IFAD and World Bank Forge New Financing Pact to Transform Rural Economies and Jobs

World Bank Group President Ajay Banga highlighted agriculture's potential to generate jobs and economic growth for younger populations, particularly in rural areas.

The International Fund for Agricultural Development (IFAD) and the World Bank have signed a new Co-Financing Framework Agreement designed to increase joint investment in rural economies, food systems and employment opportunities, strengthening a partnership that has connected the two institutions since 1978.

Signed during the 2026 Annual Meetings of the International Monetary Fund and the World Bank Group in Bangkok, the framework comes as a record generation of young people reaches working age during a period of slower economic growth and greater uncertainty. The institutions plan to use their combined financing capacity, global reach and rural development expertise to build more resilient communities, support entrepreneurship and create jobs in places where agriculture remains central to household incomes and local economies.

Rural Investment Puts Jobs and Food Security at the Centre

IFAD President Alvaro Lario said the partnership gives the two organisations the scale and expertise needed to transform rural economies and agrifood systems, and the renewed framework is expected to translate their shared priorities into larger investments, stronger resilience, improved food security and more employment opportunities.

World Bank Group President Ajay Banga highlighted agriculture's potential to generate jobs and economic growth for younger populations, particularly in rural areas. He said closer cooperation could help smallholder farmers raise productivity, gain better access to markets, attract private investment and build stronger businesses within agricultural value chains.

The agreement builds on major joint initiatives including AgriConnect, which seeks to support agricultural transformation for 300 million smallholder farmers by 2030, and Water Forward, which is working towards improved water security for 1 billion people by the end of the decade.

Co-Financing Has More Than Doubled Since 2021

The World Bank Group is IFAD's largest multilateral development bank partner, with cooperation covering project financing, policy discussions and international development initiatives. Co-financing between IFAD and the World Bank's International Development Association increased from about US$646 million in 2021 to US$1.56 billion in 2025, showing the growing scale of their joint investment activity.

The new framework is intended to identify potential joint projects earlier and develop them systematically throughout the investment cycle. One example is a US$70.5 million national programme in Lesotho, where cooperation has already created nearly 1,500 jobs and delivered nutrition education to 217,000 people. More than 106,000 people have adopted climate-smart agricultural practices through the programme, and agro-weather services have reached over 900,000 people.

These results illustrate how rural investment can connect employment, food production, climate resilience and access to practical information instead of treating them as separate development challenges.

New Framework Simplifies Joint Projects and Supports IFAD's 2028–2030 Priorities

The agreement modernises how IFAD and the World Bank co-finance country-level investments, enabling greater use of shared arrangements for technical support, procurement, financial management, disbursement, and environmental and social oversight. These common processes are expected to make it easier to design and deliver joint projects without removing the independent policies, financing decisions or accountability requirements of either institution.

The framework will also support priorities under IFAD's 14th replenishment cycle covering 2028 to 2030, with investment expected to focus on resilience, economic opportunity and rural livelihood transformation.

The agreement will initially remain in force for five years and automatically renew for another five years. Building on nearly five decades of cooperation, the renewed partnership places rural communities, smallholder farmers and younger workers at the centre of an effort to expand investment in food systems and create stronger economic opportunities across developing economies.