Funding
ADFD funding

ADFD provides sovereign funding to governments of developing countries in the form of concessionary loans to support their development priorities and assist in achieving sustainable economic development.

If the applicant is a government entity not involved in the international borrowing affairs of the country (e.g., Ministry of Energy), a letter of intent from the government entity that deals with the international borrowing affairs (e.g., Ministry of Finance or International Cooperation) is required by ADFD. The letter of intent should indicate that the project is consistent with government development priorities and that the government supports the project. A template of the Letter of Intent can be viewed/downloaded here.

If the applicant is a private or semi-governmental agency, ADFD requires that applications be supported by a government guarantee letter issued by the ministry or the authority that deals with international cooperation and funding. ADFD can enter a loan agreement with a private or semi-governmental agency only if a loan guarantee agreement is signed between ADFD and the government (represented by the ministry that deals with the international borrowing affairs, e.g. Ministry of Finance, Ministry of International Cooperation).A template of the Guarantee Letter can be viewed/downloaded here.

ADFD funding details are as follows:
  • The total amount of concessional loans committed per annual project selection cycle shall not exceed USD 50 million unless there is a rollover from the previous cycle if there is a shortfall of projects selected for funding.
  • The concessional loan value for project(s) will range between USD 5 million and USD 15 million.
  • The loan amount for each project shall not exceed 50 percent of the estimated project cost.
  • NEW LOAN RATES: Please refer to the eligibility list to view your country’s category:
    Category Loan interest rate Loan period
    Least developed countries and other low-income countries 1% 20 years including a 5-year grace period
    Lower middle-income and Upper middle-income countries 2%
  • The project must demonstrate economic feasibility.
  • Loans are intended to cover as many recipients and regions as possible per application cycle. There are no limits to the number of project proposals presented by each country, but applicant governments are advised to prioritise their proposals.

ADFD loan agreement terms and conditions:

  • The final terms and conditions of the loan will be set by ADFD.
  • Ratification of the loan agreement is in accordance with borrowing country law.
  • Loans obtained from ADFD must be used for activities or assets directly related to the proposed project. Loans cannot be used to fund any pre-development activities, such as feasibility, environmental-impact or socio-economic studies.
  • Disbursement shall be made directly to the services provider depending on the finance percentage. ADFD does not finance more than 50% of the project.
  • Project implementation shall be in accordance with the tendering and procurement procedures of ADFD. Technology providers can only be awarded contracts after the project is selected and a loan agreement has been pursued with ADFD. ADFD oversees these procedures to ensure transparency of the tendering and delivery process.
  • The borrower shall take appropriate measures to acquire the ownership of land or rights over it and ensure it is free of any encumbrances according to the requirements of the execution of the Project. The borrower shall provide access to the site for the engineering consultant and the contractor, suppliers etc. for execution purposes.
  • A qualified and experienced Project Implementation Unit (PIU) would need to be identified/established by the beneficiary (e.g. Ministry/Authority) behind the project to be responsible for the overall administration of the execution of the Project and will be subject to the approval of ADFD. The PIU manager needs to be an experienced and qualified project manager acceptable to the Fund.
  • The loan agreement including all works and services shall be free from any taxes, fees and dues of any nature under any laws in force in the country.



For project applicants exploring co-funding and/or funding of feasibility studies, contact adfd@irena.org and/or:

Joao Cunha
Coordinator (Sustainable Energy Fund for Africa – SEFA)
African Development Bank
Email: j.cunha@afdb.org
Web: www.afdb.org

Chingiz Orujov
Senior Energy Economist
Islamic Development Bank
E-mail: corujov@isdb.org
Web: www.isdb.org

Marcel Alers
Head, Energy, Infrastructure, Transport and Technology
UNDP – Global Environment Facility
E-mail: marcel.alers@undp.org
Web: www.undp.org

For project applicants with projects less than USD 10 million in total project costs, contact adfd@irena.org and/or:

Impact Investment Exchange
Web: www.asiaiix.com

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© 2016 IRENA