Official Cofinancing | Asian Development Bank

Official Cofinancing

What is official cofinancing?

Flowing mainly from financing partnerships with multilateral and bilateral development assistance agencies, and public sector lending windows of export credit agencies, official cofinancing mobilizes grants and loans for projects supported by ADB and grants for ADB’s technical assistance operations. Such cofinancing is usually sourced from official development assistance. Official cofinancing focuses on strong partner and client coordination for easy access and efficiency in processing, low transaction costs, and harmonized and transparent mechanisms in reporting to financing partners on the development impact of their contributions.

Official cofinancing arrangements

ADB offers a high degree of flexibility to its partners in terms of channeling official cofinancing to development projects and programs. We administer official cofinancing in several forms:

Project-specific cofinancing

Grants or loans from partners may be earmarked for individual projects on a case-by-case basis. Project-specific cofinancing works especially well in the field, when donors are decentralized operationally and financially, from their headquarters.

Trust funds

Trust funds enable a partner to channel grants for a group of countries or specific focus areas, including disaster risk management, clean energy, private sector development, gender and development, good governance, information technology, poverty reduction, and regional trade. ADB fully administers the funds as Trustee or Sub-trustee. The main advantage is that a single agreement can cover a number of projects, reducing the need to negotiate on a case-by-case basis. Trust funds can involve one or more donors. See trust funds administered by ADB.

Framework cofinancing arrangements

Framework cofinancing arrangements allow partners to work with ADB more strategically. They are designed to support specific regional, country, or focus area programs under streamlined procedures. The predefined arrangements, coupled with an agreed financing envelope, provide a reliable and predictable basis for better, more targeted, and efficient services to developing member countries. ADB has standing cofinancing arrangements with these partners:

Multilateral Partners

  • Eurasian Development Bank
    Framework Agreement with the Eurasian Development Bank

    Total current commitment: $715 million
    Approved for projects: $310 million for 3 projects

    ADB and the Eurasian Development Bank (EDB) signed a framework cofinancing agreement in May 2013 during the 46th ADB Annual Meeting in Delhi, India. The agreement provides for EDB cofinancing of $715 million over 3 years (2013–2016). The agreement supports the agriculture, energy, public service, and transport sectors and covers four common member countries—Armenia, Kazakhstan, the Kyrgyz Republic, and Tajikistan. Although all projects under the framework agreement will be collaborative, EDB agreed that all projects to be cofinanced under the agreement will be subject to ADB policies on safeguards, anticorruption, and public communications, including ADB’s Integrity Principles and Guidelines. In September 2014, ADB and EDB agreed to amend their agreement to include other methods of cofinancing on a project-by-project basis. In 2015, EDB provided a $150 million additional cofinancing for a transport project in Central Asia.

  • International Fund for Agricultural Development
    Framework Agreement with the International Fund for Agricultural Development
     

    The International Fund for Agricultural Development and ADB signed two key agreements in 2013 and 2014: a memorandum of understanding (MOU) and a framework cofinancing agreement for 2014–2017. In the MOU signed in September 2013, the two institutions agreed to facilitate collaboration in matters of common interest and to establish necessary working arrangements to further their cooperation. The MOU supersedes the 1978 Cooperation Agreement.

    The framework cofinancing agreement supplements the MOU and further details the financing partnership arrangements to improve coordination and ensure resources are available to support projects. It was signed in December 2014 and effective for a 3-year period from 2014 to 2017.

    Eligible countries include Afghanistan, Armenia, Bangladesh, Bhutan, Cambodia, India, Indonesia, the Kyrgyz Republic, the Lao PDR, Myanmar, Nepal, Pakistan, Papua New Guinea, the Philippines, Samoa, Sri Lanka, Timor-Leste, Uzbekistan, and Viet Nam.

  • Islamic Development Bank
    Islamic Development Bank Agreement

    Total current commitment: $2.5 billion
    Approved for projects: $931.9 million for 10 projects

    In 2008, the Islamic Development Bank (IDB) and ADB signed a framework cofinancing agreement to develop a strong institutional partnership. The agreement was the first for programmatic cofinancing between ADB and another multilateral development bank. As a result, IDB earmarked $2 billion in cofinancing for a shared pipeline of projects from 2009 to 2011.

