Strategic Objectives:

Program Description

The operational model of the IOFS Fund encompasses entry points for capital (attracting investment), the management structure of mobilized funds, the deployment of funds, and contributions to the development of food security systems (income-oriented projects, as well as projects focused on social impact).

In general, the IOFS Fund’s operating algorithm is as follows:

- Capital is mobilized in the form of investments from institutional investors (member countries, international financial organizations, sovereign funds, etc.) and strategic investors (investment funds, banks, financial organizations, etc.), as well as perpetual contributions from donors.

- A portion of the mobilized funds will be used for financial activities (trading operations, forward derivatives, etc.) and investment activities (implementation of investment projects).

- Another portion of the mobilized funds will be utilized to acquire Islamic securities, such as SUKUK, where investments are "capital-protected" that is mean funds will be invested in highly liquid securities with minimal risk, and at the end of the commitment period, investors receive their initial capital investments.

- A part of the income generated from the commercial activities will be used to finance IOFS projects and programs that are non-commercial and oriented towards social impact.

Background

Food security is a complex and multifaceted issue that, in addition to concerns about physical and economic accessibility, involves challenges related to food self-sufficiency and the mitigation of food price fluctuations. In recent years, the global community has faced significant challenges impacting the world's overall food situation. International experts warn that these events pose risks of a critical increase in the number of people experiencing hunger and malnutrition. Addressing this situation requires the consolidation of OIC MS to ensure food security. Moreover, securing access to financial resources is imperative for the fundamental transformation needed to achieve sustainable growth and resilience in the face of global food challenges. The consolidation of resources and collective efforts becomes crucial in effectively addressing heightened food security concerns among OIC MS.

That is why, during the 2nd IOFS General Assembly held in Jeddah, Kingdom of Saudi Arabia, from 27 to 29 August 2019, Resolution No. IOFS/GA/1-13-2019 was approved. This resolution established the IOFS Fund as a crucial tool for expanding mutual intra-OIC trade in agricultural products produced in member states (MS), strengthening the stability of food security through food reserves, and providing humanitarian aid.

Program assignments

1. Reducing dependency on the world agricultural and food markets and vulnerability to the fluctuations of world prices by enhancing intra - OIC capacities.
2. Increase in the volume of agricultural production and unified food market in the OIC MS.
3. The ability to mitigate adverse impacts through compensation for damage.
4. Provision of international humanitarian aid to OIC countries in dire need of it.

Implementation:

1. Initiation and Establishment: developing founding documents, registering the fund in compliance with applicable legislation.
2. Securing Funding: seeking and securing funding from various sources, such as private investors, government entities, charitable foundations, or corporations.
3. Structuring Governance: determining the fund's governance structure, including forming a board, recruiting key personnel, and establishing internal processes.
4. Investment Activity: developing an investment strategy aligning with the fund's goals and objectives. Implementing investment projects aimed at achieving the established goals.
5. Monitoring and Reporting: Implementing a performance monitoring system to assess the fund's effectiveness, producing periodic reports for stakeholders.
6. Development and Expansion: working to increase the fund's assets and expand its impact, including attracting new investors and partners.

Outcomes:

1. Facilitation of mutual intra-OIC trade in agricultural products, fostering economic cooperation and contributing to the stability of food security within member states.
2. Building financial resilience through the mobilization of funds from various sources, including institutional investors, sovereign funds, and strategic investors.
3. Allocation of a portion of generated income from commercial activities to finance non-commercial projects with a focus on social impact, contributing to the welfare of OIC communities.
4. Provision of humanitarian aid through strategic initiatives aimed at addressing critical needs in the OIC region.

Highlights of implemented activities:

- The Feasibility Study for the IOFS Fund was developed by a consortium of international consultants in 2022. The MS on the 5th IOFS General Assembly (Tunis,10-11 October 2022) adopted the IOFS Fund feasibility study.

- An extensive campaign has been conducted in recent years targeting potential investors, international financial institutions like the IsDB, government agencies, financial institutions, and donors from Member States, specifically including Saudi Arabia, Oman, Qatar, and others.