Impact Investing with IDA - World Bankpubdocs.worldbank.org/.../ida-investor-presentation.pdfThis presentation is focused on IDA as an i 猀猀甀攀爀渀漀琀漀渀愀渀礀

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Impact Investing with IDA

Presenter

Presentation Notes

Thank you for taking the time for meeting with us. We are thrilled about this opportunity to introduce IDA – a member of the World Bank Group, to the key investors like you. You are already familiar with World Bank bonds – they are issued by another member of the World Bank Group, IBRD. IDA is preparing to access the capital markets. This presentation is focused on IDA as an issuer, not on any specific bond issuance. IDA’s introduction to the capital markets comes at a good time: We’re seeing a transformation in the capital markets with investors asking more about where their money is going – we are seeing demand for high quality, liquid investments that have a positive impact and for issuers who have the metrics and impact measurement to prove it; At the same time, there is broad recognition that everyone has a role to play in achieving the Sustainable Development Goals that were launched in 2015, – including the need to mobilize private sector financing to reach those goals. That’s where IDA comes in – when IDA accesses the capital markets, investors will have a new and unique opportunity to invest for impact and contribute to global development. I’d like to start off by summarizing 3 very unique features for IDA: While IDA will be new to the capital markets, IDA has been the leading source of development finance and knowledge services for some of the fastest growing economies in the world for decades – almost 60 years to be precise. It has been triple-A rated and has conservative risk management policies that are similar to IBRD. Over time, IDA has built an impressive, virtually unleveraged, capital base, and is now using the opportunity to optimize the use of its large equity to significantly scale up its lending volumes and, correspondingly, the development impact, helping its client countries to achieve Sustainable Development Goals. So, while IDA will be new to the capital markets, it offers a unique value proposition and has a solid track record – in terms of its business model and its prudent risk management, and now also in funding, benefitting from the 70 years of IBRD’s experience. We will go through the slides for more details and will be happy to answer your questions.

1IDA | INTERNATIONAL DEVELOPMENT ASSOCIATION | WORLD BANK GROUP

NOTIFICATION IN RELATION TO PRIVATE PLACEMENT OF BONDS IN JAPANThe following presentation can be considered to be a solicitation of offer to acquire bonds under the laws of Japan (the “AcquisitionSolicitation”). This presentation, and any such Acquisition Solicitation, is targeted only to Qualified Institutional Investors (“QII”)and only QIIs can be purchasers (the “Purchaser”) of any bonds mentioned in this presentation. QIIs who would purchase any ofthe bonds mentioned herein are prohibited from transferring such bonds to any person other than another QII.

Pursuant to Article 23-13 of the Financial Instruments and Exchange Law (“FIEL”), the following notification to each of the QIIs receivingsolicitation in relation to the Acquisition Solicitation of any bonds mentioned herein is hereby made as follows:

• As the Acquisition Solicitation falls under the situation as specified in Article 2(3)(ii)(a) of the FIEL, no securities registrationstatement has been or will be filed with respect to any of the bonds mentioned herein under Article 4(1) of the FIEL.

• The restriction that QIIs who would purchase any of the bonds mentioned herein are prohibited from transferring such bonds toany person other than another QII is stated in this presentation.

Note:- “Qualified Institutional Investor” or “QII” is defined in Article 10, paragraph 1 of the Cabinet Office Ordinance Concerning theDefinitions as Stipulated in Article 2 of the Financial Instruments and Exchange Law (MOF Ordinance No. 14 of 1993, as amended) andrefers to those investors that are deemed to have expert knowledge of, and experience with, investments in securities (Tekikaku KikanToshika).- “FIEL” refers to the Financial Instruments and Exchange Law - Law No. 25 of 1948, as amended.

ANY SOLICITATION OF OFFER TO ACQUIRE BONDS DISCUSSED IN THIS PRESENTATION IS INTENDED EXCLUSIVELY TOQUALIFIED INSTITUTIONAL INVESTORS IN JAPAN. THIS PRESENTATION IS FOR INFORMATION PURPOSES ONLY FOR, ANDSHOULD NOT BE CONSTRUED AS A SOLICITATION OR OFFER OR RECOMMENDATION TO ENGAGE IN ANY TRANSACTIONWITH, ENTITIES OR INDIVIDUALS THAT ARE NOT QUALIFIED INSTITUTIONAL INVESTORS IN JAPAN.

This document and the information it contains are not being issued and may not be distributed in the United States.