    In November 2011, IDB and ADB renewed their agreement to enhance the existing cooperation. Under the new agreement, IDB earmarked $2.5 billion to cofinance a joint pipeline covering projects in agriculture, education, energy, health, regional cooperation, private sector development, transport, and urban services from 2012 to 2014. In September 2014, ADB and IDB extended their agreement until 2017 under the same terms and coverage. Common member countries eligible for cofinancing under the agreement are Islamic countries, including Afghanistan, Azerbaijan, Bangladesh, Indonesia, Kazakhstan, the Kyrgyz Republic, the Maldives, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan.

    As of end 2015, IDB has provided $931.9 million in loan cofinancing for ten projects consisting of $865.3 million for eight sovereign projects and $66.6 million for two nonsovereign projects. ADB and IDB collaborated on an energy project in Bangladesh, and a housing for integrated rural development project in Uzbekistan in 2015.

  • Nordic Development Fund
    Nordic Development Fund Arrangement

    Approved for projects: $43.7 million for 16 projects

    In January 2011, ADB and the Nordic Development Fund (NDF) signed a memorandum of understanding for institutional cooperation and cofinancing of programs and projects. Under this arrangement, the NDF supports pilot projects on climate change mitigation and adaptation, particularly in areas of common interest in the energy, infrastructure, and natural resources sectors. The following ADB DMCs are the current focus of NDF activities: Bangladesh, Cambodia, the Lao PDR, Nepal, Sri Lanka, and Viet Nam.

  • OPEC Fund for International Development
    OPEC Fund for International Development Agreement

    Total current commitment: $600 million
    Approved for projects: $175.3 million for 8 projects

    OFID and ADB formalized a memorandum of understanding in 2011 to enhance collaboration between the two institutions. Subsequently, a framework cofinancing agreement was signed in April 2012, earmarking at least $600 million in cofinancing through 2015.

    OFID and ADB renewed their cooperation in August 2016 by signing a framework cofinancing agreement, committing at least $600 million in cofinancing through 2021 to support projects in renewable energy and energy efficiency, transport, agriculture, water supply and sanitation, education, and health.

    OFID aims to fund projects in the following priority ADB DMCs: Armenia, Azerbaijan, Bangladesh, Bhutan, Cambodia, India, Kazakhstan, the Kyrgyz Republic, the Lao PDR, the Maldives, Mongolia, Nepal, Papua New Guinea, the Philippines, Samoa, Solomon Islands, Sri Lanka, Tajikistan, Tonga, Turkmenistan, and Uzbekistan.

Bilateral Partners

  • Abu Dhabi
    Abu Dhabi Fund for Development Arrangement

    Approved for projects: $60 million for 2 projects

    Aimed at increasing cooperation, the Abu Dhabi Fund for Development (ADFD) and ADB signed their first memorandum of understanding (MOU) in February 2012. The arrangement provides a general framework within which both institutions develop and undertake collaborative work to pursue common objectives more strategically and effectively. Education, energy, finance, health, regional initiatives, trade, transport, and the urban services sectors were identified as priority areas of cooperation. All of ADB's developing member countries (DMCs) are eligible for ADFD cofinancing. As of the end of 2015, a total of $60 million for two projects have been provided by ADFD under the agreement.

  • People's Republic of China
    Agreement with the China Eximbank

    Approved for projects: $75.6 million for 1 project

    In May 2009, the Export-Import Bank of China (China Eximbank, a state bank in the PRC) and ADB signed a framework cofinancing agreement to deepen their institutional partnership along the lines of programmatic cofinancing. The agreement, built on a memorandum of understanding signed in 2006, aimed at simplifying access to financing for infrastructure projects by governments, subsovereign borrowers, and private entities.

    In 2012, the two organizations conducted a joint retreat in Beijing to deepen mutual understanding of cofinancing operations. The first cofinancing approved under the agreement was a $75.6 million loan in 2013. All of ADB’s DMCs eligible for ordinary capital resources are qualified for cofinancing under the agreement.

