ADF Approves US$ 186 Million Funding for Six Projects in Regional member Countries

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Tunis, 27 October 2006 – The Board of Directors of the African Development Fund (ADF), the concessional window of the African Development Bank (ADB) Group, approved on Friday in Tunis, loans and grants amounting to 125.95 million Units of Account (UA*), equivalent to US$ 186 million for the financing of projects across the continent.

Mozambique will receive US$133 million, made up of a loan of US$ 88 million for the financing of its second poverty reduction support programme (PARPA II) and another loan of US$44 million for road construction and rehabilitation.

The poverty reduction loan is expected to reduce the incidence of poverty in the country from 54% to 45% between 2005 and 2009. 

The first loan will be used to fund the Government’s reform agenda in sound macroeconomic management, strengthen public financial management and improve the quality of public services delivery. It will also involve legal and justice reform including private sector development.

The second loan will be used for the rehabilitation and maintenance of the Montepuez–Lichinga road corridor which traverses the relatively underdeveloped and isolated northern provinces of Niassa and Cabo Delgado which are part of the hinterlands of the Port of Pemba. Other donors are also involved in the two projects.

Two multinational projects were also approved: a power project of the Nile Basin Initiative (NBI) will receive a grant of US$ 3.79 million while the Road construction and rehabilitation project in Burkina Faso and Niger will get a loan and a grant amounting to US$ 41.07 million.

A grant of US$ 3.6 million was also approved in support of Burkina Faso’s efforts to strengthen budget management with a view to helping reduce poverty by improving transparency, reliability and efficiency of budget management.

The Bank Group also made a robust statement on its re-engagement with Liberia with the approval of an ADF grant of US$ 4.4 million dollars in support of the country’s effort to improve governance, economic management and poverty reduction.

This followed the Board’s approval of the 2006 Liberia Dialogue Paper. The Bank Group has been absent from Liberia since the country fell into arrears in 1985 as a result of civil conflict. The Bank in 2004 engaged in dialogue with the National Transitional Government of Liberia. In January 2005, the Boards approved a Country Dialogue Paper (CDP) which spells out modalities for future assistance to the country to include helping it address the debt and arrears issue as well as strengthening the country’s destroyed institutional capacity.

In line with the strategic focus of the CDP, the Bank engaged in close dialogue with Liberia on the use of the Bank Group Post-Conflict Country Facility (PCCF) for arrears clearance, and embarked on the preparation of an Institutional Support Project for Governance and Economic Management, which represents a main instrument for dialogue with countries falling into arrears with the Bank Group.

* 1 UA = USD 1.47637 as at 27/10/2006

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