Finland grants extra funding to ADF

Finland will participate in the replenishment cycle of the African Development Fund (ADF) and in the reinforcing of the Fund’s work in the coming years, especially with regard to climate change adaptation, said the Ministry for Foreign Affairs in a press release on Monday.

The ADF helps the poorest African countries in coping with the many coinciding crises and in recovering from them.

The African Development Bank and the ADF under its purview are Finland’s key partners in Africa. The pledging fund is a channel for Finland to exert influence over development financing and to target funding beyond its bilateral partner countries and to countries where help is most needed.

”By helping developing countries build their basic infrastructure and good governance, we are improving the business environment and creating better opportunities for responsible business conduct. Concrete work towards climate change adaptation is one of the Fund’s strengths,” said Minister for Development Cooperation and Foreign Trade Ville Skinnari.

After a year of negotiations in 2022, the donors agreed on a replenishment package for the ADF’s financing cycle from 2023 to 2025.

The replenishment package totals USD 8,9 billion and includes USD 5 billion in donations. In addition, the donors will loan the fund.

The repayment of soft loans granted earlier to target countries covers the remainder of the package. Finland’s share of the package will be EUR 77 million. In addition, Finland is preparing a loan to the ADF.

Some African countries, such as South Africa, Angola, Egypt, Algeria and Morocco, are contributing to the ADF, too.

The main objective of the African Development Fund is to reduce poverty by promoting the economic and social development of African countries.

In 2015–2020, the African Development Fund helped improve access to electricity for 15.5 million people. Improvements in agricultural practices benefitted 74 million people, and water and sanitation services were improved for 42 million people.