  • France
    Framework Agreement with Agence Française de Développement

    Total current commitment: $1.3 billion
    Approved for projects: $946.4 million for 12 projects

    Agence Française de Développement (AFD) and ADB signed two key agreements in 2010: a partnership framework agreement for 2010–2016 and a framework cofinancing agreement for 2010–2013. In the partnership framework agreement, the two institutions agreed to enhance institutional, research, and knowledge cooperation, and to pursue operational cooperation in the form of cofinancing, joint research and development of knowledge products, a staff exchange program, and regular policy dialogue in the spirit of the Paris Declaration on Aid Effectiveness.

    The framework cofinancing agreement further detailed financing partnership arrangements to ensure effective and efficient cofinancing operations. It included an indicative cofinancing amount of $600 million for loans and grants over a 3-year period from 2010 to 2013. AFD provided a total of $432 million for eight projects under the agreement.

    An amended and restated framework cofinancing agreement was signed in May 2013 during the 46th ADB Annual Meeting in Delhi, India. The amended agreement aims to reach $1.3 billion in cofinancing from each institution until 2016. Eligible countries include Afghanistan, Armenia, Azerbaijan, Bangladesh, Cambodia, the People's Republic of China (PRC), Georgia, India, Indonesia, Kazakhstan, the Lao People’s Democratic Republic (Lao PDR), Myanmar, Pakistan, the Philippines, Sri Lanka, Thailand, Uzbekistan, and Viet Nam. The amended and restated agreement so far has resulted in $946.4 million of cofinancing for 12 projects.

  • Germany
    KfW Arrangement

    Total commitment: $2 billion
    Approved for projects: $1.32 billion for 7 projects

    On 2 July 2014, ADB and KfW signed a memorandum of understanding (MOU) for a $2 billion collaborative cofinancing to help promote development in Bangladesh, India, Indonesia, Mongolia, and Viet Nam. The identified sectors and areas of common interest are renewable energy and energy efficiency, urban infrastructure including urban mobility, climate and SME financing, vocational training, and regional integration. Following the signing of the MOU, ADB and KfW agreed to further explore cofinancing operations in Afghanistan, PRC, Myanmar, Nepal and Sri Lanka. ADB and KfW also agreed to strengthen cooperation in matters relating to harmonization of each institutions design and project implementation processes, joint knowledge management events and research, staff exchange, and retreats and trainings. This critical partnership helps ADB and its DMCs to scale-up and expand cofinancing operations in sectors of highest priority.

  • Republic of Korea
    Republic of Korea Arrangement

    Total current commitment: $600 million
    Approved for projects: $379.5 million for 5 projects

    The Ministry of Strategy and Finance of the Republic of Korea and ADB signed a memorandum of understanding on enhancements to cofinancing arrangements in 2008, and renewed it in 2011 and then in May 2015. The commitment amounts to $600 million for concessional cofinancing projects until 2017. The arrangement, implemented by the Export-Import Bank of Korea, was signed and renewed for clean energy, water supply and sanitation, waste treatment, agriculture, sustainable transport, vocational education and training, information and communication technology–based governance, finance, and education reform. Priority countries eligible under the current arrangement are Azerbaijan, Bangladesh, Cambodia, Indonesia, the Lao PDR, Mongolia, Nepal, Pakistan, the Philippines, Sri Lanka, Uzbekistan, and Viet Nam.

  • Kuwait
    Kuwait Fund Arrangement

    Approved for projects: $17 million for 1 project

    In 2015, ADB and the Kuwait Fund for Arab Economic Development (Kuwait Fund) signed a memorandum of understanding (MOU) on establishing cooperation arrangements during the 48th ADB Annual Meeting in Baku, Azerbaijan. The MOU marked a formal collaboration between the two institutions, envisioning to strengthen partnership at the institutional level and the programmatic cofinancing at the project level. Under the MOU, the two institutions also signed a project-specific arrangement. Kuwait Fund provided $17 million collaborative additional cofinancing for an agriculture project in Nepal.

Financing partnership facilities

These are operational mechanisms for strategic, long-term, multi-partner cooperation that link various forms of assistance in a coordinated manner for well-defined purposes. These may include trust funds, special funds, risk-sharing mechanisms, or knowledge sharing that financing partners agree upon to support a specific sector. See financing partnership facilities administered by ADB.

