79–010 ★ (Star Print) 

Calendar No. 113 

111TH CONGRESS REPORT " ! SENATE 1st Session 111–51 

AFRICAN DEVELOPMENT FUND 

REPLENISHMENT ACT OF 2009 

JULY 16, 2009.—Ordered to be printed 

Mr. KERRY, from the Committee on Foreign Relations, 

submitted the following 

R E P O R T 

[To accompany S. 955] 

The Committee on Foreign Relations, having had under consideration the bill (S. 955), to authorize United States participation in, 

and appropriations for the United States contribution to, the African Development Fund and the Multilateral Debt Relief Initiative, 

to require budgetary disclosures by multilateral development 

banks, to encourage multilateral development banks to endorse the 

principles of the Extractive Industries Transparency Initiative, and 

for other purposes, reports favorably thereon, and recommends that 

the bill do pass. 

CONTENTS 

Page 

I. Purpose ........................................................................................................... 1 

II. Committee Action .......................................................................................... 1 

III. Discussion ....................................................................................................... 1 

IV. Cost Estimate ................................................................................................. 3 

V. Evaluation of Regulatory Impact .................................................................. 6 

VI. Changes in Existing Law .............................................................................. 6 

I. PURPOSE

The purpose of S. 955 is to authorize United States participation 

in, and appropriations for the United States contribution to the 

eleventh replenishment of the resources of the African Development Fund. 

II. COMMITTEE ACTION

S. 955 was introduced by Senators Kerry and Lugar on May 1, 

2009. It is cosponsored by Senator Kaufman. On May 5, 2009, the 

committee ordered S. 955 reported favorably by voice vote. 

III. DISCUSSION

S. 955, the ‘‘African Development Fund Replenishment Act of 

2009’’ authorizes U.S. participation in the eleventh replenishment 


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of the resources of the African Development Fund. The authorized 

3-year appropriation, 2008–2010, of $486.2 million represents 8.9 

percent of the total $8.9 billion replenishment. 

The African Development Fund (AfDF or ‘‘Fund’’) is a 

concessional lending and grant making facility for low-income African member countries of the African Development Bank. The African Development Bank includes shareholders from 53 African 

countries and 24 non-African countries. The AfDF was created in 

1972 and began operations in 1974, there are currently 38 AfDF 

borrower countries. 

The AfDF is primarily financed by the non-African countries with 

the U.S. ranked fourth in funding behind the UK, Germany and 

France. Donors negotiate a replenishment agreement every 3 years. 

In December 2007, negotiations concluded for the eleventh replenishment of AfDF resources (AfDF-VI) that will provide financing of 

$8.9 billion during 2008 to 2011. It provides grant financing and 

loans on highly concessional terms to Africa’s poorest countries. 

The AfDF financing supports investments in infrastructure, health, 

education, agriculture, water supply and sanitation. In addition, it 

provides technical assistance to facilitate basic economic policy and 

institutional reforms in support of sustainable economic growth 

and development. 

In the previous AfDF replenishment, the Congress appropriated 

$407 million out of a total replenishment of $5.4 billion. In the latest negotiations, the U.S. emphasized the following priorities: Managing for results, fragile states, regional operations, and private 

sector-led growth. 

Managing for Results. The U.S. pushed for a results-based framework, with concrete indicators and objectives, to guide Fund operations through 2010. The framework encourages the Fund to focus 

on measurable results rather than merely funding priorities. The 

committee agrees that the Fund should base its funding on tangible results and supports this emphasis. The committee continues 

to monitor progress at the African Development Bank on anti-corruption efforts in its projects and programs and believes that ensuring that development funds are not stolen or misused will result 

in better project and program outcomes. 

Fragile States. The Fund has established a special facility to provide targeted assistance to countries in transition from conflict and 

economic failure to stability and growth. Such assistance will support the elimination of arrears, provide resources to secure a peaceful and stable environment, and supplement capacity-building efforts. Countries that will benefit include post-conflict states such as 

Liberia. This committee believes this is an important sector where 

the Fund can exercise a comparative advantage. As an eminent 

persons group on the African Development Bank (chaired by former 

Mozambican President Juaquim Chissano and former Canadian 

Prime Minister Paul Martin) advised in its final report in fall 2007, 

the ‘‘AfDB has excess capacity and the AfDF has excess demand.’’ 

It is critical that fragile states who compose the majority of AfDF 

borrowing countries have access to sufficient capital in order to facilitate their reconstruction and development. The committee recognizes the increased challenges for fragile states, especially in 

achieving sufficient capacity to govern and maintain accountability 


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within government institutions. Fund resources in such situations 

must be managed with extraordinary oversight and the tools to 

build similar capacity locally should be a part of any programs implemented. 

