Devex Invested: African Development Fund’s $11B reveals new donor dynamics

It’s been a busy year filled with a lot of upheaval in global development, but we’re ending it with some positive news. Despite aid cuts this year from big donors, last week the African Development Bank raised a record $11 billion for the replenishment of the African Development Fund, its concessional lending arm for 37 low-income countries on the continent.

This 17th replenishment is the largest raise in the fund’s history, up from $8.9 billion in the previous cycle.

The headline figure itself is flashy, but the mechanics tell a deeper story about the shifting tectonic plates of development finance:

• Financial innovation: In a major governance shift, the ADF will now be allowed to borrow on capital markets. By issuing bonds — a model similar to that of the World Bank’s International Development Association — the fund could unlock an additional $5 billion every three years.

• A shift to the East: With traditional donors such as the U.S. slashing contributions, new partners are filling the void. The Arab Bank for Economic Development in Africa, or BADEA, pledged $800 million, while the OPEC Fund for International Development committed $2 billion.

• African ownership: African countries pledged $182.7 million — a fivefold increase from the last cycle — with 19 nations contributing for the very first time.

“Our partners chose ambition over retrenchment, and investment over inertia,” said AfDB President Sidi Ould Tah.

While the $11 billion falls short of the bank’s original $25 billion ambition, it represents a victory against a backdrop of foreign aid cuts and a signal that the world’s multilateral development banks are still working together.

Meanwhile, the European Bank for Reconstruction and Development, or EBRD, confirmed last week that its major shareholders, including the United States, have committed to a €4 billion ($4.7 billion) capital increase, raising the bank’s total capital base to €34 billion. The U.S. commitment allows the bank to move forward with plans to double its annual investment in Ukraine to €3 billion during reconstruction. Beyond Ukraine, EBRD is utilizing this enhanced financial strength to scale its geographical reach, recently approving its first sub-Saharan African investment — a €30 million loan to modernize Benin’s national grid — alongside a new $100 million trade facility in Iraq.

Read: African Development Bank's concessional lending arm raises record $11B

Note to our readers: This is the last edition of Devex Invested for the year as the Devex team takes some time off to recharge so we can head into the new year ready to bring you all the coverage you rely on. We’ll be back in your inbox on Jan. 6.

Packed calendar

After a slow year with dramatically fewer new deals and drawn-out congressional debates on its mandate, the U.S. International Development Finance Corporation has had a busy December.

The DFC Modernization and Reauthorization Act of 2025 was officially signed into law as part of the must-pass National Defense Authorization Act, more than tripling DFC’s investment capacity, unlocking more equity potential, and allowing it to work in more places, with some restrictions through 2031. The agency’s CEO, Ben Black, was also officially sworn in at the White House, and DFC announced several investments.

At the ceremony, Black said, “DFC is America’s international deal team, and it’s a privilege to lead this agency on behalf of America’s greatest economic president. Our investments will advance U.S. foreign policy, develop allies, and secure historic returns for American taxpayers.”

DFC also signed letters of interest with the Democratic Republic of Congo and Rwanda to deepen partnerships that “advance economic growth, strengthen supply chain resilience, and bolster mutual security and prosperity.” One of those letters is a proposed equity investment in a critical minerals mining project, and another would support the rehabilitation operation and transfer of a rail line that would connect to the Lobito Atlantic Railway in Angola.

Speaking of Lobito, DFC held a signing ceremony last week for its $553 million loan to the Lobito Atlantic Railway, which will help fund the rehabilitation and operation of a port in Lobito and a rail line in Angola.

DFC is also home to the U.S.-Ukraine Reconstruction Investment Fund, which at a board meeting last week announced it was fully operational and would begin the due diligence process for its first investments next year.

ICYMI: Reauthorization of the US Development Finance Corporation gains traction

Related: AGOA, the Lobito corridor, and the future of US-Africa engagement (Pro)

+ Start your 15-day free Devex Pro trial today and gain immediate access to in-depth analyses, insider intelligence, crucial funding data, exclusive event access, and much more. Discover the advantage of having Devex Pro.

Saudi lessons

With global aid budgets tightening, this year has brought more attention to the role of national development banks and development finance institutions that can mobilize domestic resources.

Adva recently spoke with Stephen Groff, governor of Saudi Arabia’s National Development Fund and is also a veteran of the Asian Development Bank and the Organisation for Economic Cooperation and Development, to learn about his work to help consolidate and expand Saudi Arabia’s development funds and how other countries might learn from the experience.

He had three recommendations for countries considering investing in their own development banks or funds:

• Go beyond just setting up an institution and ensure that it has a long-term strategic vision aligned with clear national targets. If not, the institution might spend too much time “searching for their objective.”

• Bring in outside expertise. Groff is an example of that at the NDF. Outside experts can help bring in global best practices, build local capacity, and then step away.

• Public development institutions have sometimes had a “checkered history,” so they should invest in governance and modern financial systems to avoid that old reputation and convince international partners to coinvest.

Quick reflexes

Under President Ajay Banga, the World Bank has launched a new corporate scorecard and later an outcomes unit — a commitment to ensure that its roughly $90 billion in annual disbursements translate into meaningful impact. But in an opinion piece for Devex, Avnish Gungadurdoss and Thomas O’Brien warn these efforts risk becoming “isomorphic mimicry” without a radical shift in incentives.

Gungadurdoss, cofounder of Instiglio, and O’Brien, a former World Bank director, argue that while the bank has improved strategic clarity and data systems, its culture remains dangerously tethered to a “pressure for lending volume,” where success is measured by disbursement rather than quality. Unless the institution links metrics to how staff are evaluated, promoted, and rewarded, they write, the new scorecard will remain a passive reporting tool rather than a driver of genuine impact.

The path to durability lies in pulling two specific levers, according to the authors: reforming internal HR structures and revolutionizing the use of trust funds. They propose conditioning the bank’s nearly $18 billion in trust fund assets on externally verified outcomes, effectively forcing teams to compete for grant finance based on results rather than deal size.

By moving beyond the fallacy that accountability must wait until data systems are perfect, the authors contend the bank can emulate models such as the Global Partnership for Results-Based Approaches immediately. Shifting these financial and professional incentives, they conclude, is the only way to turn the “outcomes reflex” from a slogan into a permanent norm.

Opinion: For the ‘outcomes reflex’ to become a World Bank norm, incentives are key

What we’re reading

DFC, critical minerals, and peace in the DRC. [Center for Global Development]

The key players in “America First” foreign aid. [Devex Pro]

Weathering the storm: Millennium Challenge Corporation pivot underway. [Devex Pro]