Global funds

ADB helps developing member countries gain access to global funding initiatives managed by other multilateral banks, including the:

See Operational Procedures, paragraphs 23-26 of the Operations Manual: Financing Partnerships.

Preparatory steps and arrangements

ADB may actively solicit cofinancing, provide information on the feasibility and viability of a project, hold consultations with cofinanciers in the field and at headquarters from the early stages of the project processing cycle, and provide administrative services in respect of procurement, disbursement, and other matters as required by cofinanciers if their funds are untied.

ADB’s Office of Cofinancing Operations coordinates with official funding agencies during the preparation of the DMC’s country partnership strategy, which serves as the basis for identifying and designing the projects to be financed by ADB in the DMC during the next 3 years. This coordination continues into the project processing cycle.

ADB encourages prospective partners to identify cofinancing opportunities and to contact ADB early in the project processing cycle. In this way, partners can actively participate in project design and appraisal activities.

Office of Cofinancing Operations Contacts

Business and Management Support

General management support, optimization of processes and procedures, and capacity-building programs and events

Toshimasa Dojima
Principal Financing Partnerships Specialist
  E-mail

Batir Mirbabaev
Senior Financing Partnerships Specialist
  E-mail

Partners Team

Negotiation of trust funds, financing partnership facilities, and cofinancing agreements; administration of global funding initiatives which ADB participates in

Ilaria Caetani
Principal Financing Partnerships Specialist
  E-mail

Rikard Elfving
Senior Financing Partnerships Specialist
  E-mail

Wooseok Kang
Financing Partnerships Specialist
  E-mail

Toshimasa Mae
Financing Partnerships Specialist
  E-mail

Takafumi Mafune
Financing Partnerships Specialist
  E-mail

Saad Paracha
Financing Partnerships Specialist
  E-mail

 
Partner Name Partner Type Contact
ASEAN Infrastructure Fund Multilateral Rikard Elfving
Asian Infrastructure Investment Bank (AIIB) Multilateral Saad Paracha
Eurasian Development Bank (EDB) Multilateral Batir Mirbabaev
European Bank for Reconstruction and Development (EBRD) Multilateral Rikard Elfving
European Investment Bank (EIB) Multilateral Rikard Elfving
European Union (EU) Multilateral Ilaria Caetani
International Fund for Agricultural Development (IFAD) Multilateral Ilaria Caetani
Islamic Development Bank (IDB) Multilateral Saad Paracha
Nordic Development Fund (NDF) Multilateral Rikard Elfving
Nordic Investment Bank (NIB) Multilateral Rikard Elfving
OPEC Fund for International Development (OFID) Multilateral Saad Paracha
United Nations (UN) Multilateral Ilaria Caetani
World Bank Group Multilateral Ilaria Caetani
Australia Bilateral Ilaria Caetani
Austria Bilateral Wooseok Kang
Belgium Bilateral Wooseok Kang
Brunei Darussalam Bilateral Wooseok Kang
Canada Bilateral Ilaria Caetani
China, People's Republic of Bilateral Saad Paracha
Denmark Bilateral Wooseok Kang
Finland Bilateral Rikard Elfving
France Bilateral Saad Paracha
Germany Bilateral Rikard Elfving
Hong Kong, China Bilateral Ilaria Caetani
India Bilateral Ilaria Caetani
Ireland Bilateral Rikard Elfving
Italy Bilateral Wooseok Kang
Japan Bilateral Takeshi Koike
Korea, Republic of Bilateral Wooseok Kang
Kuwait Bilateral Saad Paracha
Luxembourg Bilateral Wooseok Kang
The Netherlands Bilateral Rikard Elfving
New Zealand Bilateral Ilaria Caetani
Norway Bilateral Rikard Elfving
Portugal Bilateral Rikard Elfving
Saudi Arabia Bilateral Saad Paracha
Singapore Bilateral Wooseok Kang
Spain Bilateral Rikard Elfving
Sweden Bilateral Ilaria Caetani
Switzerland Bilateral Rikard Elfving
Taipei,China Bilateral Ilaria Caetani
United Arab Emirates Bilateral Saad Paracha
United Kingdom Bilateral Rikard Elfving
United States Bilateral Ilaria Caetani
Uzbekistan Bilateral Rikard Elfving