Regional Operations. The Fund will provide further resources to 

projects that enhance regional integration and cross-border infrastructure. In addition, the Fund will develop a results measurement and development impact framework specifically for regional 

projects. The committee believes that development in Africa cannot 

be achieved on a country-by-country basis. It is vital that regions 

develop integrated strategies that will leverage comparative economic regional advantages. 

Private Sector-led Growth. The Fund will increase support in this 

area by promoting macroeconomic, regulatory, and financial sector 

reform, as well as by helping countries develop stronger anti-corruption frameworks and improved transparency. This includes 

helping countries implement the Extractive Industries Transparency Initiative. Finally, the Fund will also emphasize support to 

the agriculture sector, to alleviate the impact of the global food crisis. This represents an area of priority for the committee. The committee also encourages the Fund to help developing countries link 

programs and projects with private sector partners in order to reduce poverty, promote growth, and foster job creation. At the same 

time, it is important that recipient countries manage private sector 

growth in a transparent and consistent manner, conforming to 

global norms and standards, especially with regard to extractive industries, international environmental standards, and internationally recognized workers rights. 

S. 955 also includes two additional congressional priorities. One, 

the bill directs the Secretary of the Treasury to ensure that each 

multilateral development bank discloses to member countries the 

operating budget of the bank, including expenses for staff, consultants, travel, and facilities. This level of transparency is important 

for shareholders, including the United States, to understand how 

the multilateral development banks are utilizing their operational 

funds so that they can advocate for efficient use of those funds. 

Second, the bill requires the Secretary of the Treasury to direct 

the United States Executive Director of each multilateral development bank to use the voice and vote of the United States to ensure 

that the bank endorses the principles of the Extractive Industry 

Transparency Initiative (EITI) and integrates such principles into 

any project funded by the bank that is related to an extractive industry. The World Bank has already endorsed EITI and now integrates the EITI principles in its extractive industry projects. The 

other multilateral development banks are at varying stages of endorsement and implementation. 

V. COST ESTIMATE

In accordance with Rule XXVI, paragraph 11(a) of the Standing 

Rules of the Senate, the committee provides this estimate of 

the costs of this legislation prepared by the Congressional Budget 

Office. 


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UNITED STATES CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, June 11, 2009. 

Hon. JOHN F. KERRY., 

Chairman, Committee on Foreign Relations, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 955, the African Development Fund Replenishment Act of 2009. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is John Chin. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

June 11, 2009. 

S. 955 

African Development Fund Replenishment Act of 2009 

AS ORDERED REPORTED BY THE SENATE COMMITTEE ON

FOREIGN RELATIONS ON MAY 5, 2009

SUMMARY

S. 955 would authorize the appropriation of $468 million for the 

United States’ share of the eleventh general replenishment of the 

resources of the African Development Fund (AfDF–11). That replenishment covers the three-year period ending in December 2010. 

The bill also would authorize the appropriation of up to $26 million to meet potential shortfalls in the U.S. commitment to compensate the African Development Fund (AfDF) for debts cancelled 

under the Multilateral Debt Relief Initiative (MDRI) over the 

2006–2054 period. CBO expects that provision would have no significant budgetary impact. 

CBO estimates that implementing S. 955 would cost $318 million 

over the 2010–2014 period, assuming appropriation of that amount. 

(The Congress has already appropriated $150 million for fund replenishment in 2009.) Enacting the bill would not affect direct 

spending or revenues. 

S. 955 contains no intergovernmental or private-sector mandates 

as defined in the Unfunded Mandates Reform Act (UMRA) and 

would not affect the budgets of state, local, or tribal governments. 

ESTIMATED COST TO THE FEDERAL GOVERNMENT

The estimated budgetary impact of S. 955 is shown in the following table. The costs of this legislation fall within budget function 150 (international affairs). 


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Changes in Spending Due to S. 955* 

By Fiscal Year, in Millions of Dollars 

2010 2011 2012 2013 2014 2010– 

2014 

Estimated Authorization Level .... 159 159 0 0 0 318 

Estimated Outlays ......................... 95 159 64 0 0 318 

* The Congress appropriated $150 million for a contribution to the African Development 

Fund (AfDF) for fiscal year 2009, enacted in the Omnibus Appropriations Act, 2009 (Public 

Law 111–8) on March 11, 2009. CBO assumes there would be no additional funding for the 

AfDF for this year. 

BASIS OF ESTIMATE

For this estimate, CBO assumes that S. 955 will be enacted before the end of fiscal year 2009, that the estimated amounts necessary to fully fund the U.S. share of the current replenishment 

will be appropriated each fiscal year, and that outlays will follow 

the historical spending patterns for U.S. contributions to the fund. 

