The African Development Bank (AfDB) has signed a major agreement with the International Federation of Consulting Engineers (FIDIC) that will see it use seven FIDIC standard contracts for the next five years.
Under the terms of the deal, a statement said FIDIC has granted the bank a non-exclusive licence 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.
The move by the AfDB is another significant endorsement for FIDIC contracts from a multilateral development bank, following similar agreements signed with the World Bank, Inter-American Development Bank, Caribbean Development Bank, the European Bank for Reconstruction and Development and the Asian Infrastructure Investment Bank in recent months.
FIDIC Chief Executive Nelson Ogunshakin said: “We are delighted to have signed this agreement with the African Development Bank, an organisation doing fantastic work fighting poverty and improving living conditions for people in Africa. The signing of this agreement means that FIDIC has now entered into similar licencing agreements with almost all of the major global funding organisations. 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.”