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author: Organisation for Economic Co-operation and Development

Why modernise official development assistance?

2015

Most ODA continues to be provided in the form of grants. Nonetheless, concessional loans – in other words, loans provided on favourable terms to developing countries – are also important, and will continue to play a key role in mobilising resources to support the Sustainable Development Goals (SDGs). The concept of ODA was developed by the OECD Development Assistance Committee (DAC) in 1969, yet until recently the definition of what made a loan “concessional in character” – which in turn determines the extent to which a loan can be reported as ODA – was open to interpretation. Because this resulted in inconsistent reporting across DAC members, it was agreed that clarification was needed.

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