AfDF–11 

S. 955 would authorize the appropriation of $468 million for contributions to AfDF–11. The 11th replenishment was agreed to in 

December 2007, committing the United States and other donors to 

contribute a total of $8.9 billion to the fund. 

Based on information from the Department of the Treasury, CBO 

expects that the U.S. commitment to AfDF–11 would be funded 

with appropriations over fiscal years 2009 through 2011. The Omnibus Appropriations Act, 2009 (Public Law 111–8) provided $150 

million for the first installment. CBO further expects that the remaining authorized amounts of $318 million would be provided in 

two installments of $159 million in 2010 and 2011. 

MDRI 

S. 955 also would authorize the appropriation of up to $26 million to meet potential shortfalls in the U.S. commitment to compensate the AfDF for debts cancelled under the MDRI, which was 

agreed to in September 2006 and covers the 2006–2054 period. 

The Treasury Department has indicated that it expects to fully 

fund the United States’ MDRI commitment of $26 million for 

AfDF–11 by accelerating the encashment (payment) schedule for 

U.S. replenishment payments to AfDF–11. Under the department’s 

plan, those payments would be completed in four years—by 2012— 

rather than the 10 years that would otherwise be allotted. Based 

on a formula negotiated with the fund, those early payments would 

earn credits towards the U.S. MDRI commitment because of the 

additional interest that the fund would earn. Based on information 

provided by the Treasury Department on this early encashment income, CBO expects that additional appropriations to meet the U.S. 

MDRI commitment would not be required for either AfDF–11 

(2009–2011) or AfDF–12 (2012–2014). As a result, CBO estimates 

that authorizing such appropriations would not significantly affect 

discretionary spending over the 2010–2014 period. 


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INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

S. 955 contains no intergovernmental or private-sector mandates 

as defined in UMRA and would not affect the budgets of state, 

local, or tribal governments. 

Estimate prepared by: 

Federal Costs: John Chin 

Impact on State, Local, and Tribal Governments: Marin Randall 

Impact on the Private Sector: Burke Doherty 

Estimate approved by: 

Theresa Gullo, Deputy Assistant Director for Budget Analysis. 

V. EVALUATION OF REGULATORY IMPACT

Pursuant to Rule XXVI, paragraph 11(b) of the Standing Rules 

of the Senate, the committee has determined that there is no regulatory impact as a result of this legislation. 

VI. CHANGES IN EXISTING LAW

In compliance with Rule XXVI, paragraph 12 of the Standing 

Rules of the Senate, changes in existing law made by the bill, as 

reported, are shown as follows (existing law proposed to be omitted 

is enclosed in black brackets, new matter is printed in italic, existing law in which no change is proposed is shown in roman). 

African Development Fund 

Sec. 201. This title may be cited as the ‘‘African Development 

Fund Act’’. 

Sec. 202. The President is hereby authorized to accept participation for the United States in the African Development Fund (hereinafter referred to as the ‘‘Fund’’) provided for by the agreement establishing the Fund (hereinafter referred to as the ‘‘agreement’’) deposited in the archives of the United Nations. 

* * * * * * * 

SEC. 219. ELEVENTH REPLENISHMENT. 

(a) IN GENERAL.—The United States Governor of the Fund is authorized to contribute on behalf of the United States $468,165,000 

to the eleventh replenishment of the resources of the Fund, subject 

to obtaining the necessary appropriations. 

(b) AUTHORIZATION FOR APPROPRIATIONS.—In order to pay for the 

United States contribution provided for in subsection (a), there are 

authorized to be appropriated, without fiscal year limitiation, 

$468,165,000 for payment by the Secretary of the Treasury. 

SEC. 220. MULTILATERAL DEBT RELIEF INITIATIVE. 

(a) IN GENERAL.—The Secretary of the Treasury is authorized to 

contribute, on behalf of the United States, not more than 

$26,000,000 to the African Development Fund for the purpose of 

funding debt relief under the Multilateral Debt Relief Initiative, 

subject to obtaining the necessary appropriations and without prejudice to any funding arrangements in existence on the date of the enactment of this section. 


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(b) AUTHORIZATION OF APPROPRIATIONS.—In order to pay for the 

United States contribution provided for in subsection (a), there are 

authorized to be appropriated, without fiscal year limitation, not 

more than $26,000,000 for payment by the Secretary of the Treasury. 

(c) MULTILATERAL DEBT RELIEF INITIATIVE DEFINED.—In this section, the term ‘‘Multilateral Debt Relief Initiative’’ means the proposal set out in the G8 Finance Ministers’ Joint Communique ́ entitled ‘‘Conclusions on Development’’, London, June 11, 2005, and reaffirmed by G8 Heads of State at the Gleneagles Summit on July 

8, 2005. 

Æ 


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