The African Development Bank Group has signed a $3.2 billion Exposure Exchange Agreement with the Inter-American Development Bank (IADB).

The agreement, which was signed in Washington DC, on Monday, was aimed at renewing a prior agreement executed between the two institutions in 2015. The agreement was signed on the sidelines of the World Bank Group and International Monetary Fund Spring meetings.

Since 2015, the African Development Bank has used these agreements to diversify lending within its sovereign portfolio and deploy capital effectively while preserving a resilient financial base.

It is also the fourth exposure exchange undertaken by the ADB with other multilateral development banks, in the continuous pursuit of innovative ways of strengthening the capital adequacy and efficiency of Multilateral Development Banks, as well as boosting their development lending capacity.

Welcoming the development in his opening remarks, Akinwumi Adesina, president of the ADB, explained that the transaction underpinned the African Development Bank’s forward-looking approach to capital and risk management.

Mr Adesina added, “We are pleased to continue our positive, longstanding collaboration with the Inter-American Development Bank in structuring and executing innovative financial solutions to align with the G20’s call for Multilateral Development Banks to work together as a system in expanding development impact to our member countries.”

He stressed that the Multilateral Development Banks should do more of such transactions because of their proven success and impact.

Inter-American Development Bank president, Ilan Goldfajn, pointed to the success of the first agreement signed with the African Development Bank a decade ago.

Mr Goldfajn said the new agreement marked yet another milestone in the strong and fruitful collaboration with the African Development Bank.

“Thanks to this operation, we are strengthening the financial resilience, creditworthiness, and financing capacity of both of our institutions.

“A win-win for all, that will benefit the people of Latin America and the Caribbean and Africa,” he said.

However, the transaction follows previous successful agreements between the African Development Bank and other Multilateral Development Banks, including the International Bank for Reconstruction and Development and Asian Development Bank.