The EDB has outlined seven key areas for cooperation among multilateral development banks

Almaty. The EDB has proposed a partnership roadmap for MDBs. The Bank's new research “Cooperation of Multilateral Development Banks in Emerging Markets and Developing Countries: Untapped Opportunities” contains seven specific areas for MDB cooperation, ranging from financial resources to regional expertise. According to EDB analysts, this approach will enable MDBs to combine their strengths in order to overcome infrastructure challenges and close investment gaps in developing countries. The formation of strong 'horizontal links' between developing countries, including through cooperation among the MDBs they have established, will play a decisive role in shaping a more sustainable and interconnected global financial architecture.

Today, emerging markets and developing countries (EMDCs) face widening financing gaps and escalating infrastructure needs. To reach the Sustainable Development Goals (SDGs) by 2030, developing countries require an estimated $4 trillion annually, nearly double the financing gap assessed in 2015. It is also estimated that infrastructure development will require $1.8 trillion, $1.3 trillion of which is needed for road transport. This highlights the importance of coordinated investment efforts.

EMDCs are entering a new phase of economic collaboration. While traditionally reliant on linkages with advanced economies in trade, investment, and finance, EMDCs are increasingly recognizing the need to cultivate strong ‘horizontal linkages’ among themselves. This shift marks an important milestone for global development, enabling countries to better pool financial resources, knowledge, and expertise to address shared challenges and accelerate sustainable growth.

Multilateral Development Banks (MDBs) play a central role in enabling this coordination. Notably, MDBs established by EMDCs—often referred to as borrower-led MDBs—have expanded significantly over the past decade. Between 2012 and 2024, their balance-sheet lending volumes tripled, reaching approximately $150 billion. These institutions bring a unique value proposition: deep regional knowledge, close ties with member governments, operational flexibility, and the ability to respond quickly to local challenges.

However, despite their strengths, borrower-led MDBs typically possess smaller capital base and lower credit ratings, which limit their capacity to raise affordable long-term financing. Strengthening cooperation—both horizontally among borrower-led MDBs and vertically between smaller and larger global MDBs—can unlock substantial development benefits.

Nikolai Podguzov, EDB Chairman of the Board, noted: "Global development banks bring the big picture, while subregional banks provide deep local insight. Central Asia shows how powerful this combination could be. The region faces a $50+ billion annual investment gap. At the same time, MDBs have collectively supplied $10 billion per year on average over the past five years. We should contribute to closing this gap through the combination of capital increases and stronger cooperation among MDBs."

New research identifies seven areas in which MDB collaboration can significantly reduce costs, improve project effectiveness, and accelerate development outcomes in EMDCs:

1.    Mobilizing Capital. Joint participation enables MDBs to launch large-scale infrastructure projects that are otherwise unattainable due to capital and risk constraints. Instruments such as Exposure Exchange Agreements help distribute risk across institutions—an innovation first implemented in 2015, covering $6.5 billion across AfDB, IDB, and IBRD.

2.    Capital Markets. Through equity participation, investments in each other’s bonds, and collaboration on climate-related and sustainability-linked instruments, stronger MDB partnerships can expand regional capital markets and improve borrowing terms for lower-rated institutions.

3.    Local-Currency financing. Lending in local currencies mitigates exchange-rate risks that can threaten borrower stability. Larger MDBs can provide hard-currency financing to smaller MDBs, which then on-lend in local currency while hedging exposure.

4.    Project Expertise. Cooperation improves project preparation, long-term structuring, risk management, and the implementation of public-private partnerships (PPPs). Cross-regional collaboration also facilitates knowledge transfer and the adoption of best practices.

5.    Pooling Knowledge. MDBs possess extensive analytical capacity across regional and thematic areas. Joint research programs, shared data platforms, and training centers enhance decision-making and support more effective development strategies.

6.    Technical Assistance. Pooling resources by MDBs for technical assistance strengthens project design quality and supports early-stage development, paving the way for pipeline expansion and future joint investments.

7.    Cross-Border development Projects. MDBs can act as catalysts for regional integration by coordinating cross-border investments, facilitating feasibility studies, mitigating political risks, and anchoring private-sector participation.

Evgeny Vinokurov, EDB Chief Economist, adds: "Increased collaboration in these seven areas will provide developing countries with additional benefits, including more funding and greater alignment with national objectives. The G20 aims to expand the MDB loan capacity dramatically. Cooperation among MDBs is a necessary prerequisite.”

EDB analysts examined the sectors in which cooperation among MDBs could be most productive for developing countries.

The report and research materials are available on the EDB’s website.

Additional Information:

The Eurasian Development Bank (EDB) is a multilateral development bank investing in Eurasia. For more than 19 years, the Bank has worked to strengthen and expand economic ties and foster comprehensive development in its member countries. By July 2025, the EDB’s cumulative portfolio comprised 319 projects with a total investment of US $19.1 billion. The portfolio consists principally of projects with an integration effect in transport infrastructure, digital systems, green energy, agriculture, manufacturing and mechanical engineering. The Bank adheres to the UN Sustainable Development Goals and ESG principles in its operations. The EDB is implementing three mega-projects as part of its 2022–2026 Strategy: the Central Asian Water and Energy Complex, the Eurasian Transport Network and the Eurasian Agricultural Goods Distribution System.

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