World Bank unveils co-financing platform to "improve development impact"

WASHINGTON, April 19 (KUNA) -- A coalition of 10 multilateral development banks (MDBs) launched a new co-financing platform that will enable them to channel additional capital for development scale and impact.
The Global Collaborative Co-Financing Platform will consist of the digital Co-Financing Portal which will create a secure platform for registered co-financiers to share project pipelines," according to a statement released by the World Bank on Friday. This tool, hosted at the World Bank, will increase efficiency and transparency and make it easier for MDBs to share information and identify opportunities for co-financing.
The platform also includes the "Co-Financing Forum," which will provide a space for participants to discuss co-financing opportunities, best practices, and common issues, and will support ongoing efforts to coordinate policies to reduce the burden on partner countries.
For countries, the new platform will reduce the administrative burden and transaction costs, and enable better coordinated financing in line with their priorities-resulting in greater development impact.
By leveraging partnerships and promoting transparency, the platform will enable MDBs, partner agencies, and client countries to address global challenges more effectively and efficiently.
Strengthening partnerships is a key element of the World Bank Group's new playbook aimed at boosting impact. Co-financing has been identified as an effective way to improve strategic alignment, crowd in concessional resources, promote efficiency, and strengthen coordination, the statement noted.
MDBs that will be part of the new co-financing platform include: African Development Bank, Asian Development Bank, Asian Infrastructure Investment Bank, Council of Europe Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, Islamic Development Bank, New Development Bank, and the World Bank Group.
The new financial instruments designed to boost lending capacity and enable the World Bank Group to take on more risk for shared global challenges have received a significant endorsement. A set of 11 countries announced commitments today for the Portfolio Guarantee Platform, hybrid capital mechanism, and new Livable Planet Fund totaling USD 11 billion, according to the statement.
The World Bank Group's unique leveraging capability enables the resources pledged to hybrid capital and the Portfolio Guarantee Platform to be multiplied six to eight times over 10 years. Under certain conditions, the leverage amount could reach tenfold.
The resources pledged today could provide up to $70 billion in urgently needed funds, which can be deployed to address cross-border challenges and advance development goals.
"We worked hard to develop these new financial instruments that boost our lending capacity, multiply donor funds, and ultimately allow us to improve the lives of more people," said Ajay Banga, World Bank Group President. "The generosity of these countries is both an endorsement of the progress we have made to reform the Bank, and a sign of their shared commitment to development globally," Banga added.
Belgium, France, Japan, and the United States pledged to the Portfolio Guarantee Platform, while Denmark, Germany, Italy, Latvia, the Netherlands, Norway, and the United Kingdom made commitments to hybrid capital.
Japan is committed to providing the first contribution to the new Livable Planet Fund. The World Bank Group has implemented a series of reforms and developed innovative financial instruments as part of the Capital Adequacy Framework review, which was recommended by the G20 Expert Group. These reforms include: Adjusting the loan-to-equity ratio to secure $40 billion over 10 years from the IBRD's balance sheet.
Increasing the bilateral guarantee limit by USD 10 billion.
Working to maximize callable capital benefits by publishing a detailed report for rating agencies to better assess its potential value and the Bank's financial capacity Introducing hybrid capital, giving shareholders and partners an opportunity to invest in bonds with special leveraging potential.
Developing the Portfolio Guarantee Platform that provides a shared approach to risk that will make World Bank financing more widely available.
Launching a Livable Planet Fund that enables governments', philanthropies' and other partners' contributions to incentivize cooperation across borders and tackle shared challenges.
The World Bank Group has taken the additional steps to develop IBRD 50-year loans at no additional cost for borrowers. These loans will be utilized for projects that provide cross-border benefits. Additionally, we created a system to reduce interest rates for projects that address global challenges, which will be partially funded through the Livable Planet Fund. (end) rsr.gb