BEIJING -- The Ministry of Finance announced Friday that it has signed an agreement with the International Fund for Agriculture Development, or IFAD, in which the latter will fund rural development projects in a Central China province.

IFAD's aid includes a $46 million loan and a $1 million grant. The financial support will back rural projects in Hunan province, said a statement on the ministry's website.

The loan carries a term of 18 years and an interest rate of 1.39 percent at present. The rate will be based on rates on hard loans set by the World Bank, the statement said.

The projects include infrastructure construction, agricultural production and marketing, as well as local management enhancement. The projects will be conducive to improving livelihoods and boosting sustainable development for the regional economy and environment, the statement said.

IFAD is a specialized agency of the United Nations. It works to assist the agriculture industry and eliminate poverty in developing countries by providing loans and favorable policies.