Additional funding for the African Development Fund for regional development operations
Press release 284/2007
14 December 2007
The representatives of 23 donor and loan recipient countries who met in London agreed on 10-11 December on the 11th Replenishment of the African Development Fund, with the total sum amounting to approximately EUR 6.5 billion. Finland will increase its share of the funding, making a share contribution of EUR 100 million, which corresponds to 2.4 per cent of the total contribution of donor countries.
During the three-year replenishment period, the overall resources of the fund will increase 52 per cent. The increase in financing is a manifestation of donor support for Africa as well as of their confidence that the African Development Fund will continue its reform in order to be able to better fulfil its task of acting as Africa’s own financing institution and, through this role, enhancing the development of the continent for achievement of the Millennium Development Goals by the target year 2015. In keeping with their former pledges, the EU member states increased their support for the Development Fund in a meeting following the EU-Africa Summit. The EU countries now account for 67 per cent of the contributions.
The key priorities during the forthcoming financing period include development of African infrastructure, promotion of good governance, and enhancement of regional integration, which is deemed as an important prerequisite for economic growth in Africa. The country-specific resources are distributed in accordance with the performance level. The performance level is measured by means of both country-specific indicators and indicators monitoring the operations of the Development Fund.
Since the very beginning of the negotiations, increasing the support for fragile states was considered one of the key measures. They will be allocated a fixed 7.5 per cent share of the overall financing. Correspondingly, a share of 17.5 per cent of the funding will be allocated for regional co-operation, which is of vital importance for Africa.
During the negotiations, climate change and its impact on Africa have emerged quite strongly. By the side of equality, the environment, and the development of the private sector, adaptation to climate change and measures for preventing it are so-called overarching themes, i.e. challenges that can be best responded to by incorporating these issues into operation policies and project preparation. In addition, the intention is to prepare separate projects, which should be aimed for clean energy projects or use of forests and other natural resources in an environmentally sustainable manner.
By supporting the goals of the African Development Fund and its replenishment, Finland fulfils its development policy programme principle of environmentally, economically and socially sustainable development for reducing poverty.
Part of the African Development Bank Group, the African Development Fund is a financing institution providing loans on concessional terms to the poorest countries of the continent. It started its operation in 1974. The Development Bank Group is headquartered in Abidjan, Côte d'Ivoire, but due to the unstable situation in the country, the HQ has been temporarily relocated to Tunis.
Additional information: Director Pekka Hukka, Unit for Development Financing Institutions, Ministry for Foreign Affairs, tel. +358 9 1605 6323, and Counsellor Paula Koski, Development Cooperation Issues, tel. +358 9 1605 6316, and website of the African Development Bank Group http://www.afdb.org(Link to another website.) (Opens New Window)