The two regional banks announced they had signed a Memorandum of Understanding at the ADB’s annual meeting, which got underway in Germany over the weekend.

This is the second partnership in a few months for the China-led AIIB, which has been struggling to dispel its image as a rival to its much older equivalents.

The bank secured a similar arrangement with the World Bank during the International Monetary Fund-World Bank spring meetings in Washington last month.

The banks’ presidents, Takehiko Nakao (ADB) and Liqun Jin (AIIB), said the two will work together to tackle big regional challenges, including a massive infrastructure deficit, poverty reduction, climate change and sustainable growth.

The MoU sets the stage for the banks to share funding costs for projects. The ADB said it is already in talks with the AIIB around ventures in the road and water sectors, the first of which is expected to be a 64-kilometer highway connecting two cities in Pakistan’s Punjab Province.

Other sectors the two banks will collaborate in include energy, transport, telecommunications, rural and agriculture development, urban development and environmental protection.

Observers will be hoping such partnerships ensure the AIIB sticks to its motto of being “lean, clean and green” after uncertainty around the social and environmental standards it would adhere to.

The ADB and AIIB have had a good working relationship throughout the establishment process, and last month it was announced that Hamid Sharif, country director for China at the ADB, had been appointed as first director general of the AIIB’s Compliance, Effectiveness and Integrity Unit.