Contents · 2019. 4. 2. · SIBDI Small Industries Development Bank of India SSC South-South Cooperation TC Triangular ... It is important to note that an area of cooperation that

ContentsAcronyms 1

1. Introduction 2

2. Methodology 2

3. Definitionalissues 2

3.1 Innovativefinancing 2

3.2South-SouthCooperation 3

3.2.1NewinitiativesforSSC 3

3.3TriangularCooperation:Adefinition 4

3.4IDFCpartnerships:CooperationforDevelopment 5

4. WhyDeeperCooperation? 5

5. LessonslearnedthroughTriangularCooperation 6

6. IDFCexperienceswithSouthSouthand/orTriangularCooperation 6

6.1 Bancóldex(Colombia) 7

6.2CAF(LatinAmerica) 7

6.3JICA(Japan) 7

6.4CDGGroup(Morocco) 8

6.5EIB,KfWandAFD(MutualRelianceInitiative) 8

6.6BNDES(Brazil) 8

6.7TSKB(Turkey) 8

6.8DBSA(SouthAfrica) 9

6.9CDB(China) 9

6.10NAFIN(Mexico) 9

7. WhitherTriangularCooperation? 9

7.1 UNStrategicPlan2014-2017 9

7.2Guardingagainstpaternalism 10

8. Analysis 11

8.1 Modalitiesofcooperation 11

8.2Capacitybuilding 11

8.3Knowledgesharing 12

8.4Deepenexistingcooperation 12

9. Conclusion 13

10. AnnexureA–Currentareasofcooperation 14

11. Annexure2:NewareasforCFD 19

AcronymsAFD AgenceFrançaisedeDéveloppement

AfDB AfricanDevelopmentBank

ALIDE LatinAmericanAssociationofDevelopmentFinanceInstitutions

APEC Asia-PacificEconomicCooperation

BANDESAL BancodeDesarrollodeElSalvador

BCIE BancoCentroamericanodeIntegraciónEconómica

BMZ FederalMinistryforEconomicCooperationandDevelopment

CAF DevelopmentBankofLatinAmerica

CDB ChinaDevelopmentBank

CDG GroupeCaissedeDépôtetdeGestion

CFE(Ecuador) FederalElectricityCommission(Ecuador)

COFIDE CorporaciónFinancieradeDesarrolloS.A.

DAC DevelopmentAssistanceCommittee

DBSA DevelopmentBankofSouthernAfrica

DFI DevelopmentFinanceInstitution

EIB EuropeanInvestmentBank

EU EuropeanUnion

GEF GlobalEnvironmentalFacility

GIZ GesellschaftfürInternationaleZusammenarbeit

IADB Inter-AmericanDevelopmentBank

IBSA IndiaBrazilSouthAfricabloc

IDFC InternationalDevelopmentFinanceClub

IIF InstituteforInternationalFinance

IIPSA InfrastructureInvestmentProgrammeforSouthAfrica

JICA JapanInternationalCooperationAgency

JBPP Japan-BrazilPartnershipProgram

KfW KfWBankengruppe

MIDA MalaysianInvestmentDevelopmentAuthority

MRI MutualRelianceInitiative

MTPA MalaysianTradePromotionAuthority

NAFIN NacionalFinancieraS.N.C.,I.B.D.

ODA OfficialDevelopmentAssistance

OECD OrganisationofEconomicCooperationandDevelopment

SADCDFRC SouthernAfricanDevelopmentCommunityDevelopmentFinanceResourceCentre

SIBDI SmallIndustriesDevelopmentBankofIndia

SSC South-SouthCooperation

TC TriangularCooperation

TIB TanzanianInvestmentBank

TİKA TurkishCooperationandCoordinationAgency

TSKB IndustrialDevelopmentBankofTurkey

UNIDO UnitedNationsIndustrialDevelopmentOrganisation

UNOSSC UnitedNationsOfficeofSouth-SouthCooperation

ZITPO ZambianInvestmentandTradePromotionAgency

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1.INTRODUCTION11

In2014,themembersoftheInternationalDevelopmentFinanceClubbegantoexploreaframeworkthatbestdefinedanddescribeddevelopmentcooperationwithintheClub.InitiallytheproposalwasbasedontheconceptofTriangularCooperation(TC)thatwouldprovideaplatformfortheconcretedeepeningofcollaborationbetweenmembers.

ThispaperisinformedbyaresearchprocessledbytheDBSAonmembers’understandingof‘South-South’Cooperation(SSC),TCandotherformsofmultilateralcooperation.TheideasinthisDiscussionPaperwilllaythefoundationsofdeepercollaborationbetweenmembersandcouldpotentiallyresultinconcreteprojectsco-financedbyIDFCmembers.

ThepaperexplorestheprocessthatledtotheIDFCmemberscoiningtheterm‘CooperationforDevelopment’(CfD)tomoreaccuratelydescribethekindofcollaborationthattakesplacebetweenmembersandwithnon-members.CooperationforDevelopmentincludescooperationwiththeintentiontohaveasignificantdevelopmentimpactaswellasthedevelopmentofmembersthroughknowledgesharing, capacity building and adoptionof best practice across theClub. The IDFChas since adopted the termCooperation forDevelopment,whichbestdescribestheirmodesofcollaboration.

2.METHODOLOGY

Theleadontheworkstream,theDevelopmentBankofSouthernAfrica,convenedaroundtabletoexplorethefollowingaspectsofTC:

•TheirunderstandingandexperienceofTC;

•Theexistingmodelsforco-financingandwhattheyentail;

•Theaccelerationanddeepeningofeffortstomakeourrelationshipsmoreeffective;

•TheroleoftheprivateandpublicsectorsinTCandtherolecivilsocietyplays,ifany;

•Sourcesoffinanceavailabletosupportsustainabledevelopment(includingbutnot limitedto infrastructurefinance,socialprogrammes,etcetera);

•New financial instruments and investment options that need development tomeet the increased demand for sustainabledevelopment,domesticresourcemobilisationandareducedrelianceonOfficialDevelopmentAid(ODA);and

•Developmentofaframeworkforcooperationthatreliesonmutualreliance,mutuallyagreeddiagnostictools,mutualassessmentreviews,etceteratomakefinancemoreeffectiveandsustainable.

ThreeteleconferencecallswereheldwiththeJapanInternationalCooperationAgency(JICA),GroupeCaissedeDépôtetdeGestion (CDG),MoroccoandNacionalFinanciera,S.N.C(Nafinsa),Mexico.Twodiscussionswereheldwithacademics/think-tankmemberswhoworkonSouth-Southandmultilateralcooperation.

3.DEFINITIONALISSUES3.1Innovativefinancing

ThereisatrendtowardsdefiningandfindinginnovativewaysoffinancingfordevelopmentthatshowshowdevelopmentpartnershavebeguntolookbeyondOfficialDevelopmentAssistance.InnovativeFinancingisonesuchtrend,whichtheWorldBankhasdefinedas

Budgetoutlaysfromestablishedsovereigndonorsorbondsissuedbymultilateralandnationaldevelopmentbanksexclusivelytoachievefundingobjectives.Innovativedevelopmentfinancethereforeinvolvesnon-traditionalapplicationsofsolidarity,PPPandcatalyticmechanismsthat(i)supportfundraisingbytappingnewsourcesandengaginginvestorsbeyondthefinancialdimensionoftransactions,aspartnersandstakeholdersindevelopment;or(ii)deliverfinancialsolutionstodevelopmentproblemsontheground2.

1AspecialthankyoutoBancóldexforcollaborationoncontentandtoallIDFCpartnersfortheirfeedback,whichhascontributedtothedevelopmentofthispaper.

2UNDP,2012.‘InnovativeFinancingforDevelopment:ANewModelforDevelopmentFinance?’p.5.http://www.undp.org/content/dam/undp/library/Poverty%20Reduction/Development%20Cooperation%20and%20Finance/InnovativeFinancing_Web%20ver.pdftoaddressmarketfailuresorscaleupongoingdevelopmentalactivities’

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TheOECDdeterminesthatinnovativefinancingincludes‘mechanismsofraisingfundsorstimulatingactionsinsupportofinternationaldevelopmentthatgobeyondtraditionalspendingapproachesbyeithertheofficialorprivatesectors,suchas:

•Newapproachestopoolingprivateandpublic revenuestreamstoscaleupordevelopactivities for thebenefitofpartnercountries;

•Newrevenuestreams(e.g.anewtax,charge,fee,bondraising,saleproceed,orvoluntarycontributionscheme)earmarkedtodevelopmentalactivitiesonamulti-yearbasis;and,

•Newincentives(financialguarantees,corporatesocialresponsibilityorotherrewardsorrecognition)toaddressmarketfailuresorscaleupongoingdevelopmentalactivities’3.

3.2South-SouthCooperation

TheUnitedNationsOfficeforSouth-SouthCooperationoffersthefollowingdefinitions:

Theterminologyusedtodefinethetypeofengagementdeterminesthekindsof relationshipsentered intoduringcollaborativeinitiatives. Some traditional development partners could argue that the term ‘South-South cooperation’ does not include theirinvolvement in development partnerships and that the focus is shifted towards a geographical construct. In some contexts,South-Southcooperationcouldcarrytheweightofpoliticsandculturalimpolitenessasitdenotesaparticularlevelofpowertotheparticipantsinthatrelationship.

