Press release No.: IFAD/33/08

Rome, 17 June 2008 – A new US$32.3 million IFAD-supported project in Azerbaijan will help 22,300 rural poor households increase their incomes, achieve food security and contribute to boosting the country’s economy. The Rural Development Project for the North-West will endeavour to reduce malnutrition in a sustainable manner by improving the olivewoods of small farmers and pastoralists in four districts of north-west Azerbaijan, namely Agstafa, Gazakh, Shamkir and Tovuz.

IFAD will provide a loan of US$17.2 million on highly concessional terms to finance the project under an agreement signed at IFAD’s headquarters in Rome today.

Lennart Båge, President of IFAD, and His Excellency Emil Karimov, Ambassador of the Republic of Azerbaijan to Italy, signed the agreement.

Most rural people living in north-west Azerbaijan depend heavily on irrigated agriculture; but, the irrigation system in this part of the country has long been in serious decline due to neglect, lack of maintenance and resource constraints. The proposed project will rehabilitate the deteriorating irrigation infrastructure and introduce participatory irrigation management (PIM) practices to ensure efficient and sustainable system management. It will also assist small farmers in improving crop and livestock productivity and diversifying their incomes through improved access to appropriate technology, rural finance, small enterprise development services, market chains and other support services.

“The project will enhance the capability and self-reliance of communities to look after their own affairs and plan and implement their own development initiatives more effectively,” said Abdallah Rahman, IFAD’s country programme Manager for Azerbaijan. “It will help improve smallholder production, productivity and competitiveness, introducing PIM and improving marketing arrangements and links.”

The project will strengthen the local institutions responsible for the main irrigation infrastructure and for water delivery to the farm gate. Service providers will be engaged to provide specialist inputs in technology transfer, business development services and micro credit. Water User Associations and rural producer groups will identify, supervise, and assume operation and management responsibility for community and group investments.

At farm level, it is foreseen that project activities will generate increased crop and livestock yields as a result of better agricultural and veterinary services and the adoption of modern technical practices. At the off-farm level, household income is expected to increase through trading and value addition activities; promotion and support of group formation; and improved supply chain management, including forward contracting. As a result of the project, annual household income is estimated to increase by 35-41 per cent, or between US$3,020 and US$3,204.

With this project, IFAD will have financed four projects in Azerbaijan for a total of commitment of over US$ 47 million.

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IFAD was created 30 years ago to tackle rural poverty, a key consequence of the droughts and famines of the early 1970s. Since 1978, IFAD has invested more than US$10 billion in low-interest loans and grants that have helped over 300 million very poor rural women and men increase their incomes and provide for their families. IFAD is an international financial institution and a specialized United Nations agency. It is a global partnership of OECD, OPEC and other developing countries. Today, IFAD supports more than 200 programmes and projects in 81 developing countries and one territory.