Inter-American Development Bank - World Bank Full Mutual Reliance Framework - Proposed World Bank Policy on Full Mutual Reliance Framework with the Inter-American Development Bank

Jul 19, 2026

Uploaded by Aria

A joint paper proposes a Full Mutual Reliance Framework (FMRF) between the World Bank and the Inter-American Development Bank to let borrowers apply one shared set of operational policy requirements for co-financed operations. The framework is based on a substantially aligned assessment of relevant WB and IDB policies and is designed to cover investment and policy financing modalities. A Lead Lender, designated by the borrower with the two institutions, manages project preparation, appraisal, supervision, and completion, while the Trail Lender provides technical inputs. Implementation will be overseen by management, with joint independent evaluation and a four-year initial learning phase.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages66

Reading Time2 h 46 min

AccessFree to download

Executive Summary

Introduction and Background

Technical Assessment of WB and IDB Policy Alignment

The Full Mutual Reliance Framework

Role of Oversight Units

Initial Phase and Full Roll Out

Policy Implications

Challenges and Risks

Recommendation

Annex A: IDB-WB FMRF Indicators

Annex B: Policy Comparison Tables

Annex C: World Bank Policy on Full Mutual Reliance Framework with the Inter-American Development Bank

Public Disclosure Authorized Pub lic Disclosure Authorized Inter-American Development Bank –World Bank Full Mutual Reliance Framework And Proposed World Bank Policy on Full Mutual Reliance Framework with the Inter-American Development Bank I. Executive Summary 1. Advancing country development outcomes through stronger collaboration across institutions and with development partners is a priority for multilateral development banks (“MDBs”) . In response to shareholders’ call for MDBs to work better together as a system, this paper (the “Paper”) proposes a Full Mutual Reliance Framework (“FMRF”) between the World Bank (“WB”) 1 and the Inter-American Development Bank (“IDB”) to allow borrowers2 to apply a single set of operational policy requirements in co-financed operations under the FMRF. 2. Relevant WB and IDB operational policies were assessed and considered substantially aligned, providing the foundation for the proposed FMRF. The proposed FMRF will be available for investment financing and policy financing3, and/or any other modalities and instruments that apply the same operational policy requirements of the lead lender (“Lead Lender”), as updated from time to time. The WB and IDB will jointly identify and agree with their borrowers on the operations to be processed under the FMRF. The institution designated as the Lead Lender will be responsible for all aspects of project design, preparation, appraisal, supervision and completion, while the other institution (“Trail Lender”) may provide technical inputs for the Lead Lender’s consideration. The application of the FMRF is strictly voluntary for borrowers and the decision on designating the Lead Lender and the Trail Lender will be made by the borrower in coordination with WB and IDB. 3. After approval of the recommendation set forth in Section IX below by the Board of Directors,4 Management5 will oversee implementation and facilitate the rollout in coordination with the other institution by developing operational guidelines, providing staff guidance and training, updating relevant operational documents, as appropriate, ensuring effective communication and outreach to relevant stakeholders, including in particular member countries, and tracking results and benefits of the FMRF. As further described throughout the Paper, the Board of Directors will have several points of engagement in FMRF implementation. By the end ofan initial phase of four years after the approval of the FMRF, Management will take stock of the lessons learned and share the results with the Board of Directors. The IDB’s Office of Evaluation and Oversight and the WB’s Independent Evaluation Group will conduct a joint independent evaluation of the effectiveness ofFMRF after a significant number of operations have been implemented under the FMRF. 4. This Paper consists of nine sections and three Annexes, including: Section I (Executive Summary); Section II (Introduction and Background); Section III (Technical Assessment of WB and IDB Policy 1 The term “World Bank” or “WB” as used in this Paper refers to the International Bank for Reconstruction and Development (“IBRD”) and the International Development Agency (“IDA”) . 2 The terms “borrower” and “lender” as used in this Paper include, respectively, recipients of grants and IDB or WB, as the case may be, as providers of grant financing. 3 The terms “investment financing” and “policy financing” as used in this Paper refer to the specific lending instruments available at each institution – specifically, at the WB its Investment Project Financing (“IPF”) and Development Policy Financing (“DPF”) and at the IDB its Investment Financing (“IF”) and Policy Based Financing (“PBF”) . Section III identifies the lending instruments that are included within the scope of the FMRF, as well as those instruments that are excluded. 4 The term “Board of Directors” or “Board” as used in this Paper is comprehensive of the Board of Executive Directors ofthe WB a

FAQs

What is the Full Mutual Reliance Framework (FMRF) proposed by the World Bank and IDB?

The FMRF is a cooperative arrangement for co-financing that lets borrowers use a single set of operational policy requirements when working with the World Bank and the Inter-American Development Bank.

How do the Lead Lender and Trail Lender responsibilities work under the FMRF?

The borrower designates a Lead Lender responsible for project design, preparation, appraisal, supervision, and completion. The Trail Lender may provide technical inputs for the Lead Lender’s consideration.

Why is the FMRF expected to benefit borrowers and the two institutions?

It aims to simplify project processing by reducing complexity, timelines, and transaction costs, while improving efficiency and effectiveness through stronger coordination and reduced duplicative processes.

Jul 19, 2026

Uploaded by Aria