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Germany's KfW bank loans IFAD €400m to help rural poor adapt to climate change

19 novembre 2021 | 16.45
LETTURA: 1 minuti

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Germany's state-owned bank KfW has agreed to loan the United Nations International Fund for Agricultural Development 400 million euros to boost its efforts to combat hunger and poverty and help the rural poor adapt to climate change.

“KfW’s injection of funding to rural development and resilience is incredibly timely. At COP26 earlier this month, we heard the desperate pleas for increased financial support from countries who are vulnerable to climate change and who are experiencing how erratic weather deepens hunger and poverty,” said Gilbert F. Houngbo, president of Rome-based IFAD.

“IFAD and KfW are very much aligned in our commitment to rural prosperity, and to invest in tackling hunger and poverty in the face of climate change," Houngbo added.

The UN’s climate summit (COP26) which ended last week, saw a call for greater financing to help the world’s poorest countries adapt to the devastating impacts of natural disasters and more erratic weather. Rural small farmers are especially vulnerable to climate-related shocks, and IFAD’s investments help to build their resilience and adapt to extreme weather events such as flooding and drought.

The loan from KfW, on behalf of Germany’s Federal Ministry for Economic Cooperation and Development (BMZ), will be used by IFAD to help finance its programme of loans and grants which is expected to total up to 3.5 billion dollars in 2022-2024.

The funds will help approximately 140 million rural people increase their output and raise their incomes through better market access and rural financial services. It will also increase climate resilience, and contribute to creating employment and improved food security and nutrition for the world’s most vulnerable people, according to the IFAD statement.

KfW is one of IFAD’s primary lenders. In 2014, KfW and IFAD signed a Framework Agreement to grant IFAD loans for an amount of up to 400 million.

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