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Regional Development Banks

logos of the four Regional Development BanksThe 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.

In that year the four banks approved some £22.4 billion in loans, grant projects, technical assistance, investments, guarantees and other expenditure including debt relief.

A major feature of the RDBs is that they are majority owned and staffed by regional member countries. This means they provide a strong regional voice and perspective to their business. The banks are:

What is the purpose of the regional development banks?

All four regional development banks use the Millennium Development Goals (MDGs) as the benchmarks for their funding activities. This means their work focuses on the prime goal of eradicating poverty and hunger. Among other activities, they:

  • promote economic and social development through loans, equity investments and technical assistance
  • work with governments and public and private enterprises on projects that contribute to economic and social development, based on recipient country's needs and priorities
  • help to develop cross-border programmes of investment
  • improve access to energy
  • tackle the spread of diseases.

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Concessional lending arms

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:

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Replenishments

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.external link 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.external link 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.

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Accountability

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:


Last updated: 4 November 2008