IFAD Named Best ESG-Linked MTN Issuer, Cementing Its Rapid Rise in Sustainable Finance Markets

The Global Capital MTN Awards are the only comprehensive awards dedicated specifically to the medium-term note market, with winners selected by market participants.

The International Fund for Agricultural Development (IFAD) has been recognized as the Best Issuer for ESG-Linked Medium Term Notes (MTNs) at the 2025 Global Capital MTN Awards ceremony in London, marking a significant milestone for the Rome-based UN agency that only entered international capital markets three years ago.

The award highlights IFAD’s growing credibility among global investors and its success in mobilizing private capital at scale to finance sustainable development outcomes for rural communities in developing countries.

Industry Recognition in a Competitive Market

The Global Capital MTN Awards are the only comprehensive awards dedicated specifically to the medium-term note market, with winners selected by market participants. The recognition signals strong industry confidence in IFAD’s approach to ESG-linked issuance, impact transparency, and disciplined capital market strategy.

Diane Menville, IFAD’s Associate Vice-President and Chief Financial Officer, described the award as particularly meaningful given the institution’s relatively recent entry into capital markets.

“Being recognized as the Best Issuer for ESG-linked MTNs in 2025 is an extraordinary honour for IFAD which entered capital markets only recently. The recognition is even more meaningful by being included alongside seasoned institutions such as the International Bank for Reconstruction and Development and the Central American Bank for Economic Integration,” she said.

Menville emphasized that the award validates IFAD’s broader strategic objective: mobilizing investments to transform rural economies, strengthen food security, and enhance long-term stability in vulnerable regions.

From Concessional Financing to Capital Markets

IFAD entered capital markets in 2022 as part of a strategic shift to diversify its funding base beyond traditional donor contributions. Since then, the institution has progressively expanded its investor base, partnering with both private and public investors that prioritize environmental, social and governance (ESG) outcomes.

The agency has successfully attracted:

• Private asset managers

• Central banks

• Mutual insurance companies

• Public pension funds

Many of these investors maintain strong ESG mandates aligned with the 2030 Sustainable Development Goals (SDGs), creating a natural alignment between IFAD’s development mission and investor sustainability requirements.

This evolution positions IFAD as a bridge between global capital markets and rural development finance — a sector historically underfunded despite its central role in poverty reduction and food systems resilience.

Strong Credit Ratings Bolster Market Confidence

A key factor underpinning IFAD’s successful market entry has been its strong credit profile. The institution holds:

• AA+ rating from Fitch

• AA+ rating with positive outlook from S&P

These high-grade ratings have enabled IFAD to issue debt on competitive terms while maintaining investor confidence in its financial strength and governance standards.

The ratings reflect IFAD’s prudent financial management, conservative balance sheet structure, and backing from its member states.

“Use of Proceeds” Model Anchored in Impact

Unlike some ESG-linked instruments that tie performance to broad sustainability indicators, IFAD issues exclusively “use of proceeds” bonds. This means all funds raised in capital markets are directed toward clearly defined, high-impact investments.

Proceeds finance projects that support:

• Smallholder farmers

• Rural communities

• Local agribusinesses

• Climate adaptation and resilience initiatives

• Food security and rural livelihoods in developing countries

This model ensures traceability of funds and measurable development outcomes — key factors in attracting impact-oriented investors.

All issuances fall under IFAD’s Sustainable Development Finance Framework, launched in 2021 and aligned with the Sustainability Bond Guidelines of the International Capital Market Association (ICMA). This alignment strengthens transparency and reporting credibility.

$1.1 Billion Raised Since Market Debut

Since its inaugural bond issuance, IFAD has issued thirteen bonds totaling US$1.1 billion, demonstrating steady scaling of its capital markets programme.

The rapid growth reflects:

• Strong investor appetite for development-focused ESG assets

• Increasing institutional demand for impact-driven fixed income products

• Confidence in IFAD’s governance and reporting standards

The recognition at the Global Capital MTN Awards signals that IFAD has moved beyond being a newcomer to becoming an established and trusted ESG issuer within a competitive global marketplace.

Implications for Development Finance

The award comes at a time when development finance institutions are under pressure to mobilize significantly greater private capital to bridge widening SDG financing gaps.

Rural economies — home to the majority of the world’s poorest populations — face mounting challenges from climate change, food price volatility, and economic instability. By leveraging capital markets, IFAD aims to expand financing capacity without overreliance on traditional donor replenishments.

The recognition reinforces a broader trend: multilateral institutions are increasingly blending public mandates with private capital instruments to accelerate sustainable development.

For IFAD, the accolade is not merely symbolic. It validates a strategic transformation that positions the agency as a key actor in sustainable finance — mobilizing global capital to support rural resilience, food security, and inclusive economic growth.