involvement gives the partnership a broader range of financial tools to support rural transformation, including the needs of private businesses and activities connected to trade.

"Together, we will leverage our collective expertise and resources to strengthen resilience, expand opportunities, and improve the lives of rural communities across our member countries," said Dr Muhammad Al Jasser, Chairman of the IsDB Group.

Building on a Partnership That Began in 1980

IsDB and IFAD began their partnership in 1980 and have since co-financed 29 projects worth approximately US$1.45 billion. Al Jasser described the renewed agreement as building on nearly five decades of successful cooperation.

The new financing target signals an effort to scale up that work across their common member countries. The joint action plan will shape how the institutions move from an agreement to projects that address the practical needs of rural people.

The intended results are better opportunities to build businesses, reach markets and earn a decent living, supported by investments that help communities manage climate pressures and protect the natural resources on which their livelihoods depend.