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[1] A counterpart fund is a technique for turning foreign aid into reserves of domestic currency. They were used by the UNRRA, and the Marshall Plan in the rebuilding of Western Europe after the Second World War, and today remain a common technique for delivering developmental assistance.

One method of setting up a counterpart fund is to have businesses in the country receiving aid that want to import a commodity place an order with their government and pays for the import in their local currency. The government then uses some of their foreign assistance, still in the foreign currency, to pay for the goods. This makes importing far easier as the unstable currencies in developing nations are often of little international value. Agreements are also usually signed so that these imports can only come from the nation that gave the aid, benefiting the donor's export industry. Another method is for goods to be donated to a developing nation's government and for them to then sell the goods to the population, and use the proceeds to set up a fund.

The recipient government is also then left with the original payment in its domestic currency. These payments are amalgamated into a fund that is used to further fund development. This can take the form of investments in infrastructure or industry, paying down the debt or deficit, or stabilizing the currency. The investment of these funds can take the form of loans rather than grants, creating a permanent pool of investment capital. For instance, Germany's Marshall Plan counterpart funds were used to set up such an investment fund, and it is still in operation today.


  1. ^ Greg Behrman, The Marshal Plan, Aurum Press Ltd., 2008, pp. 178,179,232.

Original courtesy of Wikipedia: http://en.wikipedia.org/wiki/Counterpart_fund — Please support Wikipedia.
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27 news items


Tue, 21 Oct 2014 03:52:30 -0700

The administration fully paid for all the counterpart fund for that project. But it is regrettable that those responsible did not implement the project well, or I stand to be informed about what had happened. No additional cup of water has been ...
The Guardian
Thu, 25 Sep 2014 00:07:30 -0700

"What he did was anywhere there was such money that counterpart fund was not paid, he paid and was able to access the money. Through that, the N20 billion translated into N50 billion. That was how Kano came on board." He emphasised that that is the ...


Wed, 24 Sep 2014 14:17:28 -0700

Governor Aliyu promised to pay the outstanding counterpart fund before the end of this year. Earlier the new sector commander of the FRSC in the state Mr Ogochukwu Ugboma had pleaded with the governor to assist the organization with vehicles to enable ...
Mon, 08 Sep 2014 20:11:15 -0700

... government had done a lot to mobilise states towards attaining the goals of Education For All (EFA), however many states have refused to access their funds at the Universal Basic Education (UBE) because of their unwillingness to part with ...


Fri, 10 Oct 2014 16:37:30 -0700

The Philippine government provided a counterpart fund of P2.2 billion. On Oct. 31, 2013, the Supreme Court issued a writ of kalikasan after a case was filed questioning the environmental impact of the project. It did not, however, order its suspension ...
Himalayan Times
Thu, 09 Oct 2014 14:10:44 -0700

KATHMANDU: The Asian Development Bank (ADB) has given a go ahead to the Civil Aviation Authority of Nepal (CAAN) to sign an agreement with Chinese contractor — Northwest Civil Aviation Airport Construction Group — to upgrade the Gautam Buddha ...
Business Mirror
Thu, 25 Sep 2014 19:02:00 -0700

World Bank lead rural-development specialist Carolina Figueroa-Geron noted that the Philippine government will set aside $120 million as counterpart fund, while a $7-million grant will come from the Global Environment Facility. The Department of ...
Visayan Daily Star
Tue, 30 Sep 2014 20:11:15 -0700

... financing of the projects. She said they are finalizing the list of the qualified clusters and refining reports for the Department of Budget. An assessment during the final stage will determine the capability of the cluster to put up the ...

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