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(Bloomberg) — The African Development Bank’s concessional financing arm mobilized a record $11 billion in its 17th replenishment, an amount the multilateral lender said signals confidence in the continent’s development prospects.
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The funding includes as much as $2 billion from the OPEC Fund for International Development and up to $800 million from the Arab Bank for Economic Development in Africa, the lender said in a statement on Tuesday. Pledges to the African Development Fund, or ADF, were received from 19 African nations for the first time, it said.
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“In one of the most difficult global environments for development finance, our partners chose ambition over retrenchment, and investment over inertia,” AfDB President Sidi Ould Tah said in the statement.
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In May, US President Donald Trump announced plans to eliminate $555 million in contributions to the ADF. The fund, through which the AfDB provides grants and concessional loans, is a key source of assistance for the continent’s least-developed countries. The US was previously the third-biggest contributor to the fund after the UK and Germany.
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While the US participated in a two-day pledging meeting that took place in the London this week, it was “not in a position to pledge,” the AfDB said in response to questions. The top three donors were Germany, the UK and Japan, it said, without providing further details.
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The latest replenishment marked a “structural shift in how concessional resources will be used,” the bank said. A new financial model has been endorsed that will allow the ADF to:
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- Leverage its balance sheet, including through a market borrowing option to be operationalized during this cycle;
- Deploy innovative instruments, including hybrid capital;
- Use concessional finance strategically to absorb risk, crowd in private capital, and catalyze investment at scale.
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The funding mobilized under the latest replenishment will support projects including expanding access to energy, strengthening food systems and building resilient infrastructure in 37 low-income and fragile African countries, the bank said.
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Established in 1972, the ADF has provided more than $45 billion in grants, concessional loans, and guarantees to Africa’s lowest-income countries.
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(Updates with comment by African Development Bank in fifth paragraph.)
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