IFAD was created in 1977 as an international specialised UN fund to mobilise resources for financing projects specifically designed to improve food production systems, the nutritional level of the poorest populations in developing countries and the conditions of their lives. Through low-interest loans and grants, IFAD develops and finances projects that enable poor rural people to overcome poverty themselves, through individual or collective initiatives, projects and small businesses.

Working with rural poor people, governments, donors, non-governmental organisations, and many other partners, IFAD focuses on country-specific solutions, which can involve increasing rural poor people's access to financial services, markets, technology, land, and other natural resources.

EU Status in IFAD

The EU has a status of a special observer in the IFAD Governing Council and works with the International Fund on specific projects. Because of its specific status of 'observer', the EU does not attend the meetings of the Executive Board (three times per year) or the so-called replenishment meetings but is invited to the yearly meeting of the Governing Council. Despite this 'limited' status, the EU-IFAD cooperation has been growing sharply to reach a solid financial and political partnership.

EU partnership with IFAD

In September 2004, a FAFA was signed by IFAD and the EU. This agreement allows the two institutions to lower transaction costs for joint projects, access more long-term funding and identify more areas for collaboration.

The rationale for EU-IFAD cooperation is based on both the added value which IFAD can offer and the similarity of our approaches towards sustainable rural development. IFAD is present in the field, strengthening technical and institutional capacity in a number of areas of particular interest to the EU, including food security, sustainable rural development, poverty eradication, environment, gender and the dialogue with civil society, and works closely on these issues with rural communities at the grassroots level.

Signature of the MoU

The EU and IFAD signed, on 4 October 2012, a Memorandum of Understanding to further strengthen cooperation and to join resources to scale up respective support to food and nutrition security and agriculture and increase the respective impact in these fields. Cooperation focuses on developing technologies for sustainable agricultural intensification by increasing production by using resources more efficiently, promoting innovative rural financing mechanisms, like private-public funding facilities, that primarily benefit smallholders, providing assistance for small farmers to adapt to climate change, and securing equitable access to land.

EU financial support

Since 1978, the EU has co-financed numerous IFAD rural development projects in Africa, Latin America and the Caribbean, and Eastern Europe, with a contribution of almost €800 million since 2007.

Concluding a round of intensive high-level discussions and meetings throughout 2007, a Contribution Agreement was signed in 2008 to channel, through IFAD, EU financial support to the Consultative Group on International Agricultural Research centres (CGIAR centres). Since then, IFAD has managed the European Commission's funding for the CGIAR.