U.S. Withholds Funds from AfDB Amid Climate Change Focus

The U.S. Treasury withheld funds from the African Development Bank's fund for low-income countries, citing its focus on climate change. This decision comes as the AfDB, seeking $25 billion, faces a funding gap. The organization attempts to fill this gap through increased African membership contributions and market borrowing.

The U.S. Treasury has withheld financial contributions to the African Development Bank's fund for low-income countries, citing a disproportionate focus on climate change. This development has left a significant funding gap that the AfDB is scrambling to fill through alternative measures, including increasing contributions from African member states.

The AfDB had initially aimed to raise $25 billion, but the absence of a U.S. pledge has created an urgent need for additional financial support. During a December conference, African nations pledged contributions for the first time, and Western nations like Denmark and Norway also increased their support.

The bank plans to raise $1 billion through market borrowing to mitigate the shortfall. Meanwhile, the Trump administration's withdrawal from international climate initiatives has impacted funding for various development projects across Africa, exacerbating the situation further.

(With inputs from agencies.)