Abu Dhabi fund suspends debt service repayments to help with pandemic fallout
DUBAI – Abu Dhabi Fund for Development (ADFD) has suspended debt service repayments for some developing countries and companies for the year to help alleviate the pandemic’s impact, the state-financed fund said.
“The sole objective behind the decision is to help them weather the economic fallout of the COVID-19 pandemic,” ADFD said in a statement on Sunday.
The fund provides financial assistance to companies in the United Arab Emirates and to developing countries, which has included Pakistan, Egypt, Sudan and Ethiopia.
Debt service repayments would be suspended for eligible countries and individual companies in the developing world from January 1 until December 31 of this year, the fund said in a statement.
Countries and companies would need to request to have repayments suspended, it said.
The fund did not say what the criteria would need to be met to be eligible for the scheme. but pointed out that “the initiative over the payment of instalments and interests that covers the period from January 1 to December 31, 2020 will be implemented by ADFD in accordance with the national law and internal procedures.”
The fund’s director general Mohammed Saif al-Suwaidi said: “At a time when the world is reeling under the effect of the pandemic … it is imperative for us to support particularly those that need it most, especially the low-income countries.”
“The initiative is so crucial to ensure their financial stability and that they steadily follow the path to growth and sustainable economic development,” he emphasised.
“Afterall, relieving the financial burden on the developing economies as well as that of our own country is our moral obligation,” Suwaidi added. “We are committed to taking any further action and providing support that may be required to ensure a swift recovery of the beneficiary countries and our national companies.”
The ADFD had earlier earmarked about $272 million in concessionary loans for national companies so that they can continue to operate and eventually overcome the economic impact of the COVID-19 pandemic.
In a similar move to help developing economies ride over the current crisis, the Fund recently announced that it would contribute to an AED36.7bn ($10 billion) support fund, committed by institutions within the Arab Coordination Group.
The package includes technical assistance, grants, concessional loans, financing, trade insurance and capacity development programmes.
The Fund’s main objective is to drive sustainable economic growth both at home and in developing nations across the world by supporting key sectors such as education, health, energy, transport, housing, agriculture and industry, says the ADFD.
To meet this objective, it provides concessionary loans to national companies, as well as to the governments of the developing countries, to help them implement their developmental agenda by financing strategic projects which have a great impact on the overall economy and communities.