Stockholm (NordSIP) – In 2023, about 735 million people suffered from hunger, while nearly 700 million people continued to live in extreme poverty surviving on less than US$2.15 per day, according to UN estimates. Research suggests that economic growth in agriculture is a powerful tool for poverty reduction. Appropriate investments in rural communities can help people in developing countries improve their quality of life.
To this end, the International Fund for Agricultural Development (IFAD) issued a SEK 900 million bond under its Sustainable Development Finance Framework at the end of January 2025. The bond was sold directly to two Swedish institutional investors. Pension provider Kåpan invested SEK500 million. Insurance company Skandia invested the remaining SEK400 million.
IFAD is an international financial institution and a UN-specialized agency, based in Rome where the UN Food and Argriculture Organisation (FAO) is also headquartered. IFAD invests in rural people to empower them to reduce poverty, increase food security, improve nutrition and strengthen resilience.
Rural Impact Investing
“We at Kåpan are very pleased with our first investment in IFAD’s funding program, which alongside a very strong credit rating offers us clear sustainable development impact targeting rural people in developing countries and helping them overcome poverty,” says Marie Giertz, Chief Investment Officer, Kåpan.
The proceeds of this bond issuance will contribute to finance IFAD’s development projects globally, focusing on transforming rural areas to become more productive and prosperous, ultimately improving the livelihoods, food security and resilience of millions of rural people.
“While this type of investment contributes to generating stable returns for our customers and policyholders, it also promotes value creation and improved quality of life on a broader scale. Thus, Skandia continues to play an active role in driving more sustainable development, both in Sweden and globally. We have previously invested in IFAD and we are happy to continue supporting their investment program for rural areas in developing countries,” Alexander Onica, Head of Fixed Income and Currency Management at Skandia, adds.
IFAD’s Mission
IFAD-supported projects work with rural populations to access tools, inputs, and technologies to increase production sustainably, and to access credit, markets and value chains. Through these projects IFAD provides guidance and support on best agricultural crops and practices required to adapt to a changing climate.
Since 1978, IFAD has provided more than US$24 billion in grants and low-interest loans to fund projects in developing countries. Between 2019-2021, IFAD investments improved the incomes of 77 million people and improved the food security of an additional 57 million people.
Small-scale farming and small and rural agri-businesses are essential components of many developing countries’ economies. Small-scale farmers produce one third of the world’s food. About three billion people live in the rural areas of developing countries and rely to a significant extent on small-scale farming for their food and livelihoods. Yet, poverty is concentrated in these areas, where about 80 per cent of the world’s extremely poor live.
