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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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20 news items

Mon, 27 Oct 2014 21:52:30 -0700

The second condition was that the loan came with the counterpart fund component-counterpart fund is the money that will come out from Cross River State government to show commitment that we will use the money judiciously for the purpose for which it ...
Nigerian Bulletin
Fri, 31 Oct 2014 08:00:00 -0700

``“The government is committed towards this project, which informed its decision to pay the required counterpart fund of N112 million for the take-off of the Tax Payers Identification Numbers. ``The workshop signals the formal commencement of the TIN ...


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, 22 Oct 2014 01:15:00 -0700

... the Bacolod-Silay Airport will be implemented under the Public-Private-Partnership scheme. A bidding of interested private companies will be held, and it would still be determined if the host local government units will have its counterpart fund ...
Thu, 23 Oct 2014 10:16:45 -0700

... be used to transport goods of the farmers from their farms to the market. The north and south district will get one vehicle each. One truck is priced at P1 million, 15 percent or P150,000 of which will be shouldered by the City Government as ...


Fri, 10 Oct 2014 16:40:34 -0700

Expected to be completed in 2016, the project was bankrolled by a $203-million loan from the South Korean government through its Export-Import Bank's Economic Development Cooperation Fund. The Philippine government provided a counterpart fund 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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