Priya Patel
TLDR:
- The International Fund for Agricultural Development (IFAD) is increasing its efforts to boost private sector investments in rural and agricultural development.
- IFAD has been accepted into the Development Finance Institutions Enhanced Blended Concessional Finance working group, aligning it with DFIs and Multilateral Development Banks providing concessional blended finance.
The International Fund for Agricultural Development (IFAD) is focusing on catalyzing private sector investments in rural and agricultural development as global leaders gather at the World Economic Forum in Davos. IFAD has been accepted into the Development Finance Institutions Enhanced Blended Concessional Finance working group, which aims to leverage concessional blended finance for sustainable development. The institution aims to accelerate engagement with the private sector and provide more concessional blended financing to encourage private investments in rural economies. IFAD intends to increase its own direct financing of private sector operations, with a planned investment of over US$100 million from its balance sheet under its Private Sector Financing Programme (PSFP) in 2025-2027.
IFAD’s PSFP aims to scale up private sector investments in rural areas, including supporting farmers organizations, cooperatives, and small- and medium-sized enterprises involved in agribusiness. The program provides funding through debt instruments, risk sharing facilities and guarantees, and equity investments. Its objectives include job creation, economic inclusion of youth, women’s empowerment, and climate adaptation and mitigation.
Since its launch in 2021, the PSFP has financed US$33 million for eight operations and attracted US$155 million in co-financing. IFAD is also leading the development of the Africa Rural Climate Adaptation Finance Mechanism, a US$200 million investment platform launched in collaboration with Equity Bank and funding partners. The mechanism aims to incentivize private sector investment in climate adaptation for small-scale producers in Kenya, Rwanda, Tanzania, and Uganda.
With over 3.1 billion people unable to afford a healthy diet and increasing challenges from climate change, IFAD is striving to find innovative solutions to finance and support rural populations in adapting to climate change and addressing hunger and inequalities.
