Rome, 23 June 2010 – A new US$38.6 million IFAD-supported project will help create jobs and income-generating activities to reduce rural poverty in Yemen. The Economic Opportunities Programme will develop value chains for three high-value agricultural commodities, namely coffee, honey and horticulture products. The programme, which covers the entire country, will focus initially on the governorates of Amran, Sana’a, Al-Hudaydah, Taiz, Dhamar, Ibb, Lahj and Abyan. Some 14,000 smallholder and landless households will benefit from the project.

IFAD will extend a grant of $12.9 million to the programme under an agreement signed by Kanayo F. Nwanze, President of IFAD, and Abdul Karim Al-Arhabi, Deputy Prime Minister and Minister for Planning and International Cooperation of the Republic of Yemen. Nwanze addressed the 35th Annual Meeting of the Islamic Development Bank (IsDB) in Baku, Azerbaijan today.

With external cofinancing in the amount of $10.5 million from IsDB and $9.7 million from the European Union, the programme is expected to unleash the potential of local value chains to drive economic growth opening up opportunities for export expansion, imports substitution and creation of jobs in the rural areas.

“The programme will be governed by a public-private partnership, the Economic Opportunities Fund, and implemented by contracted service providers,” said Omer Zafar, IFAD’s Country Programme Manager for Yemen. “ It will apply a participatory approach that will enable producers’ associations to become viable entities capable of managing water resources and supporting production on the one hand, and allow them to enter into contracts with processors and exporters, on the other,” he added.

The programme is expected to stimulate the growth and technological improvement of selected value chains and rural businesses, and promote contractual linkages between producers’ associations and markets. In addition, it will promote compliance with national and international food quality and safety standards while developing infrastructure supportive of the selected value chains. It will also expand the rural outreach of financial institutions and enhance access to sustainable rural financial services.

With this new programme, IFAD will have financed 20 projects in Yemen for a total investment of US$206.3 million.

Press release No.: IFAD/42/2010