2. The regional development banks (RDBs) are international
institutions which were founded in the 1960s. The aim of the RDBs
is to help countries promote economic growth and reduce poverty
by providing low interest loans, grants and expert advice for
development projects.
The regional development banks (RDBs) are international
development finance institutions whose mission is to help
developing member countries reduce poverty and improve the
quality of life of their populations.
They were founded in the 1960s with the aim of promoting
development and growth in their respective regions. The UK is a
shareholder of all four banks and contributed some £98 million to
them in 2007.
3.
4. The RDBs play a vital role in poverty reduction. They focus on the
Millennium Development Goals and provide support in a wide range of
areas including healthcare, education, infrastructure, agriculture and
energy. The RDBs are owned by member countries which include
'donor' countries and 'borrowing' countries. A key feature of the RDBs
is that they are majority owned and staffed by regional countries. This
means that countries in the region have the strongest influence over
how the bank’s money would best be spent for the overall benefit of
people in the region. The RDBs played a crucial role during the
economic downturn. By providing financial support and increasing
lending, they helped to maintain economic stability in the world’s
poorest countries. This prevented more people from falling into
poverty, and enabled these countries to continue their efforts to
achieve the Millennium Development Goals.
5.
6. DFID primarily works with the “concessional lending arms” of the RDBs, generally
referred to as Funds. These are the parts of the banks which provide grants
and loans to the regions’ poorest countries. (Concessional loans are loans
that are provided at low interest rates and which countries have a long time
to repay.) DFID’s aim is to ensure that grants and loans from the banks’
concessional lending arms genuinely reach the poorest and assist the
primary millennium development goal of eradicating poverty.
The concessional lending arms of each bank are:
The African Development Fund (ADF)
The Asian Development Fund (ADF)
The Special Development Fund (SDF) of the Caribbean Development Bank, and
The Fund for Special Operations (FSO), the concessional lending arm of the
IADB.
7. DFID’s financial support to the RDBs takes place within fixed periods
called “replenishments”. In the lead-up to these three or four year
agreements DFID helps negotiate the poverty reduction targets which
the banks set for themselves.
The most recent replenishment of the African Development Fund took
place in 2007. The UK contributed £417 million over the 3 years 2008-
2010. ADF 11 Replenishment
The most recent replenishment of the Asian Development Fund took
place in 2008. The UK contributed £109 million over the 4 years 2009-
2012. ADF 10 Replenishment
The Fund for Special Operations of the Inter-America Development Bank
is not replenished in the same way as the Africa and Asia banks.
The SDF’s replenishment will be finalised in December 2008.
8. Each donor to each bank has the right to nominate a governor to the
bank’s board. The Secretary of State for International
Development is the UK Governor for each of the banks. He
contributes to oversight of the banks’ activities and is responsible
for ensuring the banks fulfil their remits in line with their stated
aims.
DFID has published strategy papers for working with the two
largest development banks, the Asian and African ones:
Joint institutional strategy - Asian Development Bank (237kb)
Joint institutional strategy - African Development Bank (268kb).
