The Islam Development Bank and Africa Development Bank to co-finance US$1billion through 2028 to support vital and green investments in the global south

Dr. Muhammad Al Jasser, Chairman of the Islamic Development Bank (IsDB) Group, and Mr. Rémy Rioux, Chief Executive Officer (CEO) of Agence Francaise de Developpement (AFD), signed today a new Memorandum of Understanding (MoU) to guide cooperation and co-financing over the period 2023-2028.

The MoU aims at reinforcing the strategic and operational collaboration between the IsDB, a AAA-rated multilateral development bank from the Global South, and AFD, France’s leading bilateral aid provider, through project development and co-financing in developing countries, especially in Africa.
To illustrate, IsBD and AFD recently cofinanced a large water and sanitation project in Cotonou (Benin) with 89m euros from IsDB and 40m euros from AFD (2021) and jointly committed to finance a large-scale program in Nigeria on entrepreneurship, job creation and support to the development of fast-growing industries.

Building on these experiences and recognizing their mutual expertise and knowledge in development financing, this MoU sets a US$ 1 billion target for the period (US$ 500 million each) to co-finance projects in line with the Sustainable Development Goals (SDG) and the Paris climate agreement. It will focus on the following priority sectors where there is a growing demand from developing countries: climate and green finance, sustainable infrastructures and urban development, resilient and inclusive agriculture and food systems, education, health and social services for all and private sector development.

Background:

IsDB and AFD have a long history of collaboration since 1976. In addition, to co-financing, IsDB and AFD are also collaborating on global advocacy to mobilize additional public and private finance for development purposes through, for example, the Paris Peace Forum, the Finance in Common Coalition and Summit (FiCS), the International Development Finance Club (IDFC) and the upcoming Summit for a New Global Financing Pact taking place in Paris on 22nd & 23rd June 2023.

“I am very pleased today to sign our new joint Memorandum of Understanding with the IsDB. It concretely sets financial objectives, priority sectors of collaboration and a basis for operational exchanges at regional hub levels as well as at general management levels, to achieve them. It is exactly what we aim to do at a larger scale in the Finance in Common Movement, representing 530 public development banks, be they bilateral, regional, multilateral or domestic, which can all contribute to redirect investment flows towards the SDGs”, commented Remy Rioux, Chief Executive Officer, AFD

IsDB President Al Jasser, for his part, stated “AFD is one of IsDB’s long-standing partners, having co-financed IsDB’s very first operation in 1976. Our partnership has since gone from strength to strength and yielded over US$4 billion in co-financing, supporting total investment worth over US$10 billion, mainly in the infrastructure sector. I am highly confident that the new Memorandum of Understanding AFD and IsDB signed today will give a new impetus to our partnership and collective support to mutual client countries towards the attainment of the Sustainable Development Goals”.