Established in 1972, the African Development Fund (ADF) became operational in 1974. It is administrated by the African Development Bank and comprises State Participants (donor countries) and recipient countries. Its main objective is to reduce poverty in Regional Member Countries (RMCs) by providing loans and grants.

The ADF contributes to the promotion of economic and social development in 38 least developed African countries by providing concessional funding for projects and programs, as well as technical assistance for studies and capacity-building activities.

No interest is charged on ADF loans; however, the loans carry a service charge of 0.75 percent per annum on outstanding balances, and a commitment fee of 0.50 percent per annum on undisbursed commitments. Project loans have a 50-year repayment period, including a 10-year grace period. Lines of credit have a 20-year repayment period with a five-year grace period.