In 2020, IFC and its development partners created the Joint Collaboration Framework Agreement (JCFA) as a new structure for increased coordination and cooperation. For downstream project financing, the JCFA enables signatories to take a joint approach to origination and co-lending, supplementing the Master Cooperation Agreement (MCA) where IFC plays the lead arranger role.
The JCFA also creates a framework for development institutions to work together on a range of upstream activities, including policy dialogue, adjustments to local regulatory frameworks to promote private sector development, development of specific upstream projects, and project preparation activities.
How It Works
Parties to the JCFA participate in a pillar assessment, which entails review and due diligence of and by each signatory. Once this process is completed, any signatory can play the role of lead lender in a specific transaction, while others participate as parallel lenders in a streamlined manner.
JCFA members also agree:
- to promote the prioritization of private-sector solutions to development challenges in their countries of operation;
- to apply the Blended Concessional Finance Principles to downstream projects; and
- to work together to converge around standards, diligence and supervision processes, such as those for environmental, social and governance matters, for joint upstream projects.
Benefits to Participants
- Builds on successful established MCA partnership framework
- Encourages the development of upstream activities with the goal of increasing the pipeline of bankable projects that underpin investment and sustainable private sector economic growth
- Provides a framework for DFIs to share in the cost burden of such upstream activities
- Creates a framework that would allow two-way (reciprocal) co-investment and co-financing mobilization by and among DFIs
- Improves efficiency in processing co-financing, including credit analysis, ESG requirements, legal and compliance review, and other DFI requirements in working with shared borrowers
- Paves the way for DFI collaboration in other areas, such as staff exchange programs