Press Release No. IFAD/38/2001

Rome, 16 November 2001 - The International Fund for Agricultural Development (IFAD) and the Government of the Islamic Republic of Mauritania signed today a loan agreement on highly concessional terms for co-financing a Poverty Reduction Project in Aftout South and Karakoro regions. This IFAD-initiated project will have a total cost of USD 23.0 million. The Agreement was signed at the Fund's headquarters in Rome by the Vice President of IFAD, Mr. John Westley, and by His Excellency Mr Hamoud Ould Ely, Ambassador of the Islamic Republic of Mauritania.

The Poverty Reduction Project in Aftout South and Karakoro is IFAD’s ninth operation in the Islamic Republic of Mauritania, with a total investment of about USD 64 million, in loans - all extended on highly concessional terms - and grants. IFAD’s cooperation in the country, which has spanned more than 20 years, is now oriented towards support for the decentralization process and the implementation of the national Poverty Reduction Strategy recently adopted by the government in rural areas. Although Mauritania’s domestic economy has significantly improved over the past years – economic growth rate shows 4.9% between 1993 and 1997 - the country still depends on international aid and has high indebtedness. Mauritania became eligible for debt relief, and IFAD has decided in September 2000 to participate in the debt relief for this country under the Enhanced Debt Initiative for Heavily Indebted Poor Countries (HIPCs).

IFAD’s loan is in the amount of USD 11.3 million. Co-financing in the amount of USD 3.5 million will be provided by the OPEC Fund. The contribution provided by the Government of the Islamic Republic of Mauritania will amount to USD 7.9 million. This is the first time that a government co-finances a project out of the proceeds of the debt relief provided under HIPC-DI. Beneficiaries themselves will provide the equivalent of USD 177 700.

The Poverty Reduction Project in Aftout South and Karakoro project was designed to be a major instrument for the implementation of the country poverty reduction strategy, particularly in the poorest rural areas. The project area, which covers about 26 000 km 2, is not well connected with the rest of the country because of inadequate road infrastructures, and lacks markets and drinking water facilities. About 150 000 people, including traditionally nomadic with limited farming experience live in this area. Women and youth, who are traditionally excluded from decision-making processes and face severe problems to access resources and information, will be particularly targeted by the project.

Specifically, the project aims to improve in a sustainable way: a) the capacities of beneficiary organizations, decentralized institutions and local service
providers; b) access for rural people to basic infrastructure and services; and c) the incomes of the rural poor, particularly those of the most vulnerable groups, small farmers, women and youth.

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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.