Leaders of two of Asia-Pacific’s biggest and most influential multilateral institutions put pen to paper Monday, signing a landmark partnership deal that will pave the way for co-financing and joint technical assistance to address the region’s development issues.
The memorandum of understanding, signed by Asian Development Bank President Takehiko Nakao and Asian Infrastructure Investment Bank chief Jin Liqun at the sidelines of the ADB’s annual meeting in Frankfurt this week, serves as a show of cooperation between the two institutions. Analysts have previously touted the institutions as possible rivals for the region’s lucrative development space.
One of the first projects under the partnership agreement, as Nakao told Devex last week, will be a 64-kilometer road project connecting the Shorkot and Khanewal communities in Pakistan’s Punjab province.
“ADB and AIIB agreed to strengthen cooperation, including cofinancing at the strategic and technical levels on the basis of complementarity, value added, institutional strengths and comparative advantages, and mutual benefit,” according to a joint press release of the two banks.
The partnership and collaboration framework came more than two weeks after the Beijing-based institution signed a similar deal with the World Bank to co-finance and cooperate on future development projects.
Nakao and Jin have been welcoming of each other’s operations, both citing the Asia-Pacific region’s massive development financing needs over the next couple of years — infrastructure needs alone are estimated at $800 billion per year until 2020. Cooperation can more effectively address the challenges than competition.
For example, Nakao told Devex in an exclusive interview that his institution has been helping the Beijing-based bank to craft, and then ensure adherence to its environmental and social safeguards framework. Jin and other officials of AIIB have been singing a similar tune in terms of cooperation with other multilateral institutions working in a shared development landscape.
The ADB-AIIB memorandum will allow the two institutions to develop co-financing strategies, share knowledge and join policy dialogue activities with a particular focus on development issues including energy, transportation, telecommunications, rural and agricultural development, water, urban development, and environmental protection.
Both banks are also aiming to undertake “regular high-level consultations and joint data collection to promote the implementation of the Sustainable Development Goals and the COP21 climate agreement,” according to the joint press release.
Lean Alfred Santos is a Devex development reporter focusing on the development community in Asia-Pacific, including major players such as the Asian Development Bank and the Asian Infrastructure Investment Bank. Prior to joining Devex, he covered Philippine and international business and economic news, sports and politics. Lean is based in Manila.
Subscribe to Devex Newswire
Top international development headlines emailed to you every day