IFAD and AFD Sign Co-Financing Pact to Accelerate Rural Development and Food Systems

“The IFAD-AFD partnership reflects our shared ambition to scale impact in rural development, resilient food systems and food security—advancing prosperity for all,” said IFAD President Alvaro Lario.

In a significant move to scale up global investments in rural development and food systems, the International Fund for Agricultural Development (IFAD) and France’s Agence Française de Développement (AFD) have signed a new Co-Financing Framework Agreement aimed at unlocking more coordinated, high-impact financing for vulnerable rural communities worldwide.

The agreement, formalised by IFAD President Alvaro Lario and AFD Chief Executive Officer Rémy Rioux on the sidelines of the World Bank Group–IMF Spring Meetings, marks a strategic deepening of a decades-long partnership focused on transforming rural economies, strengthening food security, and building resilience against climate shocks.

A Unified Framework for Scaled Impact

The newly established framework is designed to streamline collaboration between the two institutions, enabling them to jointly finance development projects, align policy interventions, and expand knowledge-sharing initiatives. It reflects a shared commitment to address mounting global challenges—including climate change, food insecurity, and rural poverty—through more integrated and efficient financing mechanisms.

“The IFAD-AFD partnership reflects our shared ambition to scale impact in rural development, resilient food systems and food security—advancing prosperity for all,” said IFAD President Alvaro Lario. “With a unified framework, we can invest more effectively and direct financing to the rural communities that need it most.”

The agreement is expected to play a critical role in mobilising capital for small-scale farmers, rural populations, and agri-based small and medium-sized enterprises (SMEs), which are widely recognised as the backbone of food systems in developing economies.

Strengthening Climate-Resilient Agriculture

A key pillar of the partnership is the promotion of climate-resilient agriculture, particularly in regions most vulnerable to environmental and economic shocks. Both institutions will intensify collaboration under the Agri-Public Development Bank (Agri-PDB) Platform—one of the largest coalitions within the Finance in Common (FiCS) initiative, bringing together 142 public development banks across 96 countries.

“Together, we are working to provide more coordinated and impactful financing for climate-resilient agriculture,” said AFD CEO Rémy Rioux. “This agreement is a significant step toward supporting sustainable and inclusive rural transformation, particularly in Africa and other vulnerable contexts.”

Expanding Reach Across Fragile and Emerging Economies

IFAD and AFD have historically focused their joint efforts on regions such as Africa, the Middle East, and fragile states—areas where rural communities face acute challenges related to poverty, food insecurity, and limited access to markets.

The new framework will enhance their ability to deliver targeted interventions in these regions by combining financial resources with technical expertise. It will also prioritise cross-cutting themes such as youth employment, women’s empowerment, biodiversity conservation, and private sector engagement.

Integrated Approach to Development Financing

One of the most notable features of the agreement is its emphasis on operational integration. Both institutions have committed to maximising synergies across their portfolios through:

• Joint supervision missions to ensure project effectiveness

• Harmonised procurement and fiduciary systems to reduce administrative burdens

• Alignment of environmental and social safeguards

• Expanded technical assistance and advisory services

This integrated model is expected to deliver more cohesive programmes, offering rural communities a comprehensive suite of services—from capacity building and financial inclusion to market access and value-chain development.

Decades of Partnership, Billions in Impact

The agreement builds on a robust financial partnership that has already delivered substantial results. Since IFAD’s establishment, AFD has extended two sovereign loans totalling €500 million, alongside a €50 million concessional partner loan, significantly boosting IFAD’s capacity to reach millions of farmers globally.

In addition, AFD has channelled approximately US$136 million in loans to IFAD’s borrowing member states to co-finance development projects, as well as US$26 million in supplementary funding for specific initiatives.

These investments have supported a wide range of activities, including:

• Strengthening agricultural and climate risk management systems

• Enhancing collaboration among public development banks

• Building institutional capacity for African farmers’ organisations

• Facilitating productive use of remittances in rural economies

• Co-financing projects across countries such as Angola, Cuba, the Democratic Republic of Congo, The Gambia, and Nigeria

A Strategic Response to Global Food System Pressures

The agreement comes at a time when global food systems are under unprecedented strain from climate change, geopolitical instability, and supply chain disruptions. By aligning their financial and operational strategies, IFAD and AFD aim to deliver faster, more scalable solutions to these interconnected challenges.

With a renewed focus on innovation, inclusivity, and sustainability, the partnership is poised to play a pivotal role in reshaping rural development financing and ensuring that smallholder farmers—often at the “first mile” of food systems—are not left behind.

Looking Ahead

As development finance institutions increasingly collaborate to maximise impact, the IFAD-AFD agreement sets a benchmark for strategic co-financing in a complex global landscape. By leveraging their combined strengths, the two organisations are positioning themselves to drive transformative change in rural economies and contribute meaningfully to global development goals.