The African Development Bank (AfDB) has secured a major agreement with the International Federation of Consulting Engineers (FIDIC) that will give the international funding organization the use of seven FIDIC standard contracts for the next five years.
Under the terms of the agreement, FIDIC has granted the Bank a non-exclusive license to refer to the seven major FIDIC contracts for projects they finance and the documents may be used as part of the Bank’s standard bidding documents. The contracts include the latest 2017 Second Edition FIDIC contracts and 1999 editions, which cover a wide range of international construction and infrastructure work.
FIDIC has similar agreements with the World Bank, Inter-American Development Bank, Caribbean Development Bank, the European Bank for Reconstruction and Development and the Asian Infrastructure Investment Bank.
FIDIC chief executive Dr. Nelson Ogunshakin said “We are delighted to have signed this agreement with the African Development Bank, an organization doing fantastic work fighting poverty and improving living conditions for people in Africa. By adopting the FIDIC contracts on major projects, the AfDB is demonstrating that they endorse the fair and balanced approach that these documents offer to parties on major construction contracts and we believe that this will create more certainty in the market as banks, lenders, investors and clients adopt them”.
“The Bank’s endorsement should also provide additional comfort to the financial, institutional and private equity investors operating in the global market to adopt the use of FIDIC standard procurement contracts as an effective tool to mitigate the risks associated with investable infrastructure asset class,” he added.
Commenting on the agreement, Mr. Frank Mvula the Bank’s Director of Fiduciary Services & Inspection, said: “We are glad to have concluded an agreement with FIDIC that would enable us to incorporate FIDIC contracts in some of our standard bidding documents. There is no doubt that the use of FIDIC contracts is a step towards enhancing equity and fairness as well as efficient and effective contract management as emphasized under the Bank’s new Procurement Framework.”
FIDIC President Bill Howard said the organization aims to strengthen relationships with the multilateral development banks and other international funding institutions as improved communication and cooperation will bring benefits to the industry.