OREANDA-NEWS. On September 16, 2008 The Asian Development Bank (ADB) and the Islamic Development Bank (IsDB) signed a landmark cofinancing agreement, which will allow them to work together on projects in common member countries (Afghanistan, Azerbaijan, Bangladesh, Indonesia, Kazakhstan, Kyrgyz Republic, Maldives, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan).

The agreement calls on both institutions to provide up to US2 billion equivalent each over the next three years to finance projects in their common member countries.

The agreement — which is the first of its kind — is based on a 3-year business plan that includes a common vision, strategic framework, and best practice ideas in development financing.

The cofinancing will mainly target transactions in the infrastructure (including irrigation), utilities, and urban sectors. However, it may also cover education, health and other sectors in selected countries.

"This agreement is unique, timely and in line with the Accra High Level Forum and other international declarations on development effectiveness and harmonization", said Vice President Cisse of the Islamic Development Bank.

"In addition, this agreement provides a new platform from which both institutions will attempt to raise third party funds for investments in the common member countries. This is a breakthrough in collaboration between international financial institutions", said Juan Miranda, Director General of the Central and West Asia Department of the Asian Development Bank.

"The agreement takes us into a long-term partnership mode and it is consistent with the Strategy 2020 of the Asian Development Bank and Vision 1440H of the Islamic Development Bank", said Walid Abdelwahab, Director of Country Operations (Asia) of the Islamic Development Bank.

Werner Liepach, Principal Director of Cofinancing Operations of ADB, added: "Cofinancing is a precondition for effective development work these days and what is particularly enriching in this case is that we have two multilateral development institutions working together on a common platform for the benefit of their common clients."