AfDB, MDB Strengthen Collaboration
The African Development Bank Group recently hosted 11 sister institutions for the annual multilateral development bank (MDB) roundtable on trust funds and co-financing.
The aim of the roundtable was to enhance benchmarking across the development finance institutions (DFIs), raise awareness of emerging innovative approaches to resource mobilisation and of new tools for cooperation, and to share institutional knowledge and best practices. Ultimately, its goal was to share the most efficient methods for mobilising resources towards the achievement of the Sustainable Development Goals (SDGs).
This year’s roundtable took stock of ongoing institutional reforms to the trust fund and co-financing environment in each MDB. Delegates noted the increased decentralisation of partnership and donor relation functions and outlined solutions to some of the challenges that such changes can bring. The group also discussed the role of developing countries in the establishment and management of the trust funds, and best practices in donor reporting. Roundtable sessions also considered blended finance and lessons learned in implementing European Commission (EC) funded projects, given the EC’s increasing influence on concessional resource flows, despite not being represented on the boards of most MDBs.
The World Bank’s director for trust funds and partner relations, Dirk Reinermann, led a dedicated session on the growing business of financial intermediary funds (FIFs), 25 of which the World Bank is currently trustee. The African Development Bank team provided a number of case studies during a session on de-risking tools to crowd in private sector investments in low-income countries, highlighting the work of the private sector credit enhancement facility (PSF) as well as its balance sheet optimisation work, which has helped to release headroom for further investment in fragile states.
Overall, the discussions raised the notion of ‘less is more’ given the increasing “bilateralisation of multilateralism”, as one participant put it.