Intheearlystagesofthedeliberations,memberssuggestedthatTCwasamoreeconomicallyandpoliticallyinclusivetermasitis neither attached to geographic origin nor ‘old’ terminology (developed vs developing) but recognizeseachparticipant as anequalpartnerintherelationship.TCallowsforarelationshipthatgoesbeyondthreepartners,asevidencedintheOECDdefinitionbelowbutthroughcurrentuse,thetriangularreferencelimitsthekindsofrelationshipsthatcouldpossiblyemergeincollaborativeinitiatives.

InthediscussionsinformingthisDiscussionPaper,afewalternativeswereposited:

• Mélangecooperation,whichencompassesthedifferentpartnersintherelationship;

• Transformationalcooperation,whichspeakstotheintendeddevelopmentimpactofthecooperation;and,

• Traditionalandemergingcooperation,whichdefinesthenatureofthepartnersengagedinthecollaboration.

What becomes clear is that the terminology is steeped in a particular history, geography and politics. In defining cooperation,thedevelopmentsectorneeds to take intoconsiderationanypriorsensitivity relatedto thosetermsandattempt to forgenewdefinitionsthatmoreaptlydescribethecurrentrelations.

3.2.1NewinitiativesforSSC

AnumberofnewinitiativeshaveemergedaroundSouthSouthCooperation.TheUnitedNationsConferenceonTradeandDevelopment(UNCTAD)co-hostedaTechnicalWorkingGroup (TWG) inGenevawith theNetworkofSouthernThink-tanks (NeST). Thenetworkhas committed itself to ‘generating, systematising, consolidating and sharing knowledge on South−South co-operation (SSC)approachestointernationaldevelopment’.TheGenevaTWGmeeting’sthemeofthemeetingwas‘Defining,measuringandreportingonSouthSouthCooperation’.NeSTprovidesinputsintoglobalandregionaldebatessuchastheAfricanPlatformforDevelopmentEffectiveness(AP-Dev),AfricaVision2063,thePost-2015DevelopmentAgenda,FinancingforDevelopment(FfD),BRICS/IBSAAfricaSummitsandtheGlobalPartnershipforEffectiveDevelopmentCooperation.

ThediscussionsinGenevalookedatthedifferencebetweenSouthSouthDevelopmentCooperation(SDC)andSSCandhaddetaileddiscussionsaboutwhateachapproachwouldentail.In2015,ataNeSTworkshopinSouthAfrica4,participantsgrappledwiththedefinitionandparametersofSSCandSDC.Anumberofdifferentinputswereprovided:

•TheBuenosAiresPlanofAction(1978)definesSSCtoincludetechnicalandeconomiccooperationbetweendevelopingcountries.SCCwouldthenincludetrade,investment,aid,lending,debtrelief,capacitydevelopment,technologyandknowledgetransfer.SSCshouldbeinclusiveandincludegovernmentparticipation.

3OECD(2009)cited,inUNDP2012‘InnovativeFinancingforDevelopment’,p.7.4NeissanAlessandroBesharati,MatshedisoMoilwa,KelebogileKhunouandOrnelaGarelliRios,‘DevelopingaConceptualFrameworkforSouthSouthCooperation’,September2015,foundathttp://www.saiia.org.za/news/welcome-to-nest-africa

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•WhendefiningSDC,themotiveshouldbefordevelopmentpurposesandnotforeconomicprofit.

It is important to note thatmanyparticipants on theNeST forumare fromcivil society and fromgovernment institutions taskedwithmeasuringandreportingonSSC.Somecountrieswereaheadofothersinrelationtothemeasuringandreportingwhileotherswerestillsettingupinstitutionsforthosetwoprocessesandrelyontheircentralbanksornationaltreasurydepartmentstostructurethereports.

InevaluatingSSC,thedefinitionalchallengesariseespeciallyonwhatshouldbeincludedandexcludedinthedefinition;whichprocessescount;howshouldSSCbemeasured;and,howdoverydisparatenationalsystemsbegintoalignandcoalesceintoagenerallyacceptedmeasurementsystem.ForthepurposesoftheIDFC,thememberswereoftheopinionthatSSCandSDCinsufficientlydescribedtheuniverseoftheircooperationwithpartners.

AsecondnotableinitiativeistheUnitedNationsEconomicandSocialCouncil’s(ECOSOC)DevelopmentCooperationForum(DCF)forSouthernprovidersofdevelopmentcooperation.ThesecondmeetingwilltakeplaceinDelhiinFebruary.TheDCFisbasedonrespectfornationalsovereignty;nationalownershipandindependence;equality;non-conditionality;non-interference;andmutualbenefit.TheDCFinformstheFinancingforDevelopmentprocess,contributestotheAddisAbabaActionAgendaandthepost-2015developmentagenda.SomeoftheIDFCcountriesarememberstothisforum.

3.3TriangularCooperation:Adefinition

Triangular Cooperation infers a new kind of relationship between partners. It provides a framework within which partners can shareexperiences,strengths,andmitigateweaknessesandthreats.ItwasevidentintheearlierdebatesinformingthisDiscussionPaperthatTCexistsinvariouscomputationswithinthegrouping,eitherbetweenmembersorbetweenmembersandothercountries.

ItisimportanttonotethatanareaofcooperationthathasnotbeenfocusedonsufficientlyisthatbetweenDevelopmentFinanceInstitutions(DFIs)themselves.DevelopmentbankshaveexpertiseintheirowncountriesthatcouldbetransferredorsharedwithotherDFIs.Themainissuesathandarehowmemberscandeepentheircollaboration,poolresources,andoffersolutionstodevelopmentproblemsthatIDFCmembersfaceorpartnersoutsidetheClub.

TriangularCooperationhasbeendescribedasNorth-North-South,South-South-North,South-South-South,andsoon.TheBogotaStatement,TowardsEffectiveandInclusiveDevelopmentPartnerships5,hasreferredtoitasa‘bridge’betweentheNorth-SouthandSouth-Southmodelsofcooperation.

Anumberofdevelopingcountrieshaveadoptedtriangularcooperationintheirdevelopmentfocus,namely,Argentina,Brazil,Chile,China,Egypt,Indonesia,Malaysia,RepublicofKorea,Singapore,Thailand,TunisiaandTurkey.Interestingly,sevenofthe12countrieslistedaboveareinvolvedintheIDFC,whileMalaysiaisinvolvedviaaprojectwiththeJapanInternationalCooperationAgency(JICA).

TheUNDPdefines TriangularCooperation as ‘Southern-drivenpartnerships between twoormoredeveloping countries, supportedby adevelopedcountry(ies)ormultilateralorganization(s),toimplementdevelopmentcooperationprogrammesandprojects’6.

In2010,theOrganisationofEconomicCooperationandDevelopment’s(OECD)DevelopmentAssistanceCommittee(DAC)initiallydefinedtriangularcooperationas:

PartnershipsbetweenDACdonorsandpivotalcountries(providersofSouth-SouthCooperation)toimplementdevelopmentcooperationprogrammes/projectsinbeneficiarycountries(recipientsofdevelopmentaid)7.

Later,in2012,OECDDACamendedthedefinitionto:

ApartnershipwhereoneormoreprovidersofdevelopmentcooperationsupportSouth-Southcooperation,joiningforceswithdevelopingcountriestofacilitateasharingofknowledgeandexperienceamongallpartnersinvolved8.

If thedefinitionused in the IDFC is limited to theOECDDACand theUN’sconceptionsof triangularcooperation,a largecommunityofdevelopmentpartnerswillbeexcluded.ItisintheinterestsofinclusivitythattheIDFCcreatesitsowndefinitionthatallowsforvariousconfigurationsthatencompasscurrentdevelopmentcooperationexamples.

5http://www.un.org/en/ecosoc/newfunct/pdf/bogota-statement-final.pdf6UNDP,FrequentlyAskedQuestions–South-SouthandTriangularCooperationhttp://www.undp.org/content/dam/undp/library/Poverty%20Reduction/Development%20Cooperation%20and%20Finance/SSC_FAQ%20v1.pdf

7http://www.die-gdi.de/uploads/media/DP_14.2014.pdf(p.36)8Ibid.

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3.4IDFCpartnerships:CooperationforDevelopment

TheobjectiveofthisDiscussionPaperistodefinethekindofcooperationinwhichIDFCmembersengage.ThegeneralconsensusisthatitiscooperativeinnaturewithoneormoreIDFCmemberscooperatingwithdevelopmentpartnersinawaythatextendsknowledgesharing,technicalassistanceandfinancinginwaysthatareinnovativeandworkforthepartners.ThemainargumentisthatitdevelopstheIDFCmember(s)aswellasthenon-IDFCpartnerthroughcooperationinareasofmutualbenefitandinterest.

Triangular Cooperation was seen to be the closest descriptor for the IDFC’s cooperation modalities as is evidenced in their currentpartnershipsfordevelopment.However,itwasagreedthatthedefinitionwaslimitedinthatitdidnotcomprehensivelydescribetheentiregamutofengagementsamongIDFCmembers.

ForthepurposesofthisIDFCinitiativerelatedtodeepeningcooperationwithintheClub,theterm‘CooperationforDevelopment’(CfD)hasbeencoined.TheIDFCcooperatesintheareasofknowledgesharing,capacitybuildingandtechnicalsupport.Thesepartnershipsarebasedonsharingknowledge,experiencesandbestpracticesamongmembersformutualbenefitorforthebenefitofadditionalpartieswhomightbemembers.

