Agreement with EIB Facilitates Co-Financing in Emerging Markets
IFC and EIB recently agreed to further strengthen cooperation by improving the way the two institutions co-finance projects. Initially to be piloted in the Africa, Caribbean, Pacific. and MENA regions, under the agreement the internal processes for projects co-financed by IFC and EIB will be better aligned.
On the occasion of the signing, IFC EVP and CEO Lars Thunell stated, “In a time of economic uncertainty, it is more important than ever for international finance institutions to collaborate to support private sector companies investing in emerging markets. This agreement deepens the partnership between IFC and EIB, and it will benefit our client governments while allowing us to respond quickly to the most urgent development challenges.”
The partnership with EIB has improved greatly since the onset of the 2008 financial crisis. The Joint IFI Joint Action Plan for Central and Eastern Europe is often cited as a success, and served as a model for similar cooperation in Africa and the Caribbean. EIB also joined several IFC crisis initiatives such as the Microfinance Enhancement Facility and the Africa Bank Capitalization Fund.
The IFC-EIB Collaboration Agreement seeks to facilitate the co-financing of projects in cases where IFC and EIB are the only co-financiers and increase efficiencies by defining guiding principles covering the application process and allocation of responsibilities between both institutions.
Areas of cooperation and coordination include:
Execution of mandate agreements
The appraisal and due diligence process
The handling of client requests
Philippe Maystadt, the former president of EIB who signed the agreement as his last official act at the institution, said, “This agreement provides a welcome opportunity to reduce duplication of administrative procedures and improve the effectiveness of lending operations in emerging markets. Closer cooperation between EIB and IFC when acting as joint-lenders will allow a stronger contribution to private sector growth.”