The International Fund for Agricultural Development (IFAD) and FIDIC have extended their cooperation agreement on the use of FIDIC standard contracts in Fund-financed projects for an additional five years. The new agreement simultaneously expands the range of contract forms available for such projects to eight.

This decision is significant not only in scale but also in how it demonstrates that international financial organizations increasingly embed standard contracting mechanisms directly into project implementation procedures.

IFAD is an international financial institution and specialized UN agency working on rural development and food security. Today, the Fund is implementing over 200 projects in nearly 100 countries worldwide.

Under the new agreement, FIDIC has granted IFAD a non-exclusive license to use eight principal contract forms. These cover various approaches to organizing construction and infrastructure projects — from traditional design-bid-build to Design–Build, EPC/turnkey, Design–Build–Operate, underground works, short forms of contract, and agreements between employer and consultant.

The list includes, among others, FIDIC’s Red, Yellow, Silver, Gold, Green, and Emerald Books, as well as the White Book, a model agreement between employer and consultant.

Contract as Part of the Financing Mechanism

An important detail of the agreement: the corresponding FIDIC documents will be used as part of IFAD’s standard tender documentation for Fund-financed projects.

This well illustrates the shift occurring in international infrastructure financing. Along with financial resources, the project receives requirements for how it must be prepared, procured, contracted, and implemented.

For a financial institution, a contract in such a system is far more than the legal formalization of agreements between parties. It determines the allocation of functions and risks, interaction procedures, mechanisms for managing changes, and other rules upon which project manageability directly depends.

Risk management and project implementation quality are among the reasons both FIDIC and IFAD cite for continuing their cooperation. According to IFAD’s assessment, the use of internationally recognized contract standards helps strengthen project implementation capacity. FIDIC, in turn, emphasizes the predictable and balanced allocation of risks in large construction and infrastructure projects.

Moreover, this already works in practical procurement procedures. IFAD’s standard procurement documentation includes a separate form for international procurement of large construction works using FIDIC contracts.

What This Experience Means for Ukraine

For Ukraine, this example is important in the context of scaling international financing for reconstruction.

As the number of projects increases, so do the requirements for their preparation and implementation. A client must not only conduct procurement and conclude a contract but also determine the project implementation model beforehand, allocate functions among participants, and establish mechanisms for managing risks, changes, timelines, and costs.

Therefore, international practice increasingly views financing, procurement, contract, and professional project management as elements of a single process.

For the Ukrainian market, this has quite practical implications. The greater the role international financial organizations play in reconstruction, the more critical becomes the capacity of Ukrainian clients, engineers, consultants, and contractors to work with the contractual models and procedures used in international infrastructure projects.

This does not concern the mechanical transfer of a separate contract form into a Ukrainian project. More importantly, it requires understanding the underlying logic: the implementation model, contract conditions, distribution of responsibility, and risk management should be determined as parts of a unified project management system.

This capacity becomes increasingly important for a market that must simultaneously implement a large-scale reconstruction program and integrate into the international professional community.

Source: https://www.fidic.org/node/46981