The African Development Bank (AfDB) arm lending to low-income countries will start raising $5 billion from capital markets every three years from 2027, a senior bank official said on Tuesday, as donor countries such as the United States cut support.
The Africa Development Fund (ADF) facility has provided $45 billion in concessional credit to 37 low-income African countries since it was established in 1972.
It counts the United States as its biggest cumulative donor, but President Donald Trump’s administration wants to cut $555 million in funding.
“We have an ambition to go to the capital markets and raise funding, which would help us to diversify the way that we fund ourselves,” said Valerie Dabady, AfDB’s head of Resource Mobilisation and Partnerships, during a briefing.
“We believe that we can raise up to $5 billion in every three-year cycle. But to get there, we have to actually change our charter,” she said, adding that the process of doing so was already underway.
ADF will then seek a credit rating and start undertaking the work of raising funds, following in the footsteps of the broader AfDB, which has issued a range of instruments in international capital markets over the years, Dabady said.
The Abidjan-headquartered AfDB is the continent’s biggest development bank, and it approved a review of ADF’s funding mix in December 2022, she said, before the geopolitical shifts that have stoked concerns about attainment of replenishment targets.
“It was very prescient and very timely that we should have done this… what it has done, the current geopolitical context, is to give a bit more impetus to what it is we want to do with the market borrowing,” Dabady said.
The next round of replenishment for the ADF, which is held on a three-year cycle, is scheduled to take place from November, and AfDB has set a target of more than doubling the $8.9 billion that was raised in the last round.
“We had started off these discussions wanting to reach $25 billion, and I think that given the context, that’s not something that’s going to be possible, given the constrained environment and the like,” Dabady said.
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