Improving infrastructure finance for low-income countries: Recommendations for the ADF

Image: Flickr, Rwanda Government
Image: Flickr, Rwanda Government

Low-income countries (LICs) in sub-Saharan Africa face a substantial infrastructure-financing gap. Multilateral development banks (MDBs) have traditionally played an important role in mobilising finance for infrastructure in LICs, but their funding alone cannot match demand.

The African Development Bank’s (AfDB) concessional window, the African Development Fund (ADF), is a key infrastructure financier for African LICs, and comprises 37 regional member countries (RMCs), including emerging markets and fragile states. However, in recent years the ADF has faced funding and technical constraints. This policy brief, based on a discussion paper, outlines the ADF’s role in providing infrastructure financing to LICs and the challenges that countries face in accessing these funds. It also examines the changing context confronting LICs as they weigh their infrastructure demands against the requirement to maintain sustainable debt levels. Lastly, the brief explores the challenges and opportunities of mobilising additional finance for LICs.