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8 things to know about Overseas Development Assistance
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Official Development Assistance (ODA) refers to all funding provided by public authorities in higher-income countries to improve living conditions in low- and middle-income countries. However, its scope is not always well understood. Here is an overview of some of its key features and complexities.
This article was originally published in April, 2019 and updated most recently on 23 February, 2026.
1. Official Development Assistance (ODA) supports neglected sectors
Improving access to water, health care, and quality education, protecting biodiversity, and tackling climate change are essential goals both for people in low- and middle-income countries and for global stability. Yet such projects do not always attract private investors, who may view them as too risky or not sufficiently profitable. “International finance generally flows very little to low-income countries and to social sectors,” said Hubert de Milly, an ODA expert at Agence Française de Développement (AFD).
This is where Official Development Assistance (ODA) plays a critical role. By filling financing gaps in underserved sectors and regions, through grants, loans, and other forms of support, ODA helps drive change for the most vulnerable populations. It often also mobilizes additional stakeholders, including banks, investors, and foundations, thereby increasing the total resources directed toward development.
Another key function of ODA is to help align national economies with the United Nations Sustainable Development Goals, steering them toward more inclusive, environmentally sustainable, and equitable development pathways. This transition comes at a cost, as any public policy does, but it generates significant social, economic, and environmental benefits over the medium and long term.
2. ODA is not limited to grants
Funding provided by donor countries that are members of the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) to countries eligible for Official Development Assistance (ODA) reached $214 billion (€180 billion) in 2024, according to OECD reporting rules. Most of this financing was provided in the form of grants. However, grants are not the only way to support sustainable development in partner countries.
Several countries, including France, also provide concessional loans to their partners. These loans are offered at preferential interest rates to countries or project leaders that face difficulties accessing financial markets.
This is not always widely known: loans are by far the primary financial instrument used by Agence Française de Développement (AFD) Group to implement France’s development policy and contribute to achieving the United Nations Sustainable Development Goals.
In 2025, the volume of loans granted reached nearly €12 billion, representing about 90% of total activity, compared with 10% for grants. In 2023, the breakdown was 80% loans and 20% grants.
ODA also includes other eligible expenditures, such as the cost of hosting refugees from low- and middle-income countries within the donor country for up to one year, tuition waivers for certain students from those countries, selected peacekeeping operations, and some debt relief measures.
3. The French approach to development assistance
Official Development Assistance (ODA) from France reached nearly $15.4 billion in 2024, or about €13 billion, representing 0.48% of gross national income (GNI). This makes France the world’s sixth-largest donor.
France is among the few countries whose external assistance relies on both grants and concessional loans. Other major donors, including the United States, Russia, and Sweden, provide assistance primarily in the form of grants.
“For French aid, this range of financial instruments makes it possible to respond to a broader set of situations, from urgent social needs to long-term economic priorities, while integrating environmental and governance considerations as much as possible,” said Hubert de Milly.
France’s development policy, as defined by the CICID (Comité interministériel de la coopération internationale et du développement) in July 2023, is structured around 10 concrete priority objectives.
4. Nations are not the only players
In development cooperation terminology, a distinction is made between assistance provided directly from a donor country to a partner country, known as bilateral aid, and assistance channeled by governments through contributions to international organizations, known as multilateral aid.
Members of the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) allocate a significant share of their Official Development Assistance, around one-third on average, through multilateral institutions. These include the World Bank, United Nations agencies such as the United Nations Development Programme, UNICEF, Food and Agriculture Organization, and United Nations High Commissioner for Refugees, as well as so-called vertical funds such as the Global Environment Facility, the Global Fund to Fight AIDS, Tuberculosis and Malaria, and the Green Climate Fund.
Among the multilateral banks, regional development banks also play an important role. These include the African Development Bank, the Asian Development Bank and the Inter-American Development Bank.
5. In France, multiple actors are involved
As both an agency that awards grants on behalf of the French government and a bank that raises funds on private financial markets, Agence Française de Développement (AFD) is the main institution implementing France’s international development policy.
However, it is not the only one. Around 10 different sources contribute to financing Official Development Assistance, including several ministries and local authorities.
The French Ministry for Europe and Foreign Affairs, the Ministry of the Economy, Finance and Industrial and Digital Sovereignty, the Ministry of National Education and Youth, and AFD together accounted for 88.5% of French ODA in 2021. The Ministry of the Interior and Overseas, as well as the Ministry of the Armed Forces, the Ministry of Labor, Full Employment and Integration, and the Ministry of Agriculture and Food Sovereignty, also play an active role.
6. Public aid is only one part of development funding
With $214 billion distributed worldwide in 2024, ODA constitutes a large part of international public financing intended for developing countries, which amounts to an order of magnitude of $300 billion in gross disbursements (not counting Chinese external financing).
Alongside this funding of public origin, there is international funding of a private nature which arrives in developing countries: private investments, actions by foundations and NGOs, remittances from expatriates to families back home... These alone represented $626 billion worldwide in 2022, according to an estimate by the World Bank.
But the main financial resources that fuel countries' development, particularly middle-income countries, are domestic: gross fixed capital formation amounts to about $10 trillion per year, significantly more than the approximately $2 trillion in international inflows. Small compared to these astronomical figures, ODA mainly has a role of reorientation, on the one hand towards the poorest or most vulnerable countries, on the other hand towards an economic activity benefiting the climate, biodiversity and SDGs.
7. It also benefits people in France
In 2024, AFD Group invested €1 billion in France’s Overseas Territories. Its sustainable investments abroad also generate benefits within France.
These investments create value and support jobs in France. Three-quarters of projects financed by AFD Group involved at least one French stakeholder, but always under untied aid rules, with no preferential conditions, in order to promote local actors whenever possible. These activities generate significant economic spillovers for French companies, estimated at around €3 billion per year.
They also help build long-term partnerships with countries around the world to address shared global challenges that affect France as well, including climate change, migration crises, and biodiversity loss.
Preventing crises at their source, particularly in the most vulnerable regions, is essential to safeguarding long-term prosperity and security. For this reason, AFD Group invests in projects that can also inspire innovation in France, for example in climate adaptation, such as the forestry project in Eskişehir, Türkiye.
8. It contributes to increased growth in beneficiary countries
Although it is difficult to evaluate the impact of Official Development Assistance, three research workers at the University of Copenhagen calculated, in a study published in 2010, that international aid added an additional growth point in developing countries.
The impact of aid to people in these countries can also be measured using more concrete indicators, such as the rates of vaccination and schooling. Donor countries have implemented evaluation mechanisms to measure the role played by their financial support. At AFD, these evaluations are carried out in partnership with research entities in the countries where projects have been implemented. Most often, they consist in sending investigators into the field and using local and national statistics.
