African Development Fund

African Development Fund At A Glance

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The African Development Fund is a concessional loan fund of the African Development Bank Group; it provides laregly interest-free "soft loans" with extended repayment periods of up to 50 years.

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The African Development Fund (ADF) is the concessional loan fund of the African Development Bank Group, which also includes the African Development Bank (AfDB) and the Nigeria Trust Fund (NTF). Agreed upon on November 29, 1972, the ADF provides concessional funding for projects and programs, as well as technical assistance for studies and capacity-building activities, to address poverty reduction and economic and social development in the least developed African countries. ADF loans (“soft loans”) are largely interest-free and repayable over long periods of time (up to 50 years), with a 10-year grace period. The creation of the ADF several years after the AfDB’s establishment aimed to address the limited amount of resources that the AfDB could provide and the nature/terms of loans, which were not always appropriate for long-term projects the poorest of its member countries. The fund is overseen by a Board of Governors and Board of Directors, and it draws its resources from internal AfDB resources and periodic replenishments by donor countries. It has cumulatively invested more than $45 billion over its 40 years of work on the African continent. Resources are allocated through a Performance-Based Allocation (PBA) system using a methodology that “strikes a balance between the policy and institutional performance of its eligible RMCs and their development needs.”

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