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BP 14.20 - Cofinancing

These policies were prepared for use by World Bank staff and are not necessarily a complete treatment of the subject.
BP 14.20
March, 1995
Note: OP/BP 14.20, Cofinancing, were revised on April 2013 to take into account the recommendations in “Investment Lending Reform: Modernizing and Consolidating Operational Policies and Procedures” (R2012-0204 [IDA/R2012-0248]) on October 25, 2012, which were approved by the Executive Directors on October 25, 2012. As a result of these recommendations, OP/BP 10.00, Investment Project Financing, have been updated, and OP/BP 12.00, Disbursement, have been retired (among other changes). This BP has consequently been updated to reflect these changes, as well as to reflect the updated title of the Bank’s policy on access to information.

Questions should be addressed to the Director, Global Partnership and Trust Fund Operations.

Revised April 2013


1. For an official cofinancier with which the Bank1  expects a sustained relationship, the Bank enters into a cofinancing framework agreement, which specifies (a) the terms and conditions of the cofinancier's participation in Bank-assisted projects and other activities; (b) project selection, appraisal, implementation, and supervision arrangements; (c) the modalities for mutual cooperation and consultation; and (d) the fees to be paid to the Bank for services provided. Such an agreement is prepared by the Legal Department (LEG), negotiated on the Bank's behalf by LEG and the Global Partnership and Trust Fund Operations (CFPTO), and cleared with the Controller's Department.

2. The recipient country identifies its potential cofinancing needs and possible cofinanciers for each project. Drawing on specific discussions with the recipient country, country department staff quantify at the project level the country's potential cofinancing needs. The departmental cofinancing coordinators ensure that information on cofinancing is entered in the Bank's Cost Accounting System2   and updated throughout project processing. CAP consolidates this information Bankwide and transmits it to potential cofinanciers.

Identification to Board Approval

3. Detailed procedures for processing cofinanced projects involving trust funds are set out in OP/BP 14.40, Trust Funds, as well as OP/BP 10.00, Investment Project Financing.

4. For all projects, early during project preparation, Bank and recipient staff assess the need for cofinancing, determine the strategy for securing financing or otherwise completing the project financing plan, and consider suitable sources and terms, bearing in mind the recipient's creditworthiness. In drafting a tentative financing plan, Bank and recipient or implementing agency staff work to match possible financing to project needs and identify, inter alia, components suitable for official, export credit, and private cofinancing. The task manager (TM) includes in the Project Information Document a brief analysis of the type of cofinancing that is appropriate for the project and feasible from the recipient's perspective. Throughout project processing, the TM promptly and accurately updates the cofinancing information in the project timetables.3   

5. As needed, Bank staff facilitate contacts and interactions between the recipient and cofinanciers to expedite successful conclusion of the cofinancing discussions.

6. On obtaining confirmation of the cofinancier's interest in the project and of the recipient's decision on the cofinancier's participation, Bank staff:

(a) endeavor to coordinate the cofinanciers' and the Bank's project processing to ensure that funds will be available when required for all project components;

(b) encourage the recipient to extend to cofinanciers an invitation to participate in project preparation and appraisal missions, giving them sufficient lead time to plan for such participation;

(c) keep cofinanciers informed on the details of the project and of its processing and make available to them all relevant information;4   

(d) reach agreement with the recipient and the cofinanciers on the project financing plan, the project components to be cofinanced, the form of cofinancing, the packaging of procurement, appropriate arrangements to harmonize the Bank's and cofinanciers' requirements on reports from the recipient, and the timing of disbursements, and record this information in the Staff Appraisal Report;

(e) ensure that the Project Implementation Plan includes the implementation arrangements covering jointly financed components (and components cofinanced in parallel with the Bank, when such arrangements are necessary for the project's execution); and

(f) coordinate with the cofinanciers on the preparation of the Loan and Guarantee Agreements and, with the recipient's consent, invite them to attend joint cofinancing negotiations.


7. In cofinanced operations, the Bank's legal documents (described in OP 7.00, Lending Operations: Choice of Borrower and Contractual Agreements) include provisions for cofinancing (e.g., any necessary cross-effectiveness and cross-default clauses). Additional documentation needed for cofinancing involving trust funds is described in OP/BP 14.40, Trust Funds. For each project, the Bank and cofinancier may enter into a colenders' agreement covering, among other things, consulting and exchanging information. Colenders' agreements are prepared by LEG, cleared by the Trust Funds Administrator and the finance officer, and negotiated with the cofinancier by the TM and the country lawyer.

Implementation, Supervision, and Evaluation

8. Regional and CFPTO staff promptly notify each other if cofinancing arrangements change significantly after the Board approves the project. During project implementation, Bank staff (a) promptly provide cofinanciers with relevant information about project progress and about projected disbursement needs; and (b) whenever feasible, and if the recipient consents, invite the cofinanciers' representatives to participate in supervision missions.