Thecooperationcanbeasingleeventcollaborationwithinaparticularsector,forexample,energygeneration,oramultiyearprogrammeacrossanumberofsectors.FortheIDFC,CooperationforDevelopment(CfD)indicatesaparticularkindofpartnershipbetweenmembersand/orthirdpartieswiththeobjectiveofdeepeningdevelopmentimpactandforgingstrongerpartnershipswithlike-mindedinstitutions.

4.WHYDEEPERCOOPERATION?TheThirdInternationalConferenceonFinancingforDevelopment(FFD3)washeldinEthiopiainJuly2015underthetheme‘TimeforGlobalAction’.EmergingfromtheFFD3wastheAddisAbabaActionAgenda(AAAA)thatrecognizedthechallengesfacingtheglobaleconomyandhumandevelopment.TheAAAAcommitstodeliveringonsocialprotectionandessentialpublicservices;scalingupeffortstoendhungerandmalnutrition;promoting inclusiveandsustainable industrialization;generatingfullandproductiveemploymentanddecentworkforall; protectingecosystems; andpromotingpeaceful and inclusive societies. To achieve theSustainableDevelopmentGoals,multilateraldevelopmentbanks(MDBs),DevelopmentBanks,countries,financialinstitutionsanddevelopmentagencieswouldneedtoworktogetherwithcivilsocietyandtheprivatesectortoensurethatsufficientfundsareraised.Thedevelopmentimpactoffinancewillbecomeintegraltothesuccessoffinancingeffortsasfinanceismorecarefullyinvestedinstrategicprojects;asdomesticdemandsarebeginningtoplacepressureoninternationalinvestments;asfinancehastostretchfurtherthanbeforeandbemoreeffective,efficientandsuccessfulthaninthepast.Forthisreason,cooperationandstrategicpartnershipswillbeimportanttodrivefuturefinancingfordevelopment.

Duetothegrandscaleneedfordevelopment,theMDBscommittedtoextendmorethan$400billionoverthenextthreeyearstowardsfinancingtheSDGs.Worldinfrastructuregapsareestimatedtobearound$1trillionperyear.ItisimportanttoharnessallsourcesoffinancetomeettheSDGsandallotherdevelopmentneeds,includingsocialandeconomicinfrastructure,andsocialprogrammes.Inlightofthis,newmodelsofcooperationhavetobesought,developedandpracticedinthenextperiodofdevelopment.

The global financial crisis, the Paris Declaration, BusanPartnershipAgreement and increasing domestic demands on countries call foralternativemethodsof resourcemobilisation and innovativefinancing for development. South-SouthCooperation (SSC) and TCprovideopportunitiestopoolresourcesinpriorityareas,sharehumanresourcesandskillsandbestpracticeamongstIDFCmembers.In2011,theUNGeneralAssemblyhighlighted‘theimportanceofscalinguppresentinitiativesanddevelopingnewmechanisms’9todealwiththegrowingneedfordevelopmentfinance.Alltheseopportunityspacesforcollaborationreducecostsandensurethatthesamelevelofdevelopmenteffectivenessandsupportareupheld,despitenarrowedfiscalspaces.

TheexistingexperienceswithSSCandTClimittheengagementstotechnicaltransfersandknowledgesharingpractices.ContinueddemandsonDFIscreateanimperativethattheinstitutionsworksmarter,moreeffectivelyandproduceahigherdevelopmentimpactthroughtheirworkwithpartners.

The IDFCmembers recognize thata triangular relationship is notoneparticular configurationof cooperationbut could involvevariouspartnerships. It is necessary to emphasise that members believe that lessons could be gleaned from the recipients of developmentcooperationaswellastheotherpartners.Therelationshipisthereforeonebasedonsharing,learningandbuildingexpertiseandknowledge.The example that comes tomind isMozambique’s sharing of lessons learned fromBrazilwithMalawi, or theDBSA’s expertise in fundmanagementwithotherDFIsinAfrica.Theseexampleswillbeexpandeduponinthenextsection.

9UNDP,2012.‘InnovativeFinancingforDevelopment:ANewModelforDevelopmentFinance?’p.5.http://www.undp.org/content/dam/undp/library/Poverty%20Reduction/Development%20Cooperation%20and%20Finance/InnovativeFinancing_Web%20ver.pdf

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InapaperonSouth-SouthandTriangularCooperation,AkihikoTanakapositsthatSSCandTChavearoletoplayparticularlyinregionalorcross-borderdevelopmentprogrammesandcollaborationastheyofferopportunitiesformutuallearningandknowledgesharingandareeffectiveinmobilizingskillsfromacrosstheworld.10

TheverysuccessoftheIDFCillustratesaparadigmshiftfromthetraditionalnotionsofdevelopmentcooperationtoonewherenationalandregionaldevelopmentfinanceinstitutionsfromdevelopingandemergingcountriesplayinganincreasingroleinthemobilisation,channelingandimplementationofresources.

5.LESSONSLEARNEDTHROUGHTRIANGULARCOOPERATIONExperienceswithSouth-SouthCooperationandTriangularCooperationarenumerous.Thissectionservestooutlineonlyafewtoprovidepointsofdiscussionfortheproposalsattheendofthisdocument.

Ina2008article,NageshKumarexploredanewparadigmindevelopmentcooperationandhighlightedsix‘appropriate’reasonsforSSCandTC:

•Developing countries share similar structural characteristics such as abundance in labour and relative capital scarcity thereforedevelopingcountrysolutionswilltakethosefactorsintoconsideration;

•Technologicalsolutionsarefromenvironmentsthathaverelativelypoorinfrastructurethereforeparticularsolutionswillbedevelopedforthoseenvirons;

•Developingcountryexpertisewillbeattunedtogeo-climaticconditionsthereforeagriculturalsolutionswillbetailoredtothoseclimes;

•Thedevelopmentoftechnologiesandexpertisewillbeattherightscaletoaddressthesizeofmarketsindevelopingeconomies;

•Technologiesandexpertiseislikelytobecosteffectiveinviewoflowincomeconsumersindevelopingmarkets;and,

•TCcanachievemuchgreatereffectivenessperunitofresourcesspentcomparedtotraditionalNorth-Southdevelopmentassistancerelationships.11

KumaralsonotesthatTCwillcontinuetoexpandbecauseof traditionalandemergingdevelopmentpartners’strategiestoexpand intodevelopingcountries.ChinaandIndiahaveexpressedan interesttoexpandtheirbusinesswithAfrica,whileemergingmarketssuchasMalaysia,Turkey,theRepublicofKoreaandothershavealsodeepenedtheirrelationshipswithotherGlobalSouthpartners.

The article covers different sectors of cooperation ranging from infrastructure to training, to trade facilitation. Kumar’s empiricalevidencehighlightstheSSCinSoftwareTechnology(SSC-ST)asanexampleofhowSSCandTCcouldbeimplementedamongpartners.OnerecommendationKumarmakesfordevelopmentfinanceinstitutionsistogivepreferencetoprocurementfromGlobalSouthsuppliersbyeitherhavingrotationalbiddingbysuppliersorbyreservingacertainproportionofprocurementfromSouthernsupplierstodeliveryinother developing countries.12Thiswouldprovetobeanadditionalformofassistancetodevelopsouthernvaluechainsleadingtoeconomicdevelopment in those countries.

Other forms of TC do exist that have also combined innovative forms of financing for development. These include green bonds, stateguarantees,PPPs, taxes,debt-based instruments,carbon taxes,financial transaction taxes, IMF’sSpecialDrawingRightsandSolidarityTobaccoContributions.Thelatterfourarenewinitiativeswhilepartnershaveinstitutedothersandpracticethosemodalitiestovaryingdegrees.13

Innovative financing and cooperationmodalities could produce research and knowledge sharing among IDFCmembers. TheUNDP callsformoreworkatcountrylevel,‘toexplorecountrylevelperspectivesoftheinnovativemechanismsimplementedsofar–bothpositiveandnegative’.14ThiscallcouldbeansweredbytheIDFCmembersasthereisarichhistoryofcollaborationwithintheClubbuttherewerestillopportunitiestoandacommitmenttoexplorenewmodalitiesofcooperation.ThenextsectionlooksatexistingexperiencesofIDFCmembers.

6.IDFCEXPERIENCESWITHSOUTHSOUTHAND/ORTRIANGULARCOOPERATIONThissection looksateach institution individuallyas theyrespondedto thequestionnaire.AnnexureAprovidesamoredetailedoutlineofcooperationwithineachinstitutionandbetweentheirinstitutionalpartners.ThissectionusestheTriangularCooperationratherthanCooperationforDevelopmentbecausetheinformationwasgatheredpriortotheClub’sdecisiontoadopttheCfDframework.

10http://jica-ri.jica.go.jp/publication/assets/1_PartI-Chapter0.pdfFullpublicationavailableathttp://jica-ri.jica.go.jp/publication/booksandreports/scaling_up_south-south_and_triangular_cooperation.html

11NageshKumar,2008.South-SouthandTriangularCooperationinAsia-Pacific:TowardsaNewParadigminDevelopmentCooperation’inResearchandInformationSystemforDevelopingCountries,RIS-DP#45,pp.4–5.http://www.aideffectiveness.org/media/k2/attachments/dp145_pap_1.pdf

12Kumar,2008,p.4513UNDP,2012.http://www.undp.org/content/dam/undp/library/Poverty%20Reduction/Development%20Cooperation%20and%20Finance/

InnovativeFinancing_Web%20ver.pdf14Ibid.p.40.

