Hosted by the president of the Inter-American Development Bank (IDB), Ilan Goldfajn, the leaders of 10 multilateral development banks met this Saturday in Washington to boost collaboration between them and increase the impact and scale of their actions with the in order to promote development. The meeting was attended, among others, by the president of the World Bank, Ajay Banga, and the president of the European Investment Bank, Nadia Calviño, as well as the managing director of the International Monetary Fund (IMF), Kristalina Georgieva. The meeting took place taking advantage of the spring meetings of the IMF and the World Bank, which were held this week.
“[Estoy] very proud to host a retreat with my colleagues heads of multilateral development banks at the IDB headquarters,” said Goldfajn. “In an unprecedented occasion, we are announcing joint steps and concrete results, to work more effectively as a system to better serve our member countries. Working as a system, for our countries, with concrete results, is powerful! “It has impact!” he added.
The 10 organizations that have participated are the African Development Bank (AfDB), the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB), the Council of Europe Development Bank (ECDB), the Bank Reconstruction and Development Bank (EBRD), the European Investment Bank (EIB), the Islamic Development Bank (IsDB), the New Development Bank (NBD), the World Bank Group (WBG) and the Inter-American Bank of Development (IDB), which holds the rotating presidency of the group.
“[Ha sido una] very fruitful meeting of the Multilateral Development Institutions to deepen our coordination and act as a system,” tweeted Nadia Calviño. “We will move forward with five concrete actions to increase financing, drive action for climate and nature, streamline processes and mobilize private investment,” she added.
Very fruitful meeting of Multilateral Development Institutions to deepen our coordination and deliver as a system
We will move ahead with 5 concrete actions to scale up financing, boost climate & nature action, streamline processes & mobilize private investment.#SpringMeetings pic.twitter.com/jRAPwWxWFB
— Nadia Calviño (@NadiaCalvino) April 20, 2024
The leaders of the 10 banks have signed a 17-page working document. “We recognize our collective duty to accelerate international efforts to eradicate poverty and hunger, reduce inequalities, address regional and global challenges, including climate and health, as well as drive inclusive socioeconomic development,” they state in it. . “As a group, we reaffirm our determination to fulfill our commitments and continue to strengthen our collaboration for the benefit of poor and vulnerable countries, communities and people,” they add.
Development bank heads committed to delivering concrete, actionable results in five critical areas. First, they commit to increasing their capacity to finance the MDBs. They hope to generate additional lending margin in the range of $300-400 billion over the next decade, with the support of shareholders and partners. To this end, among other measures, they will offer innovative financial instruments to shareholders, development partners and capital markets, including hybrid capital and risk transfer instruments, and they will also promote channeling IMF Special Drawing Rights (SDR). The IDB alone has approved historic reforms to increase its lending capacity by $112 billion over 10 years.
Secondly, they will promote joint action on climate change. They will use common criteria to measure their adaptation and mitigation actions, jointly report on climate financing, and continue to support and improve early warning systems for natural disasters. Some of the organizations already have bilateral alliances with each other in this matter, such as the IDB and the World Bank.
They have also decided to strengthen collaboration and co-financing at the national level. Actions to be taken include evaluating proposals on country and country-led platforms, to reach a common understanding and continue to harmonize procurement practices, including relying on each other's procurement policies, to reduce transaction costs and increase efficiency and sustainability.
Mobilize the private sector
Another key shared point is to catalyze the mobilization of the private sector for development goals, including through the application of innovative financial approaches and instruments. Agreed actions include increasing local currency lending and currency risk hedging solutions to boost private investment and increase transparency so investors can better assess investment risks and opportunities.
The fifth point addressed by the document proposes improving the effectiveness and development impact of the actions of multilateral banks. To this end, they agree to increase collaboration on joint impact assessments, including by sharing monitoring and evaluation approaches, and implementing harmonization initiatives where useful. They will also take stock of the nature and biodiversity key performance indicators currently in use and explore the feasibility of aligning some indicators before COP30 in 2025.
“Looking ahead, we are willing to provide regular updates on the progress of multilateral development banks working as a system to achieve impact and scale,” the document indicates in its conclusions. “This will facilitate continuity of efforts, as well as effective implementation of reforms, shareholder support and alignment with customer needs and demands. “We will continue to improve the way we work together as a system, while continuing to collaborate with our customers, shareholders, development partners, the United Nations, civil society and other stakeholders,” he adds.
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