African Development Bank (AfDB)

The African Development Bank is the Group's parent organization. The Agreement establishing the African Development Bank was adopted and opened for signature at the Khartoum, Sudan, conference on August 4, 1963.

This agreement entered into force on September 10, 1964. The Bank began effective operations on July 1, 1966. Its major role is to contribute to the economic and social progress of its regional member countries - individually and collectively.

As of January 1, 1998, the African Development Bank's authorized capital is subscribed to by 77 member countries made up of 53 independent African countries (regional members) and 24 non-African countries (non-regional members).

The institution’s resources come from ordinary and special resources. Ordinary resources comprise:

the subscribed shares of the authorized capital, a portion of which is subject to call in order to guarantee ADB borrowing obligations;
funds received in repayment of ADB loans;
funds raised through ADB borrowings on international capital markets;
income derived from ADB loans; and
other income received by the Bank, e.g. income from other investments.

Under Article 8 of the Agreement establishing the AfDB, the Bank is authorized to establish or be entrusted with administering and managing special funds which are consistent with its purposes and functions. In line with this provision, the African Development Fund (ADF) was established with non-African states in 1972 and the Nigeria Trust Fund (NTF) with the Nigeria Government in 1976. Other special and trust funds include:

the Arab Oil Fund;
the Special Emergency Assistance Fund for Drought and Famine in Africa;
the Special Relief Fund.

In 2009 total approvals from the nonconcessional ADB window amounted to UA 5.60 billion for 84 operations, compared to UA 1.81 billon in 2008 for 58 operations, representing an increase of 209.4 percent. This large increase was mainly due to an upsurge in both project-lending and policy-based loans. Project-lending, comprising public and publicly guaranteed loans, and private sector approvals (including private equity and private guarantees), increased by 155.8 percent, from UA 1.54 billion in 2008 to UA 3.94 billion in 2009. Policy-based lending also rose to UA 1.52 billion in 2009, from UA 136.4 million in 2008. This dramatic rise was mainly the result of the 2 budget support loans: to Botswana (UA 969.0 million) and Mauritius (UA 437.3 million).

The other financing instruments include grants, which rose to the level of UA 25.1 million in 2009, from UA 13.6 million in 2008 (84.6 percent increase); the allocation for HIPC debt relief, which declined marginally from UA 113.8 million in 2008 to UA 112.8 million in 2009; and public guarantees amounting to UA 6.2 million. The share of the various financing instruments in the ADB total approvals in the year were as follows:

project lending: 70.3 percent;
policy-based lending: 27.2 percent;
HIPC debt relief: 2.0 percent;
and grants: 0.4 percent.

In 2009 private sector operations totaled UA 1.16 billion compared to UA 901.2 million in 2008, an increase of 28.7 percent. The financial instruments consisted of project loans and LOCs amounting to UA 1.01 billion; private equity, UA 142.5 million; and private guarantees of UA 5.3 million. The private sector approvals in 2009 represent 20.5 percent of ADB approvals and 14.3 percent of Bank Group total approvals. While the project loans in general aimed to accelerate economic growth and reduce poverty, the LOCs sought to deepen domestic financial markets by supporting access to finance for small and medium-size enterprises (SMEs). In addition, private sector operations in many sizeable multinational projects and programs were intended to enhance economic cooperation and regional integration among RMCs. The three notable multinational operations approved during the year were:

the Global Trade Liquidity Program (GTLP) (UA 322.1 million),
the Main One Cable System-Phase I Project (UA 44.1 million),
and the Emerging Africa Infrastructure Fund (UA 33.2 million).

Disbursements on AfDB loans during the year totaled UA 2.35 billion, a 223 percent increase over the UA 727.5 million disbursed in 2008. Cumulative disbursements (including non-sovereign loans) amounted to UA 20.03 billion. As at end-December 2009, 785 loans amounting to UA 17.55 billion were fully disbursed, representing 87.6 percent of cumulative disbursements.