Scaling Up Co-Financing for Greater Development Impact

As overlapping and compounding crises like fragility, conflict, economic turmoil, food insecurity, and climate change threaten global development, a well-coordinated response among partners is required. Multilateral development banks and other development partners are being called on to maximize the impact of their funding by working together more closely and operating as a system. 

The new Global Collaborative Co-Financing Platform, launched by a coalition of ten multilateral development banks, will strengthen partnerships, promote transparency, and improve coordination, enabling development partners and recipient countries to address global challenges more effectively and efficiently.

“The global financing landscape is becoming more challenging, and it has become clear that tackling the world’s polycrisis requires the concerted effort of the global community,” said Akihiko Nishio, World Bank Vice President for Development Finance. “Co-financing allows us to generate efficiencies and maximize our collective development impact, including in times of crisis.”

The Benefits of Co-Financing 

Collaboration through co-financing has proven to be an effective way to increase development impact, foster strategic alignment on global priorities, and facilitate coordinated flows of financing in line with country priorities. When well executed, co-financing can reduce aid fragmentation, lower transaction costs, help attract concessional financing, and simplify funding arrangements for client countries. 

Furthermore, multiple development partners working together can increase the likelihood that a project will be successfully implemented at scale over a sustained period. These partnerships can also address larger cross-sectoral issues that require multifaceted interventions, which are otherwise difficult to implement when each financier focuses only on their own project.

Launch of the Global Collaborative Co-Financing Platform

The platform, which was launched on April 19 at the 2024 International Monetary Fund-World Bank Spring Meetings, is a pioneering initiative aimed at amplifying the impact of development finance and streamlining processes for recipient countries. It will serve as a convening mechanism for multilateral development banks and other interested co-financiers to identify and discuss co-financing opportunities. Importantly, the platform will complement, rather than replace, existing collaborations at the country level, while empowering multilateral development banks and co-financiers to maximize the efficiency of every development dollar.

The platform consists of a digital component, the Co-Financing Portal, and a convening component, the Co-Financing Forum. The portal—hosted by the World Bank—provides a secure platform for registered co-financiers to view and share project pipelines and identify co-financing opportunities. Shifting from a manual process to a digital tool will increase efficiency and transparency, and make it easier to share information and identify projects for co-financing.

The portal will be complemented by the Co-Financing Forum, which will provide a space for participants to discuss co-financing opportunities, best practices, and common issues, and to support ongoing efforts to coordinate policies to reduce the burden on partner countries. The forum will include semi-annual technical meetings, chaired on a rotating basis by a nominated representative from a participating institution.

Improving coordination to maximize impact

The Global Collaborative Co-Financing Platform responds to calls for a coordinated approach to tackling today’s global challenges. By leveraging partnerships and promoting transparency, the platform will enable development finance institutions, partner agencies, and client countries to address global challenges more effectively and efficiently. 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.

To realize its new vision of creating a world free of poverty on a livable planet, the World Bank is committed to strengthening partnerships to better support countries. The new co-financing platform supports collaboration and coordination that can help create a more resilient and sustainable world. By strengthening partnerships and promoting transparency, the platform will enable development finance institutions, partner agencies, and client countries to address global challenges more effectively and efficiently than ever before.