The European Bank for Reconstruction and Development (EBRD) and the Asian Infrastructure Investment Bank (AIIB) are streamlining their cooperation to promote economic development and investment across countries where both institutions are active.
A new co-financing framework agreement (CFA) that will enable the two banks to harmonise their operational policies and procedures was signed by EBRD President Odile Renaud-Basso and AIIB President Jin Liqun today. It will help achieve the highest social, environmental and legal standards.
The agreement will speed up the preparation of joint co-financed investment projects and their implementation. It will allow member-countries and clients to focus on preparing their projects on the basis of one set of specific requirements. This will improve the efficiency of investment operations and thus achieve lower costs for clients and a greater development impact in terms of the green economy, digitalisation and inclusion.
Examples of streamlining include the future application of well-established EBRD instruments such as the Environmental and Social Policy and the Procurement Policies and Rules in co-financed projects.
EBRD President Renaud-Basso said: “This is an important milestone both for the EBRD and AIIB. By simplifying this crucial aspect of multilateral cooperation, we will be able to develop and implement new projects for the region speedily and efficiently. The new cooperation agreement will help us channel more funds towards the development of much-needed modern infrastructure with the highest standards, which will be especially important in the post Covid-19 pandemic environment.”
“Today’s agreement deepens our relationship with the EBRD and allows us to more rapidly scale up our support for members and clients,” said AIIB President Jin. “AIIB continues to place a high value on partnership because a coordinated, international approach to sustainable development is the most effective way to help our members navigate the current crisis and achieve their long-term development goals.”
Stronger multilateral cooperation and alignment is one of the key findings of the G20 Eminent Persons Report that encouraged international financial institutions to work together as a system and leverage their combined strengths. Today’s announcement is an example of how multilateral development banks are working together for their clients and members to achieve this objective.
The CFA builds on a Memorandum of Understanding signed by AIIB and the EBRD in 2016 to promote dialogue and the exchange of information in markets where both organisations invest. Since then, the two banks have provided over US$ 2.4 billion of funding to common projects in the energy and transport sectors, as well as in the Covid-19 pandemic response.
AIIB is a multilateral development bank whose mission is financing Infrastructure for Tomorrow – infrastructure that is green, technology-enabled and promotes regional connectivity. Based in Beijing, the Bank has grown to have 103 approved members worldwide.
The EBRD is a multilateral bank that promotes the development of the private sector and entrepreneurial initiative in 38 economies across three continents. The Bank is owned by 69 countries as well as the European Union and the European Investment Bank. EBRD investments are aimed at making the economies in its regions competitive, well-governed, green, inclusive, resilient and integrated. ■