Jeddah-based Islamic Development Bank and UN agency International Fund for Agricultural Development signed a cooperation and co-financing agreement to tackle climate change, improve food and water security and other strategic priorities in common member countries.
The agreement was signed virtually on Wednesday by Bandar Hajjar, IsDB president, and Gilbert F Houngbo, president of IFAD, Saudi Arabia's official news agency SPA reported on Thursday.
As part of the agreement, each of the two institutions will contribute $250 million over the next five years to achieve these goals.
“The renewal of our partnership comes at a time when the world is facing unprecedented socio-economic challenges caused by the Covid-19 pandemic,” Mr Hajjar said.
The IFAD is a specialised agency of the United Nations that works to address poverty and hunger in rural areas of developing countries, while the IsDB is a multilateral development finance institution that is focused on Islamic finance.
The coronavirus pandemic has forced governments around the world to consider ways of re-building more sustainable economies and use the crisis as an opportunity to better tackle climate change challenges.
Countries must take action on climate change now to avert future disasters, accelerate the push for greener economies and boost the economic recovery from the Covid-19 pandemic, the International Monetary Fund's managing director Kristalina Georgieva said.
“Food and water security are strategic priorities for IsDB member countries, most of which are in arid and semi-arid areas. Demographic growth and climate change are increasing the pressure on these vital resources,” Mr Hajjar said.
He added that the IsDB-IFAD partnership will co-create financing and investment programmes that will address these challenges and also help member countries tap into emerging global value chain opportunities to build resilience and create wealth in a post-Covid-19 world.
The agreement will also explore working in areas such as agricultural and rural development, agribusiness, value chain development, improved access to markets and rural financial services, and improved access to employment opportunities, the statement added.