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6.1Bancóldex(Colombia)

Bancóldex’ssharinginitiativesarenotscheduledbutdevelopuponspecificrequestsfromcurrentIDFCpartners,governmentswithintheregionandnon-IDFCmemberswhoareawareofBancóldex’sstrengthsandexpertise.Theyshareknowledgethroughmultilateralgroups,governmentrequests,bilateralinitiatives,intraregionaltechnicalcooperationandinstitutionalisedsharingprogrammes.BancóldexisoneofthemoreexperiencedTCmembersoftheIDFC(alongwithJICA)andhasextensiveexpertiseinknowledgesharingandcapacitybuildingwithintheregionandwithotherpartners.

6.2CAF(LatinAmerica)

CAFcooperateswithIDFCmembersandotherdevelopmentbanksandinstitutionsinavarietyofways,includingknowledgesharing,capacitybuildinginitiatives,networkingactivities,inter-regionalforumsandevents,jointpolicyresearch,syndicatedloans,co-financing,refinancing,guarantees,grantsandtechnicalassistance.

Examplesofcooperationwithpartnersincludebutarenotlimitedto:

CAF-KfW:

CAFandKfWhaveworkedtogethertowardthedevelopmentoftheLACregionformorethan30years(since1977).Currently,CAFhas6creditfacilitieswithKfWforatotalofUSD844.10MM.ThiscooperationhashelpedfinanceprojectsinPeru,Panama,Uruguay,Ecuador,Brazil,Venezuela,DominicanRep.,Mexico,ColombiaandBolivia,insectorslikeinfrastructure,energy,climatechange,transport,andwaterandsanitation.

Afewprojectexamples:

-MassiveTransportProjectsinPeru:USD140M

-MetroofPanama:USD110M

-WindpowerprojectinMexico:USD20M

-InfrastructureinDominicanRep.:USD40M

-HydroelectricProjectinVenezuela:USD50M

CAF-AFD:

CAFsigneditsfirstcreditfacilitywithAFDin2011,forUSD260MM,tofinanceurbantransport,energy,waterandwastewaterprojectsinBrazil,Colombia,DominicanRep.andMexico.CAFandAFDarecurrentlyclosingasecondcreditfacilityforEUR100MMtofinanceclimatechangemitigationandadaptation,urbandevelopment,massive/urbantransport,andwaterandsanitationprojectsinColombia,DominicanRep.,Peru,EcuadorandBolivia.

Afewprojectexamples:

-EnergyinBrazil:USD65M

-TransportinBrazil:USD20M

-InfrastructureinBrazil:USD47M

-WaterandSanitationinBrazil:USD25M

-UrbanTransportinColombia:USD70M

-UrbanDevelopmentinDominicanRep.:USD33M

CAFhascooperationagreementscoveringarangeofactivities,withAFD,KfW,VEB,BNDES,CaribbeanDevelopmentBank,CentralAmericanBankforEconomicIntegration(CABEI),AgenciaEspañoladeCooperaciónInternacionalparaDesarrollo(AECID),BelgianInvestmentCompanyforDevelopingCountries(BIO),NetherlandsDevelopmentFinanceCompany(FMO),ItalianMinistryofForeignAffairs,SimestItalia,EuropeanInvestmentBank(EIB),AsianDevelopmentBank(ADB),ChinaEximBank,JapanBankforInternationalCooperation(JBIC),OPECFundforInternationalDevelopment(OFID),EximbankofIndia,EximThailand,InternationalEnterprise(IE)Singapore,KoreanInstituteforInternationalEconomicPolicy(KIEP),KoreaDevelopmentBank,KoreaEximBank,ExportDevelopmentCanada(EDC),USTradeandDevelopmentAgency(USTDA),andAvinaFoundation,amongothers.

6.3JICA(Japan)

TheJapanInternationalCooperationAgency(JICA)hasbeenengagedinTriangularCooperationforover30years,andhasdevelopedmanysuccessfulpracticesinthisfield.Forexample,JICAhasbroughttogethertheZambianInvestmentandTradePromotionAgencywiththeMalaysianInvestmentDevelopmentAuthorityandtheMalaysianTradePromotionAuthoritytoexchangelessonslearntinandideasfromMalaysiathroughtechnicaltransfertoZambia.

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AsecondexampleisthecollaborationwithJICA,BrazilandMozambiqueintheagriculturalsectorthroughtheJapan-BrazilPartnershipProgram(JBPP),whereJICAhasfacilitatedthetransferofBrazil’sexpertiseinagriculturetoaLusophoneAfricancountrywithagrowingagriculturalsector.JICAis,infact,aleaderinSSCandTC(seelinksbelow)andhasproducedanumberofresearchpapersonthetopicinadditiontoimplementationofSSCandTCprogrammesontheground.15

In2009, theAfricanDevelopmentBank,JICAand theExport-ImportBankofKoreaagreed toco-finance theconstructionof350kmofroadandrelatedactivitiesinMozambiquefromNampulatoCuambatotalling5.978billionyen.Theprojectwasalsothefirstco-financedJapan-KoreaODAproject.16

6.4CDGGroup(Morocco)

TheCaissedeDépôtetdeGestion(CDG)Groupisafinancialinstitutionmanaginglong-termsavingsinMorocco.Theirinstitutionalexperiencewithcooperationhaspredominantlybeenonabilateralbasisforknowledgesharing;institutionalcapacitybuilding;jointventuresforskillstransfer;andcooperationinindustrialinitiatives.CDGhasalsoconcentratedtheirworkinfrancophoneAfrica,whichcapitalisesonasharedlanguageandsimilarculturesandknowledgesystemscommonamongtheirclients.

6.5EIB,KfWandAFD(MutualRelianceInitiative)

OneexistingexampleoffinancialcollaborationwithintheIDFCistheMutualRelianceInitiative(MRI)establishedbytheEuropeanInvestmentBank(EIB),KfWBankengruppe(KfW)andAgenceFrançaisedeDéveloppement(AFD).

Theinstitutionsaresimilarinframeworkandoperatefromthesameregionalbase,namelyEurope.TheirinterestsconvergeintheirAfricastrategies, whichmake it easier for the identification of common interests, agreement on project criteria, monitoring and evaluationresponsibilitiesandotherareasofcooperationthatdonotrequirecase-by-caseboardapproval.TheEIBalsoworksacross28memberstates,whiletheAFDandKfWbelongtothetwobiggestEuropeanUnion(EU)memberstates.TheagreementwasfashionedaftertheParisDeclarationcalledfortheharmonizationandstreamliningofaid.

Theconsortiumhasregularmeetingstoshareexperiencesandbestpractice.Practicalneedsoftheprojectgovernthekindsofinstitutionalarrangementsintowhichthemembersenter,forexample,whotheleaderoftheprojectis,whowillfinanceandoverseeduediligenceandfeasibilitystudies,etcetera.

AconcreteexampleoftheoperationsoftheMRIisevidentintheInfrastructureInvestmentProgrammeforSouthAfrica(IIPSA)wheretheDBSAmanagesthefundprovidedthroughtheirrelationshipwiththeEuropeanUnionforthedevelopmentofinfrastructureinSouthAfricaandtherestofAfrica.TheDBSAhasbeenappointedasmanageroftheIIPSAduetoitsextensiveexpertiseinprogrammemanagementparticularlythemanagementofpartnerfunds.

6.6BNDES(Brazil)

InadditiontoBrazil’striangularcooperationwithJICA,thecountryhastriangularrelationsinthebiofuelsectorwithIndiaandSouthAfricaasmembersofIBSA;withMercosurmembersinanagreementtocooperateinthebiofuelssectorandproductiontechnologies;withtheAsiaPacificEconomicCooperationBiofuelsTaskforce;UNIDOandtheAfricanUnion;and,theEUandAfricaonAgriculture.Brazil’sexperiencehasbeenintechnicalandknowledgetransfer,institutionalcapacityandbuildingasoneoftheleadersinthebiofuelsector.TheEUandtheUnitedStatesofAmericahavebeenbroughtintofacilitatetriangularcooperationwiththeassistanceofBrazil.

6.7TSKB(Turkey)

The Industrial Development Bank of Turkey and Germany’s Federal Ministry for Economic Cooperation and Development (BMZ) haveenteredintoatriangularrelationshiptopromotedevelopmenteffectiveness,partnershipsandfoster‘South-Southcooperation,regionaldevelopment,dialogueandnetworking’17.TheDeutscheGesellschaftfürInternationaleZusammenarbeit(GIZ)establishedanofficeinAnkarato initiate cooperationprojects and to advise TİKAon instruments andmethodsof development cooperation. Todate, the relationshiphasyettoidentifyprojectsforco-financing.GermanyhasselectedTurkeyasaTCpartnerbecauseofthelatter’sstatusasanemergingdevelopmentpartneroran‘anchorcountry’18.Throughthisbilateralrelationship,GermanyandTurkeycouldexpandtheirrelationshipintotheAdriaticregionorintootherdevelopingcountrieselsewhere.ThisrelationshipisevidenceofthepotentialofdevelopinganexistingbilateralrelationshipintoTC.

