IDB, AFD to Boost Co-Financing and Strengthen Coordination

The Inter-American Development Bank (IDB) and the French Development Agency (AFD) signed an agreement to boost co-financing and strengthen their long-standing collaboration partnership to help both institutions better achieve shared development goals in Latin America and the Caribbean.

This step renews a Partnership Framework Agreement through 2029 that will standardize processes and execution mechanisms for co-financed operations between the IDB and AFD. It will focus collaboration along three main lines: co-financing IDB operations; global positioning and advocacy through joint events, conferences, and meetings; and staff exchange programs.

"More than five years of successful collaboration with AFD through the Partnership Framework Agreement signed in 2018 have allowed us to make a significant impact on the region's development by co-financing projects in 15 countries, totaling $6.3 billion in areas such as climate change and the fight against poverty. We are pleased to continue exploring co-financing opportunities while improving coordination to serve better our borrowing member countries" said IDB President Ilan Goldfajn.

"This renewed agreement creates bright prospects for increasing our joint mobilization in Latin America and the Caribbean. But beyond financial and technical instruments, we are also strengthening the partnership between our institutions, advocating for sustainable development alignment within international fora. After co-organizing the last Finance in Common Summit (FiCS) in Cartagena, Colombia, we will meet again with all willing public development banks for the next FiCS Summit held in Cape Town, from February 26 to 28, for imagining concrete proposals to reorient finance towards SDGs" said Rémy Rioux, CEO of AFD.

The framework agreement will also help both institutions take action to address climate change and biodiversity loss, promote sustainable cities and urban development, strengthen governance and institutional capacity, reduce inequalities, foster private sector development, and collaborate in the design and implementation of innovative financial instruments.

The IDB and AFD have been working together since 2008, when they signed the first of several Memorandums of Understanding (MoU) and then, in 2018, their initial Framework Agreement to enhance cooperation on global public goods, climate change, sustainable development, and poverty alleviation through co-financed projects.

Since 2018, the IDB and AFD have approved co-financing operations totaling $6.3 billion, with $2.4 billion contributed by AFD. Key initiatives have included electric transmission projects in Argentina, support for vulnerable populations in Brazil and Bolivia, decarbonization plans in Costa Rica, and responses to COVID-19 and transportation needs in the Dominican Republic.

The institutions also launched an annual multiphase programming exercise called "Deep Dive," which enabled the two institutions to bring a joint policy dialogue to country level, thereby increasing co-financing opportunities. This collaboration has resulted in seven programming exercises and enhanced decentralized dialogue to align strategies and promote discussions on current and future co-financed operations, as well as on grant resource mobilization from AFD to IDB projects in social and climate change sectors.