Ifad, the first historic bond for rural development
Issue of bonds for 100 million dollars in collaboration with the Swedish Folksam
The International Fund for Agricultural Development (IFAD) today announced its first sustainable development bond issue in partnership with Folksam, Sweden's leading insurance and pension fund management company, with a $ 100 million bond investment. Capital market entry creates conditions for IFAD to invest more in food security, rural development and economic growth at a time when the war in Ukraine is rocketing food and fertilizer prices worldwide. and energy, exposing further millions of inhabitants of rural areas, already tested by the COVID-19 pandemic, to the risk of suffering from hunger and finding themselves in conditions of poverty.
IFAD is the first Fund in the United Nations system and the only specialized UN institution and agency, other than the World Bank Group, to enter the capital market, following the completion in 2021 of its evaluation process by of the rating companies Standard & Poor's and Fitch, with the assignment by both of them of an AA + level.
"This first issue is a milestone for IFAD and represents an opportunity to enhance its capacity to raise funds to strengthen the resilience of rural populations", said Katherine Meighan, director of the Legal Department and interim head of the Department financial institution of IFAD. "There is an urgent need to increase the scale of investment to ensure that rural people who produce one third of the food consumed in the world can continue to feed their communities and provide a decent future for their children".
According to Natalia Toschi, Head of Funding at IFAD's Department of Financial Management, "the funds obtained from IFAD's first bond issue will increase the Fund's ability to help smallholder farmers adapt to climate change, access supply chains distribution and markets, to further diversify food production".
"The need for investment in agriculture is great. The war in Ukraine, in addition to the suffering of the Ukrainian people, has meant record prices for energy, food and fertilizers. Furthermore, climate change is already affecting farmers in many parts of the country. There is therefore an imminent risk of famine in the poorest countries of the world", said Ylva Wessén, President and CEO of Folksam.
Christopher Flensborg, Head of Climate and Sustainable Finance at SEB, which organized the bond issue, said: “We are very happy to welcome IFAD to the bond market. Their mandate has never been more important and it is a privilege to assist IFAD in raising awareness of food challenges, solutions and safety".
EFA News - European Food Agency