15http://jica-ri.jica.go.jp/publication/booksandreports/japans_triangular_cooperation_mechanism_with_a_focus_on_jicas_activities.htmlandhttp://jica-ri.jica.go.jp/publication/booksandreports/tackling_global_challenges_through_triangular_cooperationachieving_sustainable_development_and_eradi.html

16http://www.jica.go.jp/english/news/press/2009/100311_01.html 17http://www.die-gdi.de/uploads/media/DP_14.2014.pdf(p.41) 18http://www.die-gdi.de/uploads/media/DP_14.2014.pdf(p.43)

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TSKBisnotadeposittakinginstitutionthereforereliesmainlyonfundsprovidedbyDFIs.Theshareoffundsprovidedbysuchmultilateralfundingagreementsconsistsofapproximately72%ofthetotal(outstanding)financingoftheBankasoftoday.Amongthe10fundproviderDFIs,twoareIDFCmembers.TSKBhasawell-establishedrelationshipwithKfWandAFD.TheBankhassignedninecreditlineswithKfWsince2002andfourcreditlineswithAFDsince2005.Additionally,TSKBandChinaDevelopmentBank(CDB)aredevelopingtheirbilateralrelationsinrespectofanewcreditline.

Inrecentyears,TSKBhasreceivedtechnicalassistance(TA)fromDFIsontopicssuchasindustrialpollutionabatement,energyefficiency,renewable energy andetcetera. TheBankestablished its EnvironmentalManagement System (EMS) as anoutcomeof a TAprogrammeprovidedbyKfW.

TSKBandKfWhavestartedaconcurrentstaffexchangeprogrammethisyear.TSKBwillbeattendingtheGuestObserverCoursehostedbytheKoreanDevelopmentBank.

TheBankparticipatedintheBRICSSCOFinancialForumandtheSt.PetersburgEconomicForum,bothhostedbyVnesheconombank(VEB).

TSKBisalsoamemberoftheLong-termInvestorsClub.19

6.8DBSA(SouthAfrica)

TheDBSAhaspursuedcooperationthrough‘smartpartnerships’asastrategicthrustofitsbusiness.ThistypeoftriangularcooperationhasbeenappliedinthepursuitofintermediariesandlocalpartnersincountrieswheretheDBSAhassignificantoperations.SuchtriangularcooperationaimstobuildthecapacityoflocalDFIswithintheregionfundingdeploymentofexpertiseandtransferofskillstoDFIstoensuresustainabilityofthe interventions.FundsfromtheKfWcredit linewereusedtofinanceaprogrammewithinSADCDevelopmentFinanceResourceCentre(DFRC),which,inturn,wasusedtofinancecapacitybuildingwithinnationalDFIs,suchastheTanzanianInvestmentBank(TIB).

6.9CDB(China)

TheChinaDevelopmentBank(CDB)hasnotbeeninlinewithanypolicyspecificallydesignedforpromotingSSC,buthasbeenbroadeningitscollaborationwithforeigngovernments,enterprisesandfinancialinstitutionsinkeyareasofinfrastructure,agriculture,socialsectorsandenergy.20CDBhasbeenbroadening itscollaborationwith foreigngovernment,enterprisesandfinancial institutions inkeyareasofinfrastructure,agriculture,socialsectorsandenergy.Duringtherecentyears,CDBhasmadesignificantprogressintheimplementationofmeasures under themultilateral financial cooperation frameworks of the Shanghai Cooperation Organization Interbank Association,China-ASEAN Interbank Association and BRICS Interbank Cooperation Mechanism. It also promoted the China-Portugal Fund and theChina-AfricaDevelopmentFundasoverseasinvestmentplatform.Asoftheendof2013,thebankhadoutstandingforeigncurrencyloansofUS$250.5billion.

6.10NAFIN(Mexico)

NacionalFinancieraS.N.C., I.B.D. (NAFIN)cooperateswith IDFCandnon-IDFCmembers.The lattergroup includes the IADB,WorldBank,Climate Funds (GEF,CTF), bilateral banks, amongothers by (i) receiving loans and technical cooperation forfinancingpriority projects(renewableenergyandenergyefficiency)and,(ii)sharingknowledge,experienceandbestpractice.

Currently NAFIN has a close relationshipwith KfW, CAF, SIDBI, BNDES, Bancóldex, BCIE and COFIDE. In addition, NAFIN is developing arelationshipwiththeAFDforcollaborationindifferentareas.

InadditiontoIDFC,NAFINisamemberofotherassociationsthatworkontopicsinvolvingSmallandMediumEnterprises(SMEs).NAFINisalsoamemberoftheLatinAmericanAssociationofDevelopmentFinanceInstitutions(ALIDE),InstituteofInternationalFinance(IIF),APECFinancialInstitutionsDealingwithSMEs,andGroupofMontreal.

7.WHITHERTRIANGULARCOOPERATION?7.1UNStrategicPlan2014-2017

TheUNOSSC’sevaluationofSSCandTC,inpreparationfortheir2014–2017StrategicPlancalledforthefollowing:

•theneedtotranslateshort-term,immediatebenefitsintolong-termsustainableresultsbasedoninnovationfromSouthernstakeholders;

•greatervoiceandparticipationonthepartofparticipantsthroughspecifictoolsandoperationalguidance;

19http://www.ltic.org20http://cdb.com.cn

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•strongerandmorerobustfinancingcommitmentsonthepartofrelevantstakeholdersandpartners;and,

•astrongerreportingframeworkandmechanismstosupportSSCandtriangularcooperationattheregionalandcountrylevels.

The2014–2017StrategicPlanOutcome3outlinestheendresultwhere‘innovativeSouth-South,triangularandpublic-privatepartnershipsandfundingmodalitiesmarshalfinancialandin-kindresourcesthatsupportthescalingupofthedevelopmentimpactofSouthernsolutionsinmeetingtheinternationallyagreeddevelopmentgoals,includingtheMillenniumDevelopmentGoals’.21

TheIDFCshouldgobeyondknowledgesharing,capacitybuildingandinstitutionalsupportandbegintoengageonsupportingthefinancingofprojectsthroughDFIinstrumentsthatareatthedisposaloftheIDFCmembers.OftheexamplesofIDFCTCofferedabove,theMRIistheonlyrelationshipthatprovidesco-financingforprojectimplementation.

InordertomovebeyondtheconventionalconceptionsofTC,newsystemswillneedtobedeveloped,newwaysofevaluatingandselectingprojectsandmoreespecially,newwaysofworkingtogetherasmembersoftheIDFCwillneedtobedetermined.Ratherthanconcentrateonprovidingassistancetothe‘host’countryoftheproject,waysofmeasuringsuccessandchallengesshouldbedevelopedtoensurethattheTCinIDFCcanbereplicatedamongthemembersanddeepenedthroughsuccesses.

7.2Guardingagainstpaternalism

Countriesand institutionsenter into relationships forvarious reasons that range fromself-interest tomutualbenefit. Indefining theircollaboration, members will need to remember the power dynamics that exist within the development financing world, as well as ingeographicandculturalspacesthathaveevolvedovertime.JohnGaventa’s‘powercube’distinguishesbetween:

•Places:global,nationalandlocal;

•Typesofspaces:closed,invited,created;and

•Threefacesofpower:visiblepower,hiddenpowerandinvisiblepower.22

Gaventa’slenswillassistinbringingtogetherverydifferentpartners,inhelpingthemtoidentifymodesofcooperationanddetermineareasofcooperationthroughavaluesystem.Itwillalsobegintoprovidethe‘recipient’or‘host’countrywithagencyinafinancialrelationship.

Theglobal,nationalandlocalspacesoffervaryingopportunitiestoengagewithideasandpractices.Inreferencetothedevelopmentsector,thegloballevelwillofferlessopportunitytoengagebutholdmoreinfluenceatthatlevelratherthanatalocalorevennationallevel.Thedifferentiallevelsofpowerinthelocal,nationalandgloballevelspresentdifferentopportunityspacesforengagementandinfluence.

TheIDFCcomprisesarangeofinstitutionsandcountriesthathaveselectedtocooperateondevelopmentissues.Thiswouldbeanopportunemomenttomovedevelopmentcooperationtobeyondthegeographyofcountriesandthestatusoftheireconomies(traditional/emerging/recipient)toasystemofsharedvalues,mutualbenefitandcleardevelopmentobjectives.

InordertodevelopanIDFCframeworkforCooperationforDevelopment,thisDiscussionPaperunpacksGaventa’slensinthecontextoftheClub.ByrequestingresearchthatmovesbeyondTCandSSC,theIDFChasattemptedtomovebeyondtheglobal,nationalandlocaltolocateitselfwithinapracticeframeworkthatlooksatvaluesratherthangeographicallocation.Theunderstandingisthateachmember’sexperiencecouldcontributetoalargerunderstandingandanewmodelforcooperationamongIDFCmembers.

Secondly,thetypesofspacesGaventareferstoareclosed,invitedorcreatedspaces.Participantsareinvitedintoclosedspaceswherethepowerisconcentratedwithinagroupofmembers.Ifthespaceisconstitutedonthebasisofinvitations,thereisanunderstandingthatsomeoneoragroupholdsthepowertoextendthose invitations.Finallycreatedorclaimedspacesemergethroughtheagencyof lesspowerfulactors.Thesearedynamicandorganicandmemberscomeorleaveandgroupaccordingtotheissueunderdiscussion.

