The FINANCIAL -- The Asian Development Bank (ADB) and the German development bank KfW on September 28 agreed to scale up their existing cofinancing partnership with an additional $2 billion over the next 3 years until 2020 to continue promoting development in the Asia and Pacific region.
The Memorandum of Understanding (MOU) for cofinancing was signed by Diwakar Gupta, ADB Vice-President for Private Sector and Cofinancing Operations, and Roland Siller, Member of KfW’s Management Committee for Europe and Asia, at a ceremony held at the ADB headquarters in Manila, according to ADB.
“The agreement today is a testament of our growing partnership with KfW and proof that development work should be a collaborative process if it is to be impactful,” said Mr. Gupta. “We’re optimistic that the additional $2 billion in cofinancing from KfW will help promote sustainable development in Asia and the Pacific and bring us closer to the goal of a region free of poverty.”
The new agreement will build on the successful cofinancing partnership that ADB and KfW launched in 2014 for the same amount. The initial partnership (2014-2017) yielded 9 cofinanced projects focused on energy, public management, finance, education and technical and vocational education and training, and the environment in the People’s Republic of China (PRC), India, Indonesia, and Viet Nam. The $2 billion provided by KfW for these projects was complemented with $3.7 billion from ADB.
Germany is the second largest bilateral cofinancier of ADB projects after Japan. The additional cofinancing from KfW will help ADB address the region’s vast infrastructure needs, estimated at $1.7 trillion annually until 2030 including climate adaptation and mitigation costs.
The new MOU will allow the two institutions to expand cofinancing operations from five countries covered by the previous agreement to 11, including Afghanistan, Bangladesh, the PRC, India, Indonesia, Mongolia, Myanmar, Nepal, Pakistan, Sri Lanka, and Viet Nam. It will also cover new areas such as health and financial inclusion. Increasing financial resources and making greater use of high-level technology and innovative approaches are the two pillars of this partnership.