How to work with multilateral development banks financing major scale infrastructure projects.
Sao Paulo, Brasil.
IInkeeping with my post How to make a good international bidI have been written to by people encouraging me to unearth the secrets of multilateral financial institutions, as these are bodies with whom it is very interesting to forge a business relationship in terms of internationalisation, and due to the fact that they finance highly attractive projects in developing nations. As such, I shall tell you what they are like and how to work with them.Multilateral Development Banks promote the social and economic development of their partners through infrastructural advancements.
Multilateral Development Banks (MDBs) are a type of international financial institution (IFIs) created by States and / or international institutions. Their fundamental mission is to foster the social and economic development of their partners (and therefore, promoting the investment in infrastructures). To achieve this, they use, instruments, the most commonplace of these being:
1) Long-term loans at market interest rates,
2) Extremely long-term loans below the market’s interest rate and
The Main MDBs (whole region, in other words, for an entire Continent or Sub-Continent):
Alongside these, there are also Sub-regional MDBs (by that we mean, only for a group of nations within a given continent):Latin American Development Bank, (CAF), Caribbean Development Bank (CDB), Central American Bank for Economic Integration (CABEI), East African Development Bank (EADB), West African Development Bank (BOAD), Black Sea Trade and Development Bank (BSTDB), Eurasian Development Bank (EDB)
Finally, the European Commission is a case apart as it finances actions associated with EU policies through programmes within the framework of the European Union and with the project named Europe Aid for neighbouring countries.
There are several ways of working with these multilateral bodies:
- One is acting directly as an individual assessor for the Bank, hired by the latter. You will be asked to assess government or evaluate the projects they are involved in.
- Also the banks themselves put studies up for tender to provide support for municipalities or governments.
- Finally, the co-finance projects and construction work with the Public Sector Administrations in these countries.
Even though there are many guides on different banks, I will try to summarise here which steps must be taken in order to work with these bodies in certain countries:
- Define what our target market is: “for this reason we have to pause and reflect on what strengths differentiate us from the rest and see how we can compete”. It is better to focus on niches and adapt bids to these. .
- Add your name to the Multilateral Development Banks’ registries. It is of the utmost importance that this is done thoroughly, adapting what is requested to our strengths and to the niches we wish to fill..
- Define your target countries:
- Do not apply for everything, it is better to centre initially on 2 or 3 where we can concentrate our efforts.
- In order to choose these countries, evaluate the previous experience or knowledge of the area, local partners on hand and the complexity of the nation.
- I recommend you contact acquaintances, and the ICEX (Spanish government body to aid collaborations for infrastructure developments) and other similar actions before making a decision.
4. Make people aware of your company and begin networking.
- It is essential that they meet you in person. .
- It is worthwhile knowing the country, its culture and customs, and its people
- 5. Select the bids and prepare them in depth as we have already explained. Remember that quality is more important that quantity, as can be summed up in the quote byBaltasarGracián (1601 – 1658) “Perfection lies in the quality, rather than the quantityExtension alone is never risen above mediocrity”.
I have also worked on projects financed by the World Bank and the Inter-American Development Bank (IDB) and cannot stress firmly enough how satisfactory the experience was. However, to get to that stage, one must have wide-ranging experience and have worked on many projects. At the present time, I am working on a project financed by the IDB for the Bi-Oceanic Railway Corridor in Bolivia.
If you have worked with these bodies, please share your experiences with us.