ADB, KfW Expand Cofinancing Partnership with Additional $2 Billion
MANILA, PHILIPPINES (8 November 2019) — The Asian Development Bank (ADB) and KfW, the German state-owned development bank, today agreed to expand their existing cofinancing partnership with an additional $2 billion over the next 4 years in order to support continued economic development in the Asia and Pacific region.
The revised Memorandum of Understanding (MOU) for cofinancing was signed by ADB Vice-President Mr. Ahmed M. Saeed, KfW Management Committee for Europe and Asia member Mr. Stephan Opitz, and KfW Regional Manager for East and Southeast Asia Ms. Ulrike Lassmann at ADB headquarters in Manila.
“Germany is one of ADB’s original shareholders, and we have long had a very productive partnership with KfW, together financing more than $5 billion in energy, climate, and urban infrastructure projects over the last 5 years,” said Mr. Saeed. “Our new MOU builds on this good work and commits us to a deepening of our partnership in support of inclusive and sustainable development across Asia and the Pacific.”
“The relationship between KfW and ADB is an important pillar of KfW’s strategy in Asia,” said Mr. Opitz. “This new agreement reflects the successful cooperation that we were able to set up to the benefit of our Asian partners in recent years. I would like to emphasize that the success of such a collaboration is not only the cofinancing as such, but also the openness and trust to work together from all parties.”
The additional funds will build on the successful $2 billion cofinancing partnership that ADB and KfW launched in 2014 and renewed in 2017 for an additional $2 billion. The partnership (2014–2019) yielded 14 cofinanced projects focused on education, energy, health, industry and trade, and public sector management. The $4 billion provided by KfW for these projects was complemented with $5.8 billion from ADB.
At the signing event, ADB and KfW also signed an MOU for a collaborative cofinancing arrangement for an additional €200 million ($221 million) for the Fiscal and Public Expenditure Management Program, Subprogram 3, in Indonesia. An earlier MOU was signed for the project for €300 million on the sidelines of the 52nd Annual Meeting of ADB's Board of Governors in Fiji.
“The need for investment in Asia is enormous. That is why the signing of what is now the third agreement between KfW and ADB signifies the correct and consistent continuation of a successful partnership,” said Executive Director for Germany at ADB Mr. Helmut Fischer, who witnessed the signing. “With this agreement, KfW is providing on behalf of the Federal Republic of Germany a further $2 billion in German cofinancing contributions, which will be used to fund infrastructure in Asia to promote sustainable economic development, a cleaner environment, and renewable energy. I also welcome the new agreement for cooperation with Indonesia, a strategically important partner for German development cooperation in Asia and for development worldwide.”
Germany is the second largest bilateral cofinancier of ADB projects. The additional cofinancing from KfW will help ADB address the region’s vast infrastructure needs, estimated by ADB at $1.7 trillion annually until 2030 including climate adaptation and mitigation costs.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.