The World Bank and the Asian Development Bank (ADB) have signed an agreement to streamline development finance, introducing a unified set of conditions and requirements for borrowers in co-financed projects.
Under the Full Mutual Reliance Framework (FMRF), the two major lending institutions will enhance their collaboration, enabling borrowers to adhere to a single set of policies and procedures—either those of the World Bank or the ADB—across all aspects of project design, preparation, appraisal, supervision, completion, and evaluation, according to a press release from the World Bank.
This first-of-its-kind arrangement between multilateral development banks (MDBs) aims to reduce costs, shorten processing times, and harmonise policies, thereby creating a more integrated global development finance system, the World Bank stated.
The framework responds to international calls, including those from the G20, for MDBs to collaborate more closely to maximise impact and address global development challenges more effectively.
“The Full Mutual Reliance Framework is a significant milestone in our partnership with the World Bank and will bring lasting benefits to communities and economies across Asia and the Pacific,” said ADB President Masatsugu Asakawa.
“By leveraging our respective strengths, we can enhance efficiency, scale impact, and provide a robust foundation for sustainable and inclusive growth.”
World Bank Group President Ajay Banga also emphasised the importance of increased cooperation in development financing.
The framework will initially be implemented in selected public sector projects over a four-year pilot phase, beginning in 2025. This will allow for the refinement of operational approaches and the assessment of outcomes.
Building on previous co-financing efforts, such as the 2018 Procurement Framework Agreement, the FMRF incorporates lessons from engagements with civil society organisations, borrowing countries, and other stakeholders.
Under the framework, one institution will act as the “Lead Lender,” overseeing project design, preparation, appraisal, supervision, and evaluation. The other, termed the “Trail Lender,” will contribute through knowledge-sharing and provide limited support, without holding decision-making or fiduciary responsibilities.
This initiative is expected to serve as a model for deeper collaboration among MDBs, addressing urgent development needs while fostering knowledge-sharing and innovation.
