The World Bank and the Asian Development Bank (ADB) have signed a landmark agreement to streamline development finance by introducing a single set of conditions for co-financed projects.

Under the Full Mutual Reliance Framework (FMRF), borrowers will follow either ADB or World Bank policies across all project stages, from design to evaluation. According to a World Bank press release, the initiative aims to cut costs, reduce processing time, and align policies to improve global development financing.

The framework responds to international calls, including from the G20, for multilateral development banks (MDBs) to enhance collaboration for greater impact.

ADB President Masatsugu Asakawa emphasized that the agreement would “deliver lasting benefits to communities and economies across Asia and the Pacific.” World Bank President Ajay Banga also underscored the importance of cooperation in development financing.

The FMRF will be piloted in selected public sector projects over four years from 2025, allowing time to refine operational strategies. It builds on previous efforts, such as the 2018 Procurement Framework Agreement, incorporating lessons from borrower countries and other stakeholders.

Under the new system, one institution will act as the “Lead Lender”, managing project oversight, while the other, the “Trail Lender”, will offer support but have no fiduciary responsibilities.