TOKYO — The Japan International Cooperation Agency signed a preliminary agreement Monday with a World Bank affiliate geared toward investing and lending $3 billion over five years in the developing world.
JICA and the International Finance Corp. aim to back infrastructure and energy projects planned by private-sector companies, starting with a few this year, in order to promote economic growth in places vulnerable to political instability.
The two groups will contribute $1.5 billion each to the cause. Infrastructure-centered funding will support areas such as agriculture and health care. Annual infrastructure demand in Asia totals $1.7 trillion, data from the Asian Development Bank shows. The money from JICA and IFC should stimulate further investment and financing by private companies and financial institutions.
JICA, a state agency, usually lends to governments in developing nations rather than to the private sector. The IFC is a member of the World Bank Group that specializes in supporting the private sector in emerging nations. Synergies are expected as the partners share expertise.
For the IFC, a partnership with JICA will grant easier access to Japanese corporations.
The World Bank’s focus on infrastructure quality fits with JICA, a body that invests in high-quality infrastructure. In March, the two organizations agreed to co-finance a new fossil-fuel power plant in Bangladesh.