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Abu Dhabi Fund for Development, ADFD, the leading national entity that supports sustainable economic development at home and abroad, has announced a significant initiative whereby it has decided to suspend debt service repayments during 2020 for eligible countries, as well as individual businesses, in the developing world upon request for forbearance.
"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 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 move is in line with the position of the UAE Government to support the G20 plan, launched by the World Bank, to help the developing countries to meet their financing needs, to alleviate their debt burdens and to effectively address the impact of the COVID-19 pandemic on the region and beyond.
Explaining ADFD’s stand, Mohammed Saif Al Suwaidi, Director General of the Fund, said, "At a time when the world is reeling under the effect of the pandemic that has affected every area – from economy and society to health and education – 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."
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. 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.
"Afterall, relieving the financial burden on the developing economies as well as that of our own country is our moral obligation," Al Suwaidi explained. "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."
As part of ADFD’s effort to limit the economic impact of the COVID-19 pandemic at home, it recently earmarked AED 1 billion in concessionary loans for national companies so that they can continue to operate and eventually overcome the crisis. This is a vital step to safeguard the UAE’s economic growth by supporting its backbone.
In a similar move to help the 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 programs.
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