IFAD inaugural bond issuance to Asian investor Dai-Ichi Frontier Life ramps up investments to strengthen small-scale farmers’

The International Fund for Agricultural Development (IFAD) has today issued its first-ever bond in Asia of US$50 million with the Dai-ichi Frontier Life Insurance Co., Ltd. (Dai-ichi Frontier Life), setting the stage for increased investment in some of the world’s most vulnerable rural communities. The investment comes at a time when millions of rural people are at risk of falling into hunger and poverty due to skyrocketing global food, energy and fertilizer prices, and more frequent and extreme weather shocks driven by climate change.

“We are extremely pleased to be partnering with Dai-ichi Fronter Life on this inaugural issue in Asia. They share our commitment to diversify and scale up funding to ensure that small-scale farmers who produce one third of the world’s food can adapt to climate change and other shocks and continue producing food and building better lives for their families,” said Katherine Meighan, Associate Vice-President of IFAD, General Counsel and acting Chief Financial Officer.

“In what are currently very volatile market conditions, we are especially pleased to have been able to secure such a long maturity. This is another step toward building a strong funding track record for IFAD,” said Natalia Toschi, IFAD’s Head of Funding, at IFAD’s Financial Operations Department.

“IFAD-financed programmes and projects in countries around the world make a tangible contribution to many of the United Nations’ Sustainable Development Goals (SDGs). We believe our commitment to our policy-holders is best achieved by investing the assets we manage on their behalf into initiatives such as those of IFAD to realize beneficial changes that bring about a sustainable society,” said Masakatsu Mizukami, Executive Officer from Dai-ichi Frontier Life.

With approximately JPY 9 trillion of assets under management as of 31 March 2022, Dai-Ichi Frontier Life, a provider of savings-type life and pensions insurance, is focused on being a life-long partner to its policy holders in the era of the 100-year life. Dai-Ichi Frontier Life’s support for the UN’s 17 SDGs is at the heart of its promotion of Environmental Social and Governance (ESG) investments, as well as being core to achieving the Group’s goal of ‘realizing well-being’ and to upholding its corporate principles of ‘respecting human rights for all’ and ‘responding to climate change’.

The notes are being issued under a structure arranged solely by J.P. Morgan.

Three quarters of the world’s poorest people live in the rural areas of developing countries. Most depend on agriculture for their livelihoods. With a growing global population and volatile food and energy prices, climate change has the potential to push millions more vulnerable people into extreme poverty and hunger by 2030. Today, one in ten people (more than 800 million globally) suffer from hunger. Those numbers will likely increase in the coming years without greater investment in small-scale farmers’ resilience to climate change impacts, market disruptions and other economic shocks. IFAD addresses these fragile situations through GDP growth generated by agriculture which is two to three times more effective at reducing poverty and food insecurity than growth in any other sector.

IFAD has been exploring new funding models to channel more resources to developing countries and vulnerable rural populations. IFAD issued its first bond placement in early June this year. It is the first United Nations Fund and the only UN body and specialized agency other than the World Bank Group to enter the capital markets.

Examples of IFAD funded projects:

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Outline of bonds:

  • Issue amount: USD 50 million
  • Issue date: June 22, 2022
  • Maturity: June 22, 2037 (15 years)

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