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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,[1] 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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489 news items

Wed, 07 Oct 2015 14:33:45 -0700

Recently, Kogi State said it had concluded plans to release N2.1b counterpart fund to enable it access its three-year backlog of grants. How far have they gone in actualizing this? Kogi State has accessed UBE matching grant up to the 2012. However, the ...
Mon, 28 Sep 2015 23:33:45 -0700

Idoko, who was represented by the Head of Private Sector, NACA, Dr Effiong Eno, said that the country presently has 3.2million people living with HIV out of which 42,000 are in the state. The DG urged the state government to pay its counterpart fund as ...

Daily Trust

Daily Trust
Mon, 05 Oct 2015 20:11:15 -0700

She had told the panel that the money was the 40 percent share of a counterpart fund to which the company was supposed to contribute 60 percent for the purchase of agricultural equipment from Mexico. She added that the money which was actually ...
Mon, 14 Sep 2015 16:15:00 -0700

Efforts by the State government to maintain this success, included the release of N80 million of the N160 million counterpart fund contribution for routine immunisation by Governor Mohammed Abubakar to ensure 99 per cent supply of polio vaccines in all ...
Daily Trust
Fri, 06 Mar 2015 04:00:00 -0800

Lagos — Construction of the planned new harbour at the Lekki Free Trade Zone (LFTZ) would have started but for the failure of the federal government to make available its $117 million counterpart funding, the Lagos State Governor Babatunde Fashola ...
Sun, 13 Sep 2015 23:22:30 -0700

The states are Sokoto, Katsina, Kano, Gombe, Taraba Anambra and Imo states. According to Adamu Misau, an official of UBEC's department of Statistics, the states were ranked based on three financial indicators, namely; state counterpart fund ...
Tue, 06 Oct 2015 07:03:45 -0700

... to be funded by the city government from available funds and in the amount of twelve million six hundred thirty seven thousand and nine hundred seventy-seven pesos (P12,637,977.00) and will be deemed as a counterpart fund of the city for the program.


Sun, 27 Sep 2015 07:53:10 -0700

The loan beneficiaries will provide a counterpart fund of not less than 10 percent of the total project cost, which may be in the form of capital outlay, labor, land for the project site, facilities, equipment, and salaries. The Land Bank of the ...

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