What is Cofinancing? | Asian Development Bank

What is Cofinancing?

ADB’s mandate to reduce poverty in Asia and the Pacific requires a scale of investment that can only be partially delivered through its own resources. To respond to the growing needs of the region, ADB works jointly with international development agencies, multilateral and bilateral institutions, the private sector, and other emerging development partners to fund activities that improve people's lives in the region.

Cofinancing is a well-established way of working for development. Donors, multilateral institutions, and development agencies come together to assist developing countries with a variety of projects to improve people’s lives. When partners jointly finance a program or project, they each bring the best they can offer to the deal. Done well, cofinancing leverages the resources—funding, knowledge, and expertise—of all partners, to the greater benefit of the poor.

Official cofinancing

Official cofinancing mainly comes from multilateral and bilateral development assistance agencies that are funded by sovereign states. It mobilizes funding for grants, loans, and technical assistance activities in developing member countries. With loans offered at terms more favorable than than those available commercially, official cofinancing aims to deliver low transaction costs, efficient processing, and transparency on the development impact of donor contributions. More on official cofinancing

Commercial cofinancing

Commercial cofinancing facilitates investment, trade, and capital flows into developing member countries. Both private and public institutions provide this type of cofinancing. It is usually sourced from financial markets and priced at commercial terms. Such arrangements are particularly effective for projects and programs that commercial partners would consider risky without ADB involvement. More on commercial cofinancing

Other concessional cofinancing

Private sector partnerships

Socially responsible companies, foundations, and philanthropic institutions have pursued development causes with impressive persistence and results. Foundations and private sector organizations provide new and complementary knowledge and experience, resources, and a means to improve the development effectiveness of ADB’s work. ADB seeks to enhance outreach and impact through strategic and sustained partnerships with these new development partners. More on private sector partnerships

Other sources

Such cofinancing mobilizes and syndicates grants and concessional loans for investment projects and programs and technical assistance projects, with ADB participation. This includes any other sources that do not fall under the categories above.

See Bank Policies, paragraph 8 of the Operations Manual: Financing Partnerships.