World Bank Group President Jim Yong Kim and Asian Infrastructure Investment Bank President Jin Liqun signed the first co-financing framework agreement between the two institutions on Wednesday.

The agreement outlines the co-financing parameters of World Bank-AIIB investment projects, and paves the way for the two institutions to jointly develop projects this year. In 2016, the AIIB expects to approve about $1.2 billion in financing, with World Bank joint projects anticipated to account for a sizable share.

Jin said he was very pleased to sign this co-financing agreement together with Kim. "The AIIB is very grateful for the generous and timely support offered by the World Bank Group throughout our establishment process, and we look forward to a long and fruitful relationship with ongoing cooperation in project co-financing and other areas," Jin said.

Kim said signing this agreement enables both institutions to finance development projects together, and that is an important first step toward working with a new partner to address the world's huge infrastructure needs. "As the world's multilateral development banks collaborate ever more closely, leveraging each other's financing and expertise, the people who will benefit the most will be the world's poor,"Kim said.

Some 1.2 billion people in the world lack access to electricity and 2.4 billion people don't have access to basic sanitation services. The World Bank Group invested $18.8 billion in infrastructure in the fiscal year ending June 30, 2015. The institution will leverage even more private finance through new partnerships, such as the Global Infrastructure Facility, and the growing portfolios of the International Finance Corporation and the Multilateral Investment Guarantee Agency.

The World Bank and the AIIB are currently discussing nearly one dozen co-financed projects in sectors that include transport, water and energy in Central Asia, South Asia and East Asia. Under the agreement, the World Bank will prepare and supervise the co-financed projects in accordance with its policies and procedures in areas like procurement, environment and social safeguards.

The AIIB, located in Beijing, aims to promote regional cooperation in addressing development challenges by working with other multilateral and bilateral development institutions. It is expected to advance sustainable economic development and to improve infrastructure in Asia.