ADB Strategy 2030 calls for building strong partnerships with diverse institutions, such as private and public financial institutions and traditional and new development partners. ADB’s financing partners heeded this call in 2019, committing about $4.71 billion in loans and grants for specific projects and $181 million for ADB’s trust funds.
ADB’s financing partners have two modalities for cofinancing with ADB─they can cofinance individual projects, programs, or technical assistance, referred to as “project-specific cofinancing,” or they can create a trust fund or contribute to one or more of ADB’s existing trust funds.
Financing partners keen on strategic long-term collaborations may agree with ADB on an indicative amount of development finance for a specific amount of time, which can be divvied up into specific projects or trust funds. In such cases, ADB and the financing partner sign a partnership framework agreement to formalize and define the partnership in broad terms.
Project-specific cofinancing, whether for a loan or a grant, is undertaken by ADB and a financing partner through a signed cofinancing agreement, if the cofinancing is to be administered by ADB, or a memorandum of understanding, if the cofinancing will not be ADB-administered. ADB also accesses the resources of Global Funds for project-specific cofinancing. In 2019, ADB mobilized $4.71 billion in loans and grants from partners.
Trust funds are single– or multi-partner channels of cofinancing resources to fund various projects, programs, technical assistance, and other activities. ADB administers contributions of financing partners as a trustee or administrator of about 45 trust funds, 14 of which fall under umbrella Financing Partnership Facilities. In 2019, trust funds contributed around $181 million in ADB’s sovereign operations.
Partnership framework arrangements (PFAs), also expressed as framework cofinancing arrangements (FCAs), memoranda of understanding (MOU), and similar terms, facilitate better strategic collaboration, cooperation, and complementarity. PFAs involve a funding envelope to cover a broad range of planned and coordinated cofinancing activities over a period. They also serve as a tool for surfacing and resolving concerns that may arise during project negotiations. In 2019, ADB had active PFAs with 11 financing partners, with a total funding envelope of $20.25 billion.