Gaventa’s lens provides the foundation for the partnerships as IDFCmembers deepen their inter-Club cooperation but also invite newmembersintothesharedspacewithintheClub.Theengagementscouldresultinanewsharedspaceinwhichglobalpowerrelationsareshiftedandchanged;wheretheoldtermsofSouthSouthorTriangularCooperation,whichstillinfergeographiclocationandcarrywiththemnotionsof‘developed’and‘developing’or‘emerging’areshiftedbyequalrelationsandsharedlearningsandexperiences.IDFC’snewspacesofcooperationwouldthendemandanewtermanddefinitiontoframewhattheydo,whytheydoitandhowtheydoitwithinthecontextofdeepeningdevelopmentcooperation.

21http://ssc.undp.org/content/dam/ssc/documents/Key%20Policy%20Documents/N1362177.pdf22Gaventa,J.(2006).‘Findingthespacesforchange:Apoweranalysis.’IDSBulletin37(6):23–33citedonhttp://www.capacity.org/capacity/opencms/en/

topics/context_systems-thinking/the-power-of-understanding-power.html

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Finally,Gaventa’sthreefacesofpoweridentifyvisible,hiddenandinvisibleexpressionsofpowerwithinagroup.Visiblepoweristransparentandworkswiththeunderstandingthatthereisaframeworkfordecisionmakingandengagementbetweenmembers.Hiddenpowerassumesthatthereisacabalwithsufficientpowertosettheagendaforthegroup,whileinvisiblepowershapesthepsychologicalandideologicalboundariesofparticipation.

TheIDFC’sframeworkoperatesateachgeographiclevel(local,nationalandglobal)tomaximizethedevelopmentimpactoftheirwork.Through collaborationwith other partners, two institutions or countries could share information and experience that impact the localconditionsdirectly.TheglobalnatureoftheIDFCsetsthesceneforchangetooccuratagloballevelbyintroducingnewmodesofcollaborationfordevelopmentpartners.

ThroughtheIDFC’sframework,theformalrulesandstructuresforengagementwithintheclubarebeingdefinedthroughthisengagementwitheachother.Theprocessisvisible,inclusiveandaddressesthe‘who,howandwhat’ofcooperation.ItwouldbecorrecttoarguethatthehiddenpowerandinvisiblepowerhavelesscredencewithintheClubbecauseofthetransparentprocessthatisbeingdevelopedtodeepenCooperationforDevelopment.

Inearlierdiscussions,IDFCmemberswereconcernedabouttheterminologyusedtodescribetheircollaboration.ThisDiscussionPapergoesalongwaytodemystifyingexistingcooperationbetweenIDFCmembersandhowitisbeingpracticed.

8.ANALYSISToreiterate,theexistingcollaborationwithintheIDFChassupportedtechnology,skillsandknowledgetransferandhasnotbeenevidentinco-financing,beyondafewexamples,includingAFD,KfW,JICA,CAFandBancóldex,amongothers.Thecooperationhasbeenforknowledgesharing,capacitybuildingandtechnologicalassistance.

8.1Modalitiesofcooperation

Inordertodeepenexistingmodelsofcooperation,thereareafewlessonspartnershavehighlighted:

•Bilateralinitiatives:Muchoftheirbilateralortriangularcooperationhasbeenonademandbasiswheretheyareapproachedbypartnersorothercountriestoshareinformationandskillsbasedontheirexpertiseinparticularareasofstudyorbusiness.Throughthesebilateralinitiativestheprogrammesaretailoredtomatchthepartners’needs.Sharingmaybereciprocalaccordingtothecountryandinstitution’slevelsofdevelopment.Themodesofsharinginformationalsovarybasedonthelevelofdetailandcontacttimeneeded,forexample,theinformationcouldbesharedelectronically,throughteleconferencesorlongerin-housetrainingprogrammes.

•Governmentalrequests:requestsforassistanceorcooperationmaycomefromgovernmentsormultilateralbodiesthatrequiretheexpertiseofanIDFCmember.EntitiesmayaskIDFCmemberstohelpthemwithinformationoninstitutionalprocesses,productsandservices,financingmechanisms,developmentprogrammesfordifferentsectorsofthemarket(financialinclusion,entrepreneurship,industrial development, etcetera). Thesedemandscouldbeonceor twiceayearandusually includevisits to theotherpartners’countriesandinstitutions.

•Institutionalrequests:institutionalpartnersrequestforcollaborationorassistancemoreoftenthangovernments.Institutionswhohavedonebusinesswitheachotherinthepastofreachouttothosepartnerstodeepencollaboration.Theinstitution’spriorknowledgeofthestrengthsandexpertiseofthepartnerfacilitatestheformer’srequestforassistanceandinformation.

•Multilateralrequests:multilateralbodieswhohaveworkedcloselywithIDFCmembersandknowtheir institutionalcapabilitiesandoperational levelswilloftenapproachspecificinstitutionsforassistancewithnon-IDFCmembers.Thisshowsthebenefitsofbeinglinked tomultilateral institutionswithin regionsandglobally asexisting relationships candrive the formationof newanddeeperrelations.

8.2Capacitybuilding

Intheareasofcapacitybuildinganumberofmodelshavebeendeveloped.In2006,theUnitedNationsEnvironmentProgramme(UNEP)producedadocumentthat lookedat‘WaystoIncreasetheEffectivenessofCapacityBuildingforSustainableDevelopment’.Theydefinecapacitybuildingas‘initiatingandsustainingaprocessofindividualandorganisationalchangethatcanequallyrefertochangewithinastate,civilsocietyortheprivatesector,aswellasachangeinprocessesthatenhancecooperationbetweendifferentgroupsofsociety’.Thedefinitionlooksatcapacitybuildingasthecatalystforaprocessofchangeandtheimportanceofbuildinginstitutionalcapacity.23

23UNEP,2006.‘WaystoIncreaseEffectivenessofCapacityBuildingforSustainableDevelopment’.DiscussionpaperpresentedattheConcurrentSession18.1TheMarrakechActionPlanandFollow-up,2006IAIAAnnualConference,Stavanger,Norway.http://www.unpei.org/sites/default/files/PDF/institutioncapacity/Ways-to-increase-effectiveness-SD.pdf

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TheUNEPmodelhighlightsthefollowing:

•Identifyingneedsandbuildingonexistingcapacities;

•Beingclearabouttheobjectives;

•Usingawiderangeofcapacitybuildingapproaches;

•Targetingtherightpeopletobuildacriticalmass;

•Makingthetrainingoftrainersapproachwork;and,

•Institutionalisingcapacitybuildingprogrammes.

TheIDFCmemberswhohavedevelopedcapacitybuildingasanexpertisewillhavevariousmanifestationsofeachofthesefactors.BancóldexandJICAhavesignificantexpertise inbuildingcapacityandcouldcontributeto informationsharingwithinthe IDFContheirrespectivemodels.

8.3Knowledgesharing

ThebulkofcollaborationbetweenIDFCmemberstakesplace intherealmofknowledgesharing.Memberswithinthegrouphaveavastexperienceofsharinginformationandexpertise,somemorethanothers.AmodelcouldbedevelopedwithintheIDFCtomakethemostoflessonslearntbyexperiencedmembersandtheneedsmatrixofmemberswhorequireknowledgesharingtodriveinstitutionalexcellence.

AguidethatcouldprovetobeusefulisonedevelopedbytheWorldBankInstitutetitled,‘TheArtofKnowledgeExchange–AResults-focusedPlanningGuideforDevelopmentPractitioners’24,whichassistspartnersto:

•Identifyandassesscapacitydevelopmentneeds

Partnersshould identify thedevelopmentgoalandhow itcouldbeachieved; identify the institutionalcapacitygapsandconsiderthecapacity-developmentobjectives.Carefulidentificationoftheobjectivesoftheexchangewoulddeterminetheframeworkoftheengagement.

•Definetheknowledgeexchange

This activity would identify the ideal participants, consider the capacity outcomes and identify themost appropriate knowledgeproviders.WithintheIDFC,anumberofpartnershavespecificexpertise,whichcouldbeidentifiedthroughtheprocessofdevelopingthetriangularcooperationmodel.

•Designanddevelopanappropriateknowledgeexchangeinitiativethatrespondstothoseneeds

Theknowledgeexchangeinstrumentswouldvaryaccordingtotheknowledgethatisbeingdevelopedorshared,forexample,CommunityofPractice,conferencesandfora,peerconsultation,dialogues,expertvisits,studytoursandtwinningarrangements.Theselectionandsequencingofactivitiescouldoccurthroughactionplanning,brainstorming,e-discussion,groupdiscussion,presentationandsurvey,amongothers.

•Implementtheknowledgeexchangeinitiative

Aftergoingthroughthefirstthreestagesinknowledgeexchange,theinitiativewillhavetobepilotedthroughasharedproject.ThisimplementationcouldoccuronexistingideasfordeepeningknowledgeexchangeandCfDaswellasonnewareasofcollaborationidentifiedbytheIDFCmembers.TheimplementationofideasisimportantasitisthroughthepracticalapplicationofthesestagesthattheIDFCmemberswillidentifygapsandtailortheWorldBank’smodeltosuittheirownmodesofcooperationmoreeffectivelyandefficiently.

