Bangladesh and IFAD’s US$324m investment in climate-resilient rural development

The government of Bangladesh and the International Fund for Agricultural Development (IFAD) are carrying forward their long-standing partnership with two investments worth a combined US$324 million to strengthen climate resilience, rural livelihoods and food systems. 

Implemented by national institutions with partners, the investments aim to reach 2.5 million people by improving rural infrastructure and climate information while expanding access to finance, skills, markets and nutritious food.

The partnership reached two milestones with the launch of US$112 million Climate Resilience and Livelihood Enhancement Project (CRALEP), in partnership with the Government of Denmark. It follows the launch of the US$212 million Growth for Climate Resilient and Environmental Entrepreneurship and Nutrition (Green) project.

“Bangladesh’s partnership with IFAD has grown over nearly 50 years to include financing, innovation, technical assistance, and the scaling up of successful approaches,” said Moslema Naznin, wing chief at the Economic Relations Division (ERD) of the ministry of finance. 

“These two investments address connected priorities for rural development: infrastructure that withstands climate shocks and the finance, skills and market opportunities to build more secure livelihoods.”

Each investment is delivered through a national institution and answers a different constraint faced by rural households and enterprises. CRALEP will be implemented by the Local Government Engineering Department, with a focus on the flood-prone Haor and drought-prone High Barind regions. 

Green will be implemented by PKSF under the Financial Institutions Division, working across the Haor, coastal, High Barind and river char areas. Together, they pair physical resilience with economic opportunities.

“These two projects reflect a shared commitment to support rural communities to adapt and prosper in a changing climate,” said Valantine Achancho, IFAD country director and representative in Bangladesh. “Each project has its own role, but both are designed to give women, young people and rural families stronger foundations for their livelihoods, closely aligned with the government’s priorities.”

Over six years, CRALEP aims to reach 1.45 million people across 33 upazilas. It will improve village roads, rural markets and boat landing facilities. In the Haor, it will also support village services, raised shelters for people and harvested crops, and nature-based protection against erosion. 

Flash flood early warning in the Haor and drought forecasting in the High Barind will help communities prepare for climate risks. Vocational and entrepreneurship training will expand opportunities for young people, while labor contracting societies will support employment for poor women.

The project brings three partners into a single financing package: US$70 million in IFAD financing, US$10 million in Government of Denmark grant financing and approximately US$31.75 million from the Government of Bangladesh.

“The intervention we are looking at is very timely, and combining climate resilience with livelihood enhancement, which is what the project is all about, is very important. We hope this will reduce the negative impacts of climatic variability and increase community resilience,” said Anders B. Karlsen, deputy head of mission, Embassy of Denmark in Bangladesh.

Green is a six-year investment that aims to reach more than 250,000 rural households. It will support climate-resilient and environmentally responsible food systems, inclusive financial services and stronger institutional capacity. Through finance combined with technical assistance, skills, green technologies and market partnerships, the project aims to create employment and increase incomes of small-scale producers and rural entrepreneurs. It will also support safer and more nutritious food and reduce post-harvest losses. Green includes US$51.4 million in IFAD financing.

Bangladesh and IFAD have worked together since 1978, with 39 projects representing a total investment of approximately US$4.9 billion, including US$1.1 billion in IFAD’s own funds. That cooperation has reached 11.7 million rural households, supporting small-scale agriculture, rural finance and value chain development. CRALEP and Green build on that record, applying proven approaches in new geographies and deepening climate adaptation and access to finance for rural people.