Multilateral Development Banks

  The African Development Bank
  The Asian Development Bank
  The European Bank for Reconstruction and Development
  The Inter-American Development Bank Group

These banks are characterized by a broad membership, including both borrowing developing countries and developed donor countries, and not limited to member countries from the region of a regional development bank. Each bank has its own independent legal and operational status - but with a similar mandate and a considerable number of joint owners, the MDBs maintain a high level of cooperation.

The MDBs provide financing for development through the following:

• Long-term loans, based on market interest. For funding these loans the MDBs borrow on the international capital markets and re-lend to borrowing governments in developing countries.
• Very long-term loans (often termed credits), with interest well below market interest. These are funded through direct contributions for governments in donor countries.
• Grant financing is also offered by some MDBs, mostly for technical assistance, advisory services or project preparation.

Several other banks and funds that lend to developing countries are also identified as multilateral development institutions, and are often grouped together as other Multilateral Financial Institutions (MFIs). The differ from the MDBs in a more narrow ownership/membership structure or in focusing on special sectors or activities. Among these are:

• The European Commission (EC) and The European Investment Bank (EIB)
  
• International Fund for Agricultural Development (IFAD)
  
• The Islamic Development Bank (IDB)
  
• The Nordic Development Fund (NDF) and The Nordic Investment Bank (NIB)
  
• The OPEC Fund for International Development (OPEC Fund)

A number of Sub-Regional Banks, established for development purposes, are also classified as multilateral banks, as they are owned by a group of countries (typically borrowing members and not donors). Among these are banks such as Corporacion Andina de Fomento (CAF); Caribbean Development Bank (CDB); Central American Bank for Economic Integration (CABEI); East African Development Bank (EADB); West African Development Bank (BOAD).

 

Last updated: June 30, 2003