AFD and the World Bank, Partners for Greater Impact

Meeting the crucial challenges of our time calls for an unprecedented degree of collaboration between major international institutions. That's why, in June 2023, the World Bank Group confirmed its support for the Finance in Common initiative, to bring together more than 500 public development banks, collectively responsible for $2.5 trillion in annual investments. The aim is to harness the power of the financial system in support of the Sustainable Development Goals (SDGs).

This move to scale builds on ten years of unprecedented collaboration between the two major international institutions. Since 2013, AFD Group and the World Bank have jointly invested in over 100 co-financed projects, aimed in particular at combating climate change, poverty and inequality. This partnership, based on complementary expertise and a shared vision of a fairer, more sustainable future, has made it possible to improve the living conditions of millions of people, reduce the fragmentation of development aid, and ensure greater alignment with the priorities of the countries concerned.

Further reading: Global Development Banks' Architecture 

One of the most emblematic collaborations between AFD Group and the WBG is their joint action on financial systems and capital mobilization. It focuses on financial systems, financial inclusion and green finance. Their collaborative work also seeks to improve alignment with financial institutions and the Paris Agreement, and support financial institutions in their efforts to achieve the SDGs, particularly in terms of biodiversity, climate and gender. 

The two Groups are co-founders of the Consultative Group to Assist the Poor (CGAP), which enables the creation of sustainable, resilient and equitable financial ecosystems, with a focus on households that are disadvantaged in terms of access to financial services.

Another sector benefiting from the effectiveness of these joint efforts is social protection. Since 2016, in Africa, Asia, Latin America, the Caucasus, or the Indian Ocean, the two public banks have been cooperating on investment projects or budget support operations. 

Deepening Collaboration for Greater Impact

They have also collaborated in China for example, with the Guizhou Elderly Care program in 2019, and in Georgia, with the Human Development Capital program, since 2022. AFD and the World Bank have also been able to offer "disaster deferred drawdown options", which is a conditional line of credit that provides immediate financing to countries in the event of a disaster. It helps develop a country's capacity to manage risk, and must be part of a broader preventive management strategy. This type of scheme proved its worth, for example, following the Covid-19 pandemic.

On the strength of these encouraging dynamics, the AFD and World Bank groups intend to deepen their collaboration in 2024 with the signing of a new strategic memorandum of understanding and a co-financing framework agreement, to strengthen the existing arrangements. It will now be possible to finance a project through a combination of task delegation and parallel financing, i.e. different contracts for the same project. 

This new framework agreement will continue to include all the cooperation instruments used by the two development banks. It also allows for the mutual reinforcement of expertise, capitalization on respective best practices, and joint responses to new challenges - the support of new subjects for the benefit of customers and partners alike.

Risk-sharing remains a driving force, for example in the case of operations in fragile countries. It is for this reason that the WBG has invited AFD to join the new co-financing platform to capitalize on our partnership, and mobilize more widely in favor of the SDGs. 

By combining the financial clout of the World Bank with the agility and on-the-ground presence of AFD, the two development banks are reinforcing their tools and the means by which they will continue to work to change the course of the entire development ecosystem.

Further reading: Overview of the World Bank Group - AFD Group Partnership