The Islamic Development Bank (IsDB) and the International Fund for Agricultural Development (IFAD) have signed a new agreement, aimed at mobilizing up to $750m in co-financing to drive sustainable agricultural development.

The expanded partnership, targeted at stepping up joint investment in food systems and rural transformation, combines the financing power, specialised expertise, and global reach of both institutions. Together, they will scale up investments to advance their shared goals: transforming rural economies, eradicating poverty, and strengthening food security.

Chairman of the IsDB Group, Dr. Muhammad Al Jasser, said the renewed partnership between the two institutions will build on nearly five decades of successful cooperation.

“Together, we will leverage our collective expertise and resources to strengthen resilience, expand opportunities, and improve the lives of rural communities across our member countries.”

The President of IFAD, Alvaro Lario, highlighted the economic ripple effect of the initiative: “Through this agreement, we are scaling up investment in the first mile of food systems to create jobs, increase incomes and build more prosperous and resilient rural economies. When rural people have the opportunity to build businesses, connect to markets, and earn a decent living, the benefits extend far beyond rural areas.”
 
Under the new Cooperation and Co-financing Agreement, the IsDB and IFAD are developing a joint action plan to translate the ambitious goal into tangible investments. The plan will broaden cooperation across critical areas, including agribusiness value chains, market access, rural finance and financial inclusion, climate adaptation, sustainable natural resource management, and water access. The agreement paves the way for expanded private-sector operations to support agribusinesses and rural small- to medium-sized enterprises. 

To maximize impact, the partnership will leverage the full capabilities of the wider IsDB Group. This collaborative approach creates new avenues for blending development finance, trade finance, investment, and risk mitigation to support rural transformation.

Participating affiliates include the Islamic Corporation for the Development of the Private Sector (ICD), the International Islamic Trade Finance Corporation (ITFC), and the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC).
 
This landmark agreement marks a dynamic new chapter in a partnership that began in 1980. Since then, IsDB and IFAD have successfully co-financed 29 projects with a combined value of approximately $1.45b.

The new $750m target underscores a bold, joint commitment to accelerate this cooperation and deliver transformative investment at greater scale across common member countries.