•Measureandreporttheresults

Finally,resultsshouldbereportedtomembersoftheIDFCtoshareinformationandtocreateknowledgefortheClubasawhole.AmatrixofmeasurementforresultsbasedcooperationshouldbedevelopedintheCooperationforDevelopmentworkstreamforfutureusebymembers.

8.4Deepenexistingcooperation

TodeepencooperationwithintheIDFC,membershaveapprovedaframeworkforcollaboration.Adatabaseisbeingdevelopedtocapturethefollow,interalia:

•Theexactdetailofcollaborationbetweenmembers;

•Thepartnersinvolvedineachincidentofcollaboration;

•Theareasofexpertiseandexperienceofeachmember;

•Theareasinwhichtheyarewillingtocollaborate;and,

24http://wbi.worldbank.org/wbi/Data/wbi/wbicms/files/drupal-acquia/wbi/The_Art_of_Knowledge_Exchange_revised.pdf

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•Thepossibleareasinwhichtheyneedothermembers’assistance.AnadditionalareaofinformationcouldbearoundtheparticularSustainableDevelopmentGoalssupportedbyeachIDFCmember,asperAfD’sinputataworkshopwiththeDBSAinFebruary2016.

TheproposeddatabaseandframeworkwillbepresentedtothefirstCEO’sSteeringCommitteeMeetingin2016.

Additionalareasofcollaborationcouldincludebutnotbelimitedtothefollowingactivities:

•CompilealistofallmodelsofengagementwithintheIDFCandwiththeirpartners;

•ImproveanddeepenexistingCfDarrangementsintheIDFCacrossthefivestrategicpillars;

•Identifyopportunitiesforadditionalcollaboration;

•Establishanoperationalframeworkthatcouldbetailoredtoeachpartner’sneeds;

•IdentifytherolesandresponsibilitiesofeachmemberinaCfDarrangement;

•Developanevaluationframeworkforpost-implementationassessments;

•Strengtheningownershipoftheprojectbythebeneficiarycountry;

•Determinehowtooperatewithinandacrossdifferentlegalandregulatoryframeworksorfindcommongroundonthoseissues;

•Identifybestpracticeandquickwinstoensurethatthereisimmediateevidenceofsuccesstodrivetheinitiative;

•IdentifyskillsgapswithintheIDFCandwithpartnersandaddressthosegaps;and

•IdentifythesharedvaluesindevelopmentworkacrosstheIDFCandtranslatethoseintoanoperationalframeworkforco-financingthroughCfD.

What should be noted is that there is significant planning that needs to take place before knowledge exchange and capacity buildingprogrammes take place. The IDFC couldmainstream and institutionalise knowledge sharing and capacity building through its pillars ofengagementforeachannualprogramme,forexample,intheareaofsustainabledevelopmentorrenewableenergy.

9.CONCLUSIONThisDiscussionDocumentpresentsafewoptionsfortheIDFCmemberstodeepentheircollaborationparticularlyaroundCooperationforDevelopmentandinnovativefinancingmodalities.Theproposalspresentedareneitherexhaustivenorprescriptive,butprovidememberswithsomegristfortheirthoughtmillsduringtheupcomingmeetinginLima.Itshouldbenotedthatonlyafewmembersrespondedtothequestionnaireinformingthispaper.AfewmembersrespondedbyexplainingthattheydonotengageinSSCoranyformofTCbutinsteadpromoteregionalcooperationintheirareasofactivity.

Finaldefinitionalpoints:theBSTDBexplainedthattheirmembersareallessentiallyemergingmarketsandnotinthegeographicSouthnorcantheyberegardedassuchusingtheolddevelopmenttheoryframework.Also,HBORadvisedthattheycurrentlydonothaveprogramsrelatedtooraimedatSouth-South/TriangularCooperationactivities.

InordertomarktheuniqueIDFCprocess,theClubmembershavemovedawayfromthecommonly-usedtermsofTriangularCooperationandSouthSouthCooperation,towardsanIDFC-specificterm,CooperationforDevelopment,thatcomeswithoutthepriorpoliticalframeworksofdevelopmentfinance,thegeo-politicalpointersinferredintheterm‘SouthSouth’orthenumericalindicatorsinTriangularCooperation.CooperationforDevelopmentaffordstheIDFCanopportunitytodeveloptheirownframeworks,measurementsandmonitoringandevaluationofthecollectivedevelopmentimpactofthegroup.TheIDFCwillcontinuetodevelopthecooperationframeworktocreateanidealplatformonwhichtoportraythedifferentkindsofcooperationwithintheClub.

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10.ANNEXUREA–CURRENTAREASOFCOOPERATION

Areasofcollaboration

Membersinvolved Collaboration Highleveldetails IDFCpartnersectorfocus

CAF

AFD,CDB,JBIC,KfW,NIB,SEK

Long-termloans Providesfinancetolendon to other clients

Areasofmutualbenefit

KfW Creditfacilities CAFandKfWhaveworkedtowardthedevelopmentoftheLACregionformorethan30years.ThiscooperationhashelpedfinanceprojectsinPeru,Panama,Uruguay,Ecuador,Brazil,Venezuela,DominicanRepublic,Mexico,Colombia,Bolivia

Infrastructure,energy,climatechange,transportandwaterandsanitation

AFD Creditfacility CAFreceiveditsfirstcreditfacilityfromtheAFDin2011andcurrentlyisclosingasecondcreditfacility.

Urbantransportenergy,water,wastewaterprojectsClimatechangeUrbandevelopment,massive/urbantransport,waterandsanitationprojects

AFD,CaixadoBrasil,EuropeanCommission-LAIF,FrenchGovernment,OFIDFund,SpanishAgencyforInternationalDevelopment(AECID)

Grants Managinggrantsforprogrammes

Areasofmutualbenefit

AfreximBank,AsianDevelopmentBank,AvinaFoundation,IESingapore,MinistryofForeignAffairsandTrade(RepofKorea),GovernmentoftheUK

Knowledgesharingprogrammes

Collaborateonknowledgesharingplatforms

Areasofmutualinterest

CDG FrancophoneAfricanpartners

Bilateralmainly Jointventuresforskillstransfer,knowledgesharing

Cooperationinindustrialinitiatives

JICA

KfW,AFD,CAF,DBSA,PTA BilateralMOUswithinstitutions

BilateralMOUswithinstitutions to deepen andfocuscollaboration

Commonareasofinterest

AFD,WorldBank,KoreanEXIMBank,ChinaEXIMBank

Knowledgesharing Bilateralannualconsultationsforknowledgesharinginareasofcommoninterestandtoexplorefuturecollaboration


KfW,ADB,WB,AFD,KoreanEDCF

Coordinationmechanism Thesixdevelopmentbanks(JICA,KfW,AFD,WB,ADB,KoreanEDCF)hascreatedacoordinationplatformcalled“SixBanksInitiative”inVietnamformaximizingdevelopmentimpactsandseekingopportunitiesforco-financeprojects.


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JICA

IDFCmembers(KfW,AFD,CAF)andNon-IDFCmembers(MDBs,DFIs,etc.)

Co-finance JICAco-financevariousprojectswithotherfinancialinstitutionsincludingIDFCmembers.

Examples:•ProjectindevelopinggeothermalenergyinOlkaria,KenyawithKfWandAFD

VarioussectorssuchasTransport,Energy,Environment,andClimateChange

SIDBI,COFIDE ODAloan(TwoStepLoan) JICAprovides,throughODAloantorespectivegovernments,fundswithotherfinancialinstitutionsfortheirlocalfinancinginspecificareas.

Examples:•Micro,SmallandMediumEnterprisesEnergySavingProjectwithSIDBI

•EnergyRenovationInfrastructureAssistanceProgramwithCOFIDE

VarioussectorssuchasEnergyefficiency

Non-IDFCmembers Triangularcooperation JICAimplementsTriangularcooperationprojectsforfacilitatingknowledgesharingamongdevelopingcountriesaswellasformakingagreaterdevelopmentimpactusing with Southern knowledge&experience.

Example:•Agricultural

Development in MozambiqueunderpartnershipwithBrazil

•IndustrialDevelopmentinZambiathroughknowledgesharingandtechnicaladvicefromMalaysia

Varioussectors(Agriculture,EconomicDevelopment,Health,Education,etc.)

Bancóldex

Inter-AmericanDevelopmentBank(IDB)members

Technicalassistance,knowledgetransfer

ThroughtheIntraregionaltechnicalcooperation(CT/INTRA),IADBborrowingcountriesprovidetechnicalassistancetoanothercountrytoshareinformationandtechnology.


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Bancóldex

BNDES Knowledgesharing Toidentifyopportunitiesforfinancialcooperation,informationaboutBancóldexoperationsandprocesses

Relatedtoforeigntrade,tradeoperatingroutines,productsandservices.

