Agreement sets up US$50 million debt relief programme for outstanding debt

Rome, 23 April 2010 – Things are looking up for the people of Haiti with the Executive Board of the International Fund for Agricultural Development (IFAD) approving a debt-relief package for the disaster-stricken nation in its meeting this week.

“The agreement provides the basis for permanent debt forgiveness of Haiti’s debt burden to our organization,” said Kanayo F. Nwanze, IFAD President. “Without this type of relief, Haiti would have been hard pressed to repay its outstanding loans to the organization, to the detriment of the critical reconstruction and development activities. With the generous contributions from our members – plus a significant investment on our part – we are breaking that cycle.”

The net present value of Haiti’s debt to IFAD is US$50.7 million. Under the agreement, IFAD ― an international financial institution and a specialized United Nations agency dedicated to eradicating poverty and hunger in rural areas of developing countries ― will contribute up to 30 per cent of the debt relief requirement, with member states needing to contribute the remaining 70 per cent.

“A small portion of Haiti’s debt was already forgiven by organizations like IFAD under the Highly Indebted Poor Countries Debt Initiative, but the bulk remained,” said Josefina Stubbs, Director of IFAD’s Latin America and the Caribbean Division. “By relieving the country of this burden, we are freeing up funds for redevelopment and reconstruction.”

The process of reconstruction and development in Haiti has already begun. IFAD responded rapidly to the January earthquake with a $2.5 million grant for irrigation and watershed rehabilitation in a project that is expected to benefit some 12,000 households in rural areas directly affected by the earthquake.

Press release No.: IFAD/29/2010

The International Fund for Agricultural Development (IFAD) works with poor rural people to enable them to grow and sell more food, increase their incomes and determine the direction of their own lives. Since 1978, IFAD has invested over US$11 billion in grants and low-interest loans to developing countries, empowering some 350 million people to break out of poverty. IFAD is an international financial institution and a specialized UN agency based in Rome – the UN’s food and agricultural hub. It is a unique partnership of 165 members from the Organization of the Petroleum Exporting Countries (OPEC), other developing countries and the Organisation for Economic Co-operation and Development (OECD).