Press release number: IFAD 32/04

Rome , Monday, 27 September 2004 - The European Commission (EC) and the International Fund for Agricultural Development (IFAD) signed an agreement today designed to promote a closer cooperation between the two institutions in the fields of rural development and poverty reduction.

The Financial and Administrative Framework Agreement (FAFA) was signed at the Brussels headquarters of EC by Poul Nielson, EC Commissioner for Development Cooperation and Humanitarian Aid, and Cyril Enweze, Vice President of IFAD.

The new agreement will allow the two institutions to lower transaction costs for joint projects, access more long-term funding, and identify additional areas for collaboration.

''Supporting poor people's efforts to find sustainable ways to overcome poverty lies at the heart of the EC's development policy,'' says Nielson. ''IFAD's expertise and experience in rural development makes the Fund a valuable partner for our work.''

One of the primary aims of the agreement is to build more effective relationships within the international community to help achieve the Millennium Development Goals.

''Global partnerships for development are the key to halving the proportion of people living in poverty by the year 2015,'' says Enweze.

The EC has a history of collaboration with IFAD. Since 1978, the two institutions have co-financed 20 rural development projects in 14 countries in Africa , Asia , Central America and Eastern Europe , totaling more than USD 121 million. One recent joint effort includes a USD 10.9 million water-management project in Swaziland , which is helping thousands of farmers intensify and diversify crop production with improved irrigation. Earlier this year, the EC transferred USD 9.5 million to IFAD to reduce Nicaragua 's debt under the World Bank-administered HIPC Trust Fund, and USD 1 million to contribute to Guyana 's debt.

IFAD's accession to the FAFA was authorized by its Executive Board earlier this month. As an FAFA adherent, IFAD will also become a member of the EC-UN Working Group that periodically reviews and advises on technical and financial collaboration matters.

---

IFAD is a specialized agency of the United Nations dedicated to combating rural poverty in the most disadvantaged regions of the world. Since 1978, IFAD has invested USD 8.2 billion in 660 rural development projects and programmes, about 250 million rural people have been supported in their efforts to overcome poverty.