MON, JULY 23 2018-theG&BJournal-Human Development lending, which cuts across education, health, nutrition and population; social protection; and jobs—rose by a record 74 percent, a 25.2 percent increase on the World Bank’s financing commitment to developing countries in FY18 from 16 percent in FY17, according to the World Bank.
The Bank said this significant shift demonstrates increased demand by countries to invest in building human capital, reflecting the priorities of the Human Capital Project, an ambitious effort to accelerate more and better investments in people that was announced at the World Bank Group’s 2017 Annual Meetings.
Total World Bank Group commitments to developing countries in the fiscal year 2018 which ended June 30 hit nearly $64 billion.
Also, climate change related lending gulped a record setting $20.5 billion, exceeding a target set in 2015 of 28 percent of lending volume to be climate-related by 2020.
”With a record-setting $20.5 billion in climate-related financing delivered in the last fiscal year, the World Bank Group continues to step up its support to developing countries to reduce greenhouse gas emissions and build resilience to increasingly intense climate change impacts,” the Bank noted in a report published last week.
The Bank’s Group President Jim Yong Kim said in a statement that demand continues to rise for the Bank’s finance, expertise, and innovation, noting that in the last fiscal year, the shareholders improved its ability to meet that demand with a historic $13 billion capital increase, which will help us address the most critical challenges of our time, and help our client countries – and their people – reach their highest aspirations.
”The capital increase was a strong vote of confidence in the World Bank Group’s staff, who work tirelessly across the globe to end extreme poverty and boost shared prosperity,” he said.
Support to countries from the International Bank for Reconstruction and Development (IBRD), which provides financing, risk management products, and other financial services to members, rose to $23 billion in FY18, up from $22.6 billion in the previous fiscal year. IBRD in fiscal 2018, issued $36 billion in bonds in 27 currencies to fund sustainable development activities in middle-income countries.
Commitments from the International Development Association (IDA), which provides zero or low-interest loans and grants to the world’s 75 poorest countries, hit a record $24 billion during the first year of IDA18.
”IDA’s increased commitments reflect strong demand for financing, marked by a 27 percent increase compared to the first year of IDA17. FY18 represents a historic step for IDA in terms of policy and financing innovations including new ways to address rising risks of fragility, mobilize private sector investments, and increase capacity for climate financing,” the Bank said.
In April 2018, IDA marked its debut in the global capital markets, issuing bonds for the first time in its nearly 60-year history and launching a new financing model for development. IDA’s first bond raised $1.5 billion as investors around the globe seized the opportunity to invest in a triple-A rated asset and support life-changing investments in the poorest countries.
The International Finance Corporation (IFC), the largest global development institution focused exclusively on the private sector, leveraged its capital, expertise, and influence to create markets and opportunities wherever they were needed most. Preliminary and unaudited data as of June 30 indicated that IFC’s long-term investments totaled more than $23 billion, including funds mobilized from other investors. In FY18, IFC made nearly $11.6 billion in long-term investments from its own account and mobilized about $11.6 billion from other investors. These often-complex investments supported 366 long-term finance projects in developing countries around the world.
IFC maintained its strategic focus on the poorest countries and regions. It provided more than $6.8 billion in long-term financing to accelerate development in IDA countries, including funds mobilized from other investors. These countries accounted for nearly 29 percent of IFC’s total investments. Investments in businesses in fragile and conflict-affected areas totaled more than $3.7 billion, including funds mobilized from other investors.
The Multilateral Investment Guarantee Agency (MIGA), which has a mandate of facilitating FDI to developing countries by extending political risk insurance and credit enhancement, issued a record $5.3 billion in new guarantees. These guarantees will help provide access to power for some 8 million people, improve access to new or better telecommunications services for 1.4 million people, generate $1.4 billion in fees and taxes for host governments, and avoid an estimated 3 million tons of CO2e emissions. In FY18, MIGA guarantees helped finance projects worth $17.9 billion in developing countries, and its total gross portfolio doubled since FY13, reaching $21.2 billion in support of 161 projects across 67 countries. New guarantee issuance also doubled in FY18, as compared to FY13.
