African Development Fund (ADF)

Established in 1972, the African Development Fund (ADF) became operational in 1974. It is administrated by the African Development Bank and  comprises State Participants (donor countries) and recipient countries. Its main objective is to reduce poverty in Regional Member Countries (RMCs) by providing loans and grants.

The ADF contributes to the promotion of economic and social development in 38 least developed African countries by providing concessional funding for projects and programs, as well as technical assistance for studies and capacity-building activities.

The Agreement establishing the African Development Fund designates the Board of Governors as the Fund’s highest policy-making organ. The Board of Governors meets at least once a year. The ADF Board of Directors includes six Executive Directors from non-RMCs - the Executive Directors are nominated by their constituencies - and six Executive Directors representing the AfDB. The Board oversees the Fund’s general operations. The Fund’s resources are replenished every three years by 26 donor countries. In the replenishment discussions, the donor countries are represented by their ADF Deputies.

No interest is charged on ADF loans; however, the loans carry a service charge of 0.75 percent per annum on outstanding balances, and a commitment fee of 0.50 percent per annum on undisbursed commitments. Project loans have a 50-year repayment period, including a 10-year grace period. Lines of credit have a 20-year repayment period with a five-year grace period.

The ADF, the concessional window of the African Development Bank (AfDB) Group, successfully concluded in December 2007 its 11th Resource Replenishment (ADF-11) for the Fund’s activity in 2008-2010. For such period, ADF Deputies agreed on a record level of UA5.9 billion. The Fund’s core strategic priorities for ADF-11 are infrastructure, governance, fragile states and regional integration.

*1 UA=1 US$1.48