Finland will participate in the 17th replenishment of the African Development Fund (AfDF-17) to support sustainable economic growth and development in the continent’s poorest countries. The AfDF aims to reduce poverty by promoting economic and social development, financing climate-resilient infrastructure, strengthening administrative capacity, and supporting reforms that improve domestic revenue systems. Finland will contribute EUR 45 million to the AfDF for the 2026–2028 cycle, a decrease from the previous replenishment due to savings in its development cooperation budget. The donor agreement for AfDF-17, targeting USD 11 billion, was reached in London on 15 December, and the fund will begin borrowing from financial markets to increase lending volumes.
The AfDF combines donor loans, repayments of prior loans, and a climate finance window. It is particularly essential for countries not yet creditworthy for African Development Bank lending and those with significant debt sustainability needs. Activities financed by the fund consider climate impacts, promote gender equality, support youth employment, and aim to improve conditions for private sector growth to mobilise additional private capital. Approximately a quarter of the AfDF’s activities are directed toward regional economic integration and reducing trade barriers, enhancing economic collaboration across the continent.
Finland’s support aligns with the African Development Bank Group’s focus on private sector cooperation to boost sustainable growth and industrialisation. Minister for Foreign Trade and Development Ville Tavio emphasised that the AfDF should improve business environments in the poorest countries, reduce investment risks, and promote private sector-led sustainable economic growth. During 2023–2025, nearly half of the AfDF’s support went to strengthening the private sector, a share that is expected to increase in the new cycle. The fund has already contributed to significant development impacts, including providing electricity to over three million people (expected to reach 10 million by 2030), improving food security for more than 92 million people, and supporting infrastructure and water access projects benefiting millions.
In addition to its contribution to AfDF-17, Finland will provide EUR 13.34 million to support debt sustainability and relief for AfDF recipient countries from 2026–2028 through the Multilateral Deficit Relief Initiative (MDRI). Established in 2005, the MDRI aids poor, heavily indebted countries by canceling debts owed under the Heavily Indebted Poor Countries (HIPC) initiative once participating countries implement agreed reforms and make progress in poverty reduction. The initiative involves the AfDF, the International Development Association (IDA) of the World Bank, and the International Monetary Fund (IMF), further supporting Africa’s path toward sustainable economic growth and fiscal stability.