KoreanSharingProgramme(KSP)

Knowledgesharingandskillsdevelopment

TheKSPhasledtothreeoutcomes:developmentofastrategicpapertoguideBancóldex’sstrategyprocess;shareinformationandskillsdevelopment to support business

StrategicinputsNon-financialsupportmodels Instruments to support businesscompetitiveness

ForumforEastAsia-LatinAmericaCooperation(FEALAC)

Knowledgesharing Bancóldex-iNNpulsaColombiaareorganisingaFinancingInnovationandDynamicEntrepreneurshipForumtosharebi-regionalexperiences

FinancinginnovationandentrepreneurshipDevelopnetworksandconnectionstomaximisecollaborationCreatespacetoidentificationofcooperationandbusinessopportunitiesaroundinnovationandhighimpactentrepreneurship

FederalMinistryofEducationandResearchofGermany

Knowledgesharing Two institutions signed ajointdeclarationinApril2015togenerateknowledgeexchangebetweenpublicandprivateinstitutionsrelatedtoinnovation

BusinessgrowthCompetitivenessInnovation

WorldBank Capacitybuilding WorldBankcontributedtoBancóldexwithcapacitybuildingtosharebestpracticesandknowledge

Impactevaluationmethodologies

JICA Knowledgesharing NominatedBancóldexstafftoparticipateinKnowledgecocreationprogrammesdevelopedinJapantoaddressspecificissues.

CurrentprogrammeisdesignedtoshareexperiencesonExportandInvestmentPromotion.

BNDESIBSA,Mercosur,APEC,UNIDO,EU

Knowledgesharingandskillsdevelopment

LessonslearntinBrazilproduction technologies

Oilandgas,biofuels,agriculture

TSKB

AFD,KfW Creditlines/financingproducts

TSKBhassigned9creditlineswithKfWsince2002and4creditlineswithAFDsince2005.

EnvironmentClimateprotectionHydroandwindpowerplantsMunicipalinfrastructureRenewableenergy,energyefficiencyIndustrialresourceefficiency,sustainabletourism,innovativerenewableenergy

CDB Credit lines Discussionsunderwaytodevelopbilateralrelationsrenewcreditline

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TSKB

KfW Trainingandcapacitybuilding

TSKBandKfWstartedaconcurrentstaffexchangeprogrammein2015.

Skillsdevelopmentandknowledgesharinginareasofmutualbenefit

KoreaDevelopmentBank TSKBwillattendtheGuestObserverCoursehostedbytheKoreanDevelopmentBank

BRICSandShanghaiCooperationOrganisation

Knowledgesharingandregionalintegration

AttendedBRICSandSCOsummitsinUFA–exchangeofknowledgeandeconomicdevelopmentstrategies

Economicblocsandskillsdevelopment

KfW Technicalcooperation TSKBdevelopeditsEnvironmentalManagementSystemincollaborationwithKfW.

Environment

OtherDFIs Cooperatedinareassuchasindustrialpollutionabatement,energyefficiency,renewableenergy

AFD

KfW Co-financing MutualRelianceInitiativetoco-financekeyareasofmutualinterest

Climatechange(waterandsanitation,energy,renewableenergyandtransmission)

JICA Knowledgesharing Provideresearchsupportinareasofmutualinterest

Sustainableurbandevelopment,climatechangeadaptationinsmallislandstates,ruraldevelopmentandfoodsecurity

DBSA AfricaProjectPreparationandStudyFacilityFund(PPSF)

Infrastructure(transport)

CAF Lineofcredit,StudyFacilityFundestablishedandstaffexchange,co-financiers

Sustainableurbandevelopment,waterresourcesmanagementanddecentralisation

KfWandEIB Sharingprojectduediligenceresponsibilities

Mutualrecognitionofotherpartners’procedures;Delegationofmosttaskstothe‘leadfinancier’;Activepartnershipandreciprocity;Decisionmakingandfinance;andContractrestswitheachfinancier.

Co-financingandprojectvalue-chain

OtherIDFCmembers AFDhasrecentlyissuedclimatebonds.ManyIDFCmembersrequestedinformationaboutgreenandclimatebonds.InitialmeetingsbetweentechnicalteamsofAFDandBNDES(forexample).

Climatebonds

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NAFIN

Bancóldex Knowledgesharing NAFINvisitedBancóldextolearnaboutproductsandprocesses

LearnabouttheColombianguaranteeprogramme

SIDBIandCFE(Ecuador) SDBIandCFEvisitedNAFINtolearnaboutproductsandprocesses

Electronicfactoringplatform

BCIE BCIEvisitedNAFINtolearnaboutproductsandprocesses

Factoring,guaranteesandqualityprocessmanagementsystem

COFIDE Meetingheldtoshareexpertiseonproductsandprocesses

Operationoffund-of-fundsandcapitalseedprogrammeandentrepreneurialprogrammework

DevelopmentBankofJamaicaLimited

DBJLvisitedNAFINtolearnaboutprocessesandproducts

Microfinanceandfinancialintermediaries,CreditGuaranteeSystemProgramme,riskmanagement,factoring,amongothers

HongKongMortgageCorporationLimited

NAFINstaffvisitedHKtolearnmoreabouttheirprocesses

Guaranteesandrisks

MexicanSecretariatofEnergy

Co-hostedconference ‘EconomicGrowth,EnergyandSustainableDevelopment’

ALIDE Capacitybuilding Co-hostedworkshop CreditandOperationalRisk

BANDESAL Managerofloans Financepriorityprojects Renewableenergyandenergyefficiency

CAFandIADB Loans DisbursementpartnerforIADBandCAF

Capacitybuildingandresearchonsustainabledevelopmentprojects

KfW Newloansbeingnegotiatedforgeothermal,cogenerationandenergyefficiencyprojects

Renewableandenergyefficiencyprojects

UKDepartmentofEnergyandClimateChange

Financeforsecondphaseofproject

Energyefficiencyproject

DBSA

AFD ProjectPreparationandFeasibilityStudyFund(PPFS)

ProjectpreparationfundforNEPADRegionalIntegrationInfrastructureProgramme

Transport,energy,ICT,waterandsanitation,andPPPpromotion

EIB ProjectDevelopmentandSupportFacility(PDSF)

Preparationofinfrastructureprojects/programmesineastandsouthernAfrica

Transport,energy,ICT,waterandsanitation

EU,AFD,EIB,SouthAfricanNationalTreasury

InfrastructureInvestmentProgrammeforSouthAfrica(IIPSA)

Promotionofessentialinfrastructureinvestments in South AfricaandSADC

Energy,transport,waterandenvironment,ICT,socialservices

SADCSecretariat,EURegionalOfficeandKfW

ProjectPreparationandDevelopmentFacility(PPDF)

PreparationofapprovedprojectsintheSADCInfrastructureMasterPlan

Transport,energy,ICT,waterandsanitation(andtourism)

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DBSA

BRICS Co-financing,knowledgesharing,staffexchange,newproductdevelopment

ExplorewaystodeepenBRICSInterbankCooperationMechanism

Mandatedsectorsofmutualbenefit(transport,ICTs,energy,waterandsanitation)inSouthAfricaandAfrica

JBIC,EIB,AFD,AfDB,KfW Credit lines ToprovidefinancingthroughtheDBSAforinfrastructurefinanceinareasofmutualinterest

Renewableenergy

AFD(phaseI)andAFDB(phaseII)

PanAfricanCapacityBuildingProgramme

CapacitybuildinginAfrica

Infrastructuremanagementanddevelopmentcapacity

KfW,SADCDFRC Capacitybuilding,technicalassistance

Builton‘smartpartnerships’

DFIdevelopmentinSADC

Vnesheconombank Knowledgesharing WeeklongseminarwithVEBtoshareinformationonbusinessandoperationsprocesses,keysectorsandotherareasofinterestwithnon-IDFCpartners(SMEdevelopment)

SMEdevelopmentProcessesandproducts

CDB

SCO,bilateralpartners,BRICS,China-ASEANInterbankAssociation,PortugalandAfrica

Co-financing,skillsdevelopment,knowledgesharing

Providesloansforkeyprojectsdirectlywithpartner,developsfinancialandeconomicmultilateralstructures

infrastructure,agriculture,socialsectorsandenergy

11.ANNEXURE2:NEWAREASFORCFDTheIDFChasidentifiedfivepillarsfortheshort-term:

•Sustainableinfrastructure(CAF)

•Sustainableurbandevelopment(CAF/JICA/AFD)

•Socialandeconomicinclusion

•Energyefficiency

•Renewableenergy

•TriangularCooperation(cross-cuttingissue–DBSA/CDG/Bancóldex)

Inadditiontotheseareas,IDFCmembersarewillingtocollaborateinadditionalareas:

IDFCmember FocusareaTSKB APEXbankingandfinancingofrenewableenergyandenergyefficiencyprojects

AFD Climatechangeandgreenbonds(includingthefivepillars)

NAFIN TriangularcooperationSocialandeconomicinclusion(includinggenderandyouth)

DBSA GreenbondsSyndicationSkillstransferEnergyTransportWaterandsanitationKnowledgesharing

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IDFCmember FocusareaBSTDB Promoteregionalcooperationinmandatedareaofactivitywithmemberswhoareallessentiallyemerging

markets(lessonsforotheremergingmarketpartners?)

Bancóldex InternationalfinancialtradeMSMEssupport(financialandnon-financial)GreenenergyImpactevaluationInnovationandentrepreneurship

JICA ClimatechangeGeothermalplantdevelopmentSustainableurbandevelopmentSupporttofragilecountries

CAF TransportWater&sanitationEnergy(traditionalandrenewables)MSMEsICTsInnovationTradeFinanceHealthEducationPovertyreductionFinancialinclusionUrbandevelopmentRegionalintegrationInstitutionalreformandgovernanceEnvironmentandclimatechangeClimatefinancetrackingharmonisation(withAFD)

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