Rome, 18 October 2010 – A US$ 10 million supplementary loan from the International Fund for Agricultural Development (IFAD) to the People’s Republic of Bangladesh will improve rural livelihoods through investments in sustainable management of water resources, including flood management, drainage improvement and water conservation.

The loan agreement for the participatory Small-scale Water Resources Sector Project was signed today in Rome by Masud Bin Momem, Ambassador of the People’s Republic of Bangladesh, and Kanayo F. Nwanze, President of IFAD.

The project due to start operations in January 2011, received an initial IFAD loan of US$ 22 million in September 2009. Under the project, this supplementary IFAD loan will enable an increase in the total number of water management schemes from 230 to 270. The project is being co-financed by the Asian Development Bank through a loan of US$ 55 million.  

Bangladesh faces both severe annual flooding and water shortages in the dry season as well as river-induced erosion. The situation is further aggravated by urban encroachment of agricultural land and the food demands of an ever-increasing population. Effective participatory water management is critical in ensuring increased and sustainable agricultural production, together with improved livelihoods for the rural poor.

The project is expected to benefit some 324,000 households consisting of small and marginal farmers, and also landless households who will benefit from agricultural wage labour opportunities and from non-farm employment generated by broad-based agricultural growth.

To date, IFAD has financed 27 projects and programmes in Bangladesh for a total investment of US$ 532.3 million benefiting 8,680,390 households.

Press release No.: IFAD/66/2010

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$12 billion in grants and low-interest loans to developing countries, empowering more than 360 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).