Grants or loans to countries or territories that are under- taken by the official sector, with promotion of eco- nomic development and welfare as the main objective, at concessional financial terms.
Context is: trade term. Economic or technical assistance extended to developing countries by the governments of developed countries and by international organizations, as contrasted with gifts, loans, and investments financed by the private sector. Official development assistance is construed by the OECD Development Committee as including only "concessional" transfers to developing countries, meaning that all or part of each ODA transaction is a grant or is loaned at rate of interest and/or on repayment terms more beneficial to the recipient than market rates and terms. See also Additionality; Agency for International Development; Bilateral Aid; Developing Countries; Development Assistance Committee; Economic Development; European Bank for Reconstruction and Development; Graduation; Interest; Least Developed Countries; Multilateral Aid; Organization for Economic Cooperation and Development; Private Sector; Soft Loan; Transfer Payments.
Flows to developing countries and multilateral institutions provided by official agencies, including state and local governments, each transaction of which 1) is administered with the promotion of the economic development and welfare of developing countries as its main objective and 2) is concessional in character, with a grant element of at least 25 percent.