The African Development Bank (AfDB) and the Inter-American Development Bank (IADB) have signed a $3.2 billion Exposure Exchange Agreement, renewing a 2015 pact to strengthen capital efficiency and expand development lending. The agreement, formalized on the sidelines of the World Bank Group and International Monetary Fund Spring Meetings, marks the AfDB’s fourth such transaction with multilateral development banks (MDBs), following successful deals with the International Bank for Reconstruction and Development and the Asian Development Bank.

This innovative financial tool allows both institutions to diversify their sovereign lending portfolios, optimize capital deployment, and maintain robust financial resilience. The agreement is expected to unlock approximately $1.2 billion in additional financing for Latin America and the Caribbean, while enhancing the AfDB’s lending capacity across Africa. It aligns with the G20’s call for MDBs to collaborate as a system to amplify development impact.

AfDB President Dr. Akinwumi Adesina emphasized the agreement’s significance, stating, “We are pleased to continue our longstanding collaboration with the IADB in structuring innovative solutions to expand development impact in our member countries.” IADB President Ilan Goldfajn echoed this sentiment, noting, “This milestone strengthens the financial resilience and creditworthiness of both institutions, benefiting the people of Latin America, the Caribbean, and Africa.”

Since 2015, the AfDB has leveraged exposure exchanges to bolster its capital adequacy and support sustainable development across Africa. The transaction underscores both banks’ commitment to innovative risk management and their response to global calls for enhanced MDB cooperation. Adesina urged more MDBs to adopt such mechanisms, citing their proven success.

The agreement reinforces the AfDB and IADB’s roles as agile, well-capitalized institutions dedicated to addressing pressing development challenges in their respective regions, fostering economic growth, and enhancing global financial stability.