9. In joint cofinancing (and, as appropriate, in parallel cofinancing), Bank staff include in supervision reports specific reference to (a) the sources and amounts of cofinancing and the progress of cofinanced components, (b) disbursement of cofinanced amounts, and (c) other monitoring ratings. Copies of mission aide-mémoire and supervision reports (in their entirety, if appropriate, or summaries) are sent promptly to the cofinanciers.5   

10. When Bank and recipient staff identify major problems in a cofinanced project, the TM consults with the lawyer and the finance officer and promptly notifies CFPTO and the cofinanciers. Bank staff consult with cofinanciers on important actions that affect the project (e.g., restructuring plans, suspension of disbursements notices, amendments to Agreements), and solicit reciprocal treatment from cofinanciers on their loans. If a cofinanced project is in problem status, any remedial action program must take into consideration how the cofinanced components are to be modified to help realize overall project objectives. Actions are taken in a manner consistent with relevant legal agreements involving the recipient, the Bank, and the cofinanciers.

11. The Implementation Completion Report (ICR)6   records the amounts, sources, and other characteristics of cofinancing (e.g., whether it is joint or parallel); the fees charged; the cofinancing arrangements; and the Bank's and the borrower's experience with the cofinanced project components. Similarly, Independent Evaluation Group’s evaluative notes on the ICR and the Project Performance Audit Reports comment on the cofinancing experience and the lessons learned.



12. The Regions have the primary responsibility for all cofinancing interactions with recipients and have decision-making authority on all project- or country-related cofinancing matters, clearing decisions, when appropriate, with the lawyer, Trust Funds Administrator, and finance officer. The Regions consult with CAP on aspects related to the Bank's institutional relationship with cofinanciers. Within the Region, the TM has primary responsibility for working with the recipient to help ensure that cofinancing is arranged and implemented in accordance with Bank procedures.

13. Each country department (CD) designates one or more departmental cofinancing coordinators to coordinate the CD's cofinancing activities. In cooperation with the country officer and other country team members, the coordinator (a) ensures that cofinancing issues are addressed, as appropriate, in the Country Assistance Strategy document;7   (b) keeps informed about the status of cofinancing operations in the CD; (c) facilitates departmental liaison with cofinanciers, ensuring that departmental staff are informed about major policies and priorities of cofinanciers active in the CD's countries; and (d) advises and supports TMs in assisting recipients to identify cofinancing sources.

14. Each Region designates a Regional cofinancing coordinator to monitor the Region's cofinancing activities. The coordinator maintains Regional liaison with cofinanciers and provides guidance to the departmental cofinancing coordinators. The Regional coordinator is the focal point for management information and data flows on cofinancing from the Regions and ensures that Regional staff provide appropriate inputs to consultations with cofinanciers and to the list of operations suitable for cofinancing that is transmitted to the cofinanciers.

15. Global Partnership and Trust Fund Operations CFPTO is the main institutional point of contact with cofinanciers on Bankwide cofinancing issues. CFPTO (a) provides advice and support to Regional and departmental cofinancing coordinators and TMs on cofinanciers' policies, programs, and procedures; (b) when necessary, works with departmental cofinancing coordinators and TMs to assist recipients in identifying cofinancing sources and in firming up cofinancing commitments; (c) when necessary, aggregates the CDs' cofinancing needs into overall cofinancing plans; (d) compiles, from information provided by TMs in the project timetables, lists of operations suitable for cofinancing,8  and distributes them to cofinanciers; (e) organizes and manages annual cofinancing consultations with cofinanciers and informs the Regions of their outcomes and agreed follow-up actions; (f) negotiates, in cooperation with LEG, and administers the Cofinancing and Technical Assistance Framework Agreements; (g) serves as the contact point for cofinanciers for resolving generic issues of policy and procedures; and (h) provides cofinancing management information and analytical and statistical data services. CFPTO coordinates with External Affairs on general donor relations issues, with the Resource Mobilization Department on resource mobilization, and with the Treasurer's Department on issues related to financial institutions. For private cofinancing, CFPTO is responsible for structuring transactions, approaching the market, and carrying out negotiations, in close collaboration with Regional staff, LEG, and FPI.  

  1. "Bank" includes both IBRD and IDA; "loans" includes IDA credits and IDA grants; "projects," "operations," and "investments" include the activities or facilities financed under investment, Program-for-Results, and development policy loans; "Loan Agreements" includes Development Credit Agreements; and "recipient" refers to the recipient of cofinancing funds, which is usually also the Bank's borrower.
  2. Formerly the Management Information System.
  3. The information serves as the basis for the list of operations suitable for cofinancing (e.g., Cofinancing Opportunities with the World Bank) that CAP periodically compiles and provides to cofinanciers.
  4. See BP 8.60, Development Policy Financing, BP 9.00, Program-for-Results Financing, and OP/BP 10.00, Investment Project Financing.
  5. See BP 2.11, Country Assistance Strategies.
  6. For example, Cofinancing Opportunities with the World Bank, published twice a year.

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