African Development Bank seeks $25 billion for low-cost lending amid waning US engagement

The African Development Bank (AfDB) opened a donor-pledging conference on Monday for its fund that lends money to low-income countries on favourable terms, seeking to offset a retreat in U.S. support that threatens its $25 billion target. Earlier this year, the Trump administration withheld a $197 million tranche pledged in the previous replenishment round for the African Development Fund (ADF), raising doubts about Washington's contribution ahead of the two-day meeting in London.

The African Development Bank (AfDB) opened a donor-pledging conference on Monday for its fund that lends money to low-income countries on favourable terms, seeking to offset a retreat in U.S. support that threatens its $25 billion target.

Earlier this year, the Trump administration withheld a $197 million tranche pledged in the previous replenishment round for the African Development Fund (ADF), raising doubts about Washington's contribution ahead of the two-day meeting in London. The AfDB, Africa's biggest development lender, said the U.S. would send a representative to the talks, but it remained unclear whether it would commit funds.

"Existing partner countries are unlikely to fully close the $560 million grant funding gap that would remain without a United States pledge," said Valerie Dabady, AfDB's head of resource mobilisation and partnerships. The White House did not respond to a request for comment.

In September, a U.S. Treasury spokesperson told Reuters it was "seeking to return the ADF to its core mission of promoting economic growth and poverty reduction in the poorest African countries," without providing details. The Trump administration has cut funding for several multilateral institutions. In May, it reduced support for the World Bank's International Development Association by $800 million to $3.2 billion.

VITAL SOURCE OF FUNDING Replenished every three years, the ADF has provided $45 billion to 37 low-income African countries since 1972, financing irrigation, roads and electricity projects.

Unlike the AfDB's main lending window, which carries higher interest rates and stricter conditions, the ADF offers grants and concessional loans with repayment periods exceeding 20 years. Its role has grown as heavy debt burdens, shrinking aid and tighter global capital markets limit governments' access to finance.

The U.S. accounted for nearly 7% of the last ADF replenishment of $8.9 billion at end-2022, ranking among the top five donors alongside Germany, France, Britain and Japan. Abidjan-headquartered AfDB aims to raise $25 billion in the current round, but Washington's shift on overseas aid has put that goal at risk.

DENMARK, NORWAY AND AFRICAN NATIONS STEP UP Some countries have pledged more. Denmark said in October it would raise its contribution by 40% to 1.1 billion Danish crowns ($171 million), while Norway promised a near-6% increase last month.

African member states will also start contributing. Kenyan President William Ruto committed $20 million last year, and other potential donors include Benin, Ghana and Sierra Leone, Dabady said. The fund is finalising plans to raise $5 billion of seed funding from capital markets each cycle, and to tap philanthropic organisations.

($1 = 6.4194 Danish crowns)

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