Press Release No. IFAD/35/01

Rome, 14 November - A USD 34.3 million project in the People’s Republic of Bangladesh – The ‘The Sunamganj Community-Based Resource Management Project’ will receive a USD 22 million loan from the International Fund for Agricultural Development (IFAD). A loan agreement was signed today at the Fund’s Headquarters by His Excellency Mohammad Ziauddin, Ambassador of Bangladesh to Italy and Mr. John Westley, Vice-President of the Fund.

The project area is located in the district of Sunamganj in the north-east of Bangladesh, and is characterized by extreme annual flooding events. The target groups are the landless, marginal and small farmer households and women. The project expects to reach a total of 135,000 households. Poverty in this district is caused by a number of factors. Destructive flooding events frequently cause loss of crops and erosion of homesteads. The remoteness and poor communications of the district and the associated lack of services, further increases vulnerability of the rural population. In addition, the target group has limited access to the benefits of a rich resource base, which is controlled by powerful local elites.

The main objective of the ‘Sunamganj Community-Based Resource Management Project’ is to increase the assets and income of the target group households. This will be done by promoting on- and off-farm income generation activities, by developing a village based savings and credit programme, by enhancing food production and consumption from securing better access to the resource base, and by providing employment opportunities. The project will seek to promote community management of resources and the transfer of fishing leases to beneficiary groups. These objectives will be met through the financing of five components designed to assist the poor: labour-intensive infrastructure development, fisheries development, crop and livestock production, micro-finance and institutional support.

Drawing lessons from the UNDP-supported South Asia Poverty Alleviation Project, the project will support the creation of 2250 village organizations, comprising 4500 credit organizations (50% if which will be run by women). The project will be demand-driven and will be financed under IFAD’s Flexible Lending Mechanism with an implementation period of 11 years split into three phases.

With this project, IFAD will have financed 20 loans to the Republic of Bangladesh, for a total amount of approximately USD 295 million.

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IFAD is a specialised agency of the United Nations with the specific mandate of combating hunger and poverty in the most disadvantaged regions of the world. Since 1978 IFAD has financed 584 projects in 114 recipient countries and in the West Bank and Gaza for a total commitment of approximately USD 7.2 billion in loans and grants. Through these projects, about 250 million rural people have had a chance to move out of poverty. IFAD makes the greater part of its resources available to low-income countries on very favourable terms, with up to 40 years for repayment and including a grace period of up to ten years and a service charge of 0.75% per year.