The Asian Infrastructure Investment Bank (AIIB) and the European Bank for Reconstruction and Development (EBRD) are streamlining their cooperation to promote economic development and investment across countries where both institutions are active.
A new co-financing framework agreement, which will enable the two banks to harmonize their operational policies and procedures, was recently signed by EBRD president Odile Renaud-Basso and AIIB president Jin Liqun.
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, digitalization and economic 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.
The CFA builds on a memorandum of understanding signed by AIIB and EBRD in 2016 to promote dialogue and the exchange of information in markets where both organizations 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 Covid-19 pandemic response.
“Today’s agreement deepens our relationship with the EBRD and allows us to more rapidly scale up our support for members and clients,” says AIIB's Jin. ”The 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.”
EBRD's Renaud-Basso adds: “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."
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.