Finance in Common Summit - The Role of Finance and Public Development Banks for Promoting Sustainable Agriculture Worldwide

FINANCE IN COMMON SUMMIT 

The Role of Finance and Public Development Banks for Promoting Sustainable Agriculture Worldwide 

Address

By

Dr QU Dongyu, FAO Director-General 

As prepared

19 October 2021

Rome, Italy

 

Ladies and Gentlemen,

 

1.         FAO is participating today together with many of our longstanding partners.

 

2.         With the World Bank, we have a cooperative program signed in 1964.

 

3.         We have been collaborating with IFAD since its inception in 1978.

 

4.         FAO started working with the EBRD over 30 years ago, and together we have built a flagship program for the promotion of sustainable private investments in agri-food systems.

 

5.         FAO also supports National Financial Institutions to improve the quantity and quality of their agricultural loan portfolios.

 

Ladies and Gentlemen,

 

6.         We all agree on the importance of agri-food systems to achieve the 2030 Agenda and the Sustainable Development Goals, as well as the Paris Agreement.

 

7.         I wish to thank the Italian G20 Presidency, the Cassa di Depositi e Prestiti (CDP) and the organizers, for having put the transformation of agri-food systems at the top of the agenda of this year’s Finance in Common Summit.

 

8.         Agri-food systems are crucial to improve livelihoods, for food security, job creation, gender empowerment, and for addressing the impacts of the climate crisis.

 

9.         All this requires significant investments!

 

10.       There are low-cost, high-impact interventions that can help hundreds of millions of people get rid of hunger.

 

11.       To achieve SDG2, we need to attract an annual investment of about 40 to 50 US billion dollars until 2030 to fund targeted interventions.

 

12.       In addition, 80% of the finance demand of smallholders’ farmers is currently unmet in developing countries.

 

13.       In sub-Saharan Africa alone, 3 out of 4 small to medium agri-food enterprises lack sufficient access to finance.

 

14.       With the annual gap between supply and demand estimated at around 65 billion US Dollars.

 

15.       More and better financing is needed!

 

16.       Public Development Banks are part of the solution.

 

17.       They have a development mandate, long-term perspective and ability to finance both the private and public sector.

 

18.       They can inject more financing to help fill the funding gap,

 

19.       And can also provide better financing to promote more sustainable agri-food systems worldwide

 

20.       Reaching smallholders and small to medium agri-food enterprises in developing countries is challenging.

 

21.       For this reason, “scaling up investments” is one of the Programme Priority Areas in FAO’s new Strategic Framework 2022-2031,

 

22.       To support the transformation to more efficient, more inclusive, more resilient and more sustainable agri-food systems.

 

23.       FAO’s flagship programs such as the Hand-in-Hand Initiative and the Food Coalition can help build our agri-food systems back better at the country level,

 

24.       With the technical support of the FAO Investment Centre, which supports public investment programs and projects from project design to monitoring and evaluation.

 

25.       In 2020, the FAO Investment Centre supported the design of 38 large programs worth over 6.6 billion US Dollars in investments.

 

26.       We can help to green your investments, by assisting to access financing from the Green Climate Fund, and in the design of climate adaptation projects.

 

27.       In 2020, the Green Climate Fund Board approved 7 FAO projects worth over 337 million US Dollars.

 

28.       FAO also develops information systems and a range of tools for measuring sustainability, including carbon accounting, water efficiency and biodiversity.

 

29.       One of these instruments, the ABC-Map toolkit for measuring Adaptation-Biodiversity-Carbone will be presented in one of the summit’s thematic sessions.

 

30.       FAO supports enabling policies for private sector investment in sustainable agri-food systems, as well as private investments through innovative finance, and blended finance.

 

31.       Together with the EBRD, we have been developing agri-food sector and policy studies, and facilitating public-private dialogue.

 

32.       We have been working with the European Commission to structure its investments into blended funds, monitor operations and increase collaboration with European Development Finance Institutions.

 

33.       In 2020, the FAO Investment Centre reviewed more than 70 investment proposals, representing nearly 300 million EUROs of potential financing to the private sector. 

 

34.       We also need to improve access to finance at local level, working with local financial institutions and Public Development Banks.

 

35.       For example, together with the European Commission, we are supporting the Uganda Development Bank to grow its agricultural lending portfolio and strengthen its capacity in agri-risk management, while offering innovative products and services to its clients.

 

Dear Colleagues,

 

36.       Knowledge is the first de-risking instrument, and we need to expand and deepen our collaboration for effective knowledge sharing.

 

37.       An example of this is our increased cooperation with the CDP.

 

38.       I invite all Public Development Banks to become FAO partners, to collectively and coherently better support this important agenda.

 

39.       FAO stands firmly committed to achieve Better Production, Better Nutrition, a Better Environment and a Better Life for all, leaving no one behind!

 

40.       Thank you!