The IDB’s decision follows the World Bank signing a similar agreement in February (link opens in new tab). FIDIC said that it also expects to announce further agreements with other multilateral development banks soon.
IDB - the leading source for development financing in Latin America and the Caribbean - will use six FIDIC standard contracts for projects they finance over the next five years. The contracts mainly include the latest 2017 second edition FIDIC contracts, which cover a range of international construction and infrastructure work.
FIDIC chief executive Dr Nelson Ogunshakin said: “This is another significant development for FIDIC and we are delighted that the IDB has agreed to adopt our 2017 editions of the Rainbow suite of contracts and use them as a key part of their standard bidding documents.
“This will create more certainty in the market as by adopting the FIDIC contacts on major projects the IDB is saying that they endorse the fair and balanced approach that these documents offer to parties on major construction contracts. The familiarity that the FIDIC contracts bring make it easier to get projects under way as many of the typical commercial risks are clearly addressed in the contracts and all the parties understand their obligations and responsibilities.
“The IDB’s endorsement should 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 risk associated with investable infrastructure asset class. Over the coming months, we will be working with our member associations and strategic partners to ensure that the FIDIC 2017 contract editions are translated into five major languages - Arabic, Chinese, French, Portuguese and Spanish - to aid effective use across all the other multilateral development banks’ operating countries.”
IDB technical procurement advisor Maria Eugenia Roca said: “We are delighted to continue our collaboration with FIDIC adopting the standard conditions of contracts in the 2017 suite for use in the IDB financed projects. The 2017 FIDIC standard conditions complemented by IDB Particular Conditions will ensure that large infrastructure contracts continue to be based on an internationally recognised standards and reflects the key aspect of IDB policies as well as the environmental and integrity requirements.
“As the main source of development financing for Latin America and the Caribbean, we need to make sure that at the IDB we have in place the highest standards in the industry when deploying a procurement process to achieve sustainable development goals.”
FIDIC president Alain Bentéjac said: “This move by the IDB represents further major international market buy-in for our FIDIC 2017 second edition contracts and one that we hope will also influence the supply chain to adopt FIDIC contracts thereby creating even more certainty in the planning and delivery of major international construction and infrastructure projects. We look forward to continuing our strong partnership with the IDB, the World Bank and the other multilateral development banks (MDBs) over the coming years.”