·         Addressing fragility 

·         Delivering Impact  

·         Funding Innovation


·         ADF Project of the Week: Madagascar PCG

·         ADF Donor of the Week: United Kingdom

·         ADF Know It All: Catch Up on Past Newsletters

·         Save the Date: March 19-21, 2019


Although there is much more to be done, the African Development Fund is proud of its results. Between 2014 and 2018, ADF facilitated the installation of 206MW of new power capacity, of which 59MW was renewable energy. The ADF financed the construction and rehabilitation of 10,487km of feeder roads, linking farmers to markets. It also supported 546,000 small and micro businesses with access to finance.

While these select results show just a glimpse of ADF’s important role in the development story of the African continent, the real feat is realizing these results with limited resources. The ADF has been an incredibly shrewd steward of ADF donor funds, leveraging each replenishment to achieve maximum impact. The value for money the ADF provides shows that the African Development Fund not only works hard, but also works smart for the people of Africa.

A bedrock for innovation. The running thesis has been - how can we leverage the concessional funding of the ADF to crowd in other players with larger pockets?

One solution the ADF devised with the support of the ADF donors was the Private Sector Credit Enhancement Facility (PSF). Recognizing the importance of private sector investment for the development of Africa’s least developed countries, the ADF established a risk-sharing instrument in 2015 that is now much respected in the development community. The PSF has crowded in up to USD 2.6 billion in private sector financing to ADF countries since its inception across all the High 5s, especially in support of infrastructure development.

42 risk participation agreements & USD 717 million in risk exposure across all High 5s

ADF guarantees success. The Fund’s Guarantees Program has also unlocked valuable resources for the continent. In addition to concessional loans, the Fund offers both the ADF Partial Risk Guarantee (PRG) and the ADF Partial Credit Guarantee (PCG). These risk mitigation instruments are both examples of the smart use of scarce ADF resources. Specifically, ADF resources have provided a backstop to private sector investors looking to mitigate project risks in Africa’s low-income countries. For example, an ADF PCG allowed Madagascar to mobilize over EUR 51 million from international banks by leveraging some of its ADF allocated resources.

ADF offers the best value for money, maximizing results despite limited resources. The 15th replenishment of the African Development Fund will do even more to support private sector as the engine of growth for African economies and as the creator of stable jobs for African youth.


The African Development Fund provides Partial Credit Guarantees (PCGs) to well-performing and eligible ADF countries and their State Owned Enterprises (SOEs) to catalyze resources on more reasonable financing terms, to better address their development needs. This innovative financial instrument partially guarantees debt service obligations to private lenders including commercial banks and bondholders.

In 2016, Madagascar benefitted from a PCG. Given the very difficult economic and social context in Madagascar at the time, the Government asked the Fund for a guarantee to help mobilize EUR 51.3 million to support the country's financing needs. On a standalone basis, Madagascar could only access the financing at an interest rate of around 13% with a 5-year tenor. To convince international banks to extend the tenor and lower the interest rate by more than 60% for a non-rated country like Madagascar, ADF provided a PCG covering up to 70% of the proposed loan amount. The guarantee covered both interest and principal repayments of the country under the facility agreement.

With the Fund-backed guarantee of EUR 37.3 million, Madagascar was not only able to borrow EUR 51.3 million from international banks, but also benefit from an extension of the original loan maturity and a considerable reduction in actual borrowing costs. In fact, the loan interest rate was effectively slashed in half and the maturity extended by 2 years. That is the impact of ADF.


The United Kingdom (UK) joined the African Development Fund in 1973, and has been a regular contributor to the Fund since then. The UK is the largest contributor to ADF-14, having provided GBP 455 million. Its total support to the Fund now exceeds GBP 3 billion. The country is vested in improving cooperation with the Fund in areas of mutual interest such as support to fragile states, good governance, inclusive growth and private sector development, and seeks to further strengthen ADF’s ability to respond to Africa’s needs.

The UK also invests in a number of transformational trust funds including the Sustainable Energy Fund for Africa (SEFA), the Trust Fund for Countries in Transition (TFT) and the Somalia Infrastructure Trust Fund. With its support SEFA for example, the Fund and the Department for International Development (DfID) is collaborating with the Fund on accelerating mini-grid deployment for greater energy access across Africa. In addition, DFID has also been a strong co-financing partner of Fund investment projects across regional member countries.




·         For more information on the African Development Fund

·         For more information on the United Kingdom’s involvement in the ADF

·         For more on the Fund’s innovative guarantees

·         If you missed the previous week’s newsletter, you can catch up here



March 19-21, 2019
First ADF-15 Replenishment Meeting, Abidjan

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