This document does not constitute an offer to sell, or a solicitation of offers to purchase or subscribe for, securities in theUnited States. The securities referred to herein have not been, and will not be, registered under the Securities Act of 1933, asamended, and may not be offered, exercised or sold in the United States absent registration or an applicable exemption fromregistration requirements.

U.S. OFFERING RESTRICTIONS / DISCLAIMER

Presenter

Presentation Notes

For presentations to QIBs in the US, delete First sentence of the disclaimer


Contents

● Introduction

● Financial Strength

● Funding

● IDA at Work

Presenter

Presentation Notes

We will start with a quick overview of what IDA is, then follow up with the details of IDA’s finances and plans for the funding program, and conclude with selected examples of IDA work in its borrowing countries.


Introduction

About IDA:• Member of the World Bank Group. Established

in 1960 as legally independent entity with the same status, immunities and privileges as IBRD and IFC.

• Owned by 173 countries. US, Japan, UK, Germany and France are the largest shareholders.

• Mission: end extreme poverty and promote shared prosperity in a sustainable manner.

• Provides technical expertise, loans, grants and guarantees to countries with low per capita income (Eligible countries generally have less than $1,165 per capita income).

• Washington, D.C. headquarters; offices in 75 countries.

Presenter

Presentation Notes

What is IDA? IDA is one of the World Bank Group entities – alongside with IBRD and IFC, and has the same status, immunities and privileges as these two institutions. It is a separate legal entity, owned by 173 countries, with US, Japan, UK, Germany and Frances being its largest shareholders. To achieve its mission to end extreme poverty and promote shared prosperity in a sustainable manner, IDA provides technical expertise and financing in form of loans, grants and guarantees to its member governments. Currently, 75 countries are eligible to receive IDA’s financing. IDA’s head office is located in Washington DC, with offices in the countries of its operations.


What is The World Bank Group?

IBRD

International Bank for Reconstruction and Development

Lends to governments of middle-income

countries.

IFC

International Finance

Corporation

Promotes development by financing private sector enterprise in

developing countries.

MIGA

Multilateral Investment

Guarantee Agency

Promotes foreign direct investment into

developing countries by offering political risk

insurance (guarantees) to investors and lenders.

ICSID

International Centre for the Settlement of Investment Disputes

Provides international facilities for conciliation

and arbitration of investment disputes.

IDA

International Development Association

Provides loans and grants to

governments of developing countries.

1945 1960 1956 1988 1966

Introduction

Presenter

Presentation Notes

As we mentioned earlier, IDA is a part of the World Bank Group. Other entities you might be familiar with are IBRD and IFC. All WBG entities have a unique mandate – IDA provides financing to its member governments that typically cannot borrow from IBRD.


Transforming Development Finance: A New IDA

Introduction

• 909 projects; US$91.4bn; 75 countries.

• Scaling up to achieve Sustainable Development Goals (SDGs).

• New Capital Markets Activities to expand lending and impact.

• New financial model includes new loan products and updated financial policies to protect bondholders.

2016 IDA18: 60 countries agreed to $75b financing2016 IDA receives triple-A credit ratings

1964 First IDA replenishment:18 countries committed $753m

1961 Honduras received first IDA financing ($9m)

2011 IDA ranked #1 of 58 donors in “Publish What You Fund” transparency index

1960 IDA established ($912.7m funding)

2018 IDA inaugural issuance

1967 $1 billion in loans outstanding



Presenter

Presentation Notes

Through its 57-year history, IDA grew from just under a billion in funding in 1960 to almost a thousand projects totaling just under $100 billion under implementation today. In the past, IDA funding was coming from its shareholders. Last year, IDA’s shareholders agreed to significantly scale-up IDA’s financing to support its member countries in achieve the Sustainable Development Goals. As agreed with the shareholders, to expand its lending and development impact, IDA will be issuing bonds, starting in 2018.


How Does IDA Financing Work? Introduction

Low-cost financing

Capital Markets

New loan products

NEW

Grants

Interest, fees, loan repayments

Projects in Member

CountriesIDA

Shareholders

Interest, fees, loan repayments

IDA issues bonds in the capital markets to scale up lending to member governments and boost development impact.

Presenter

Presentation Notes

How does IDA’s financing work? Every 3-years, IDA shareholders and borrowers assess IDA’s financial capacity – they decide on the development priorities, agree on the amount of financing for new lending and grants, and commit to additional contributions of equity to support the financing agreed every three years. Up to now, IDA has been providing financing to its clients using IDA’s equity resources only. As agreed with IDA shareholders last year, to scale up lending to member governments to boost the development impact, IDA will start issue its bonds in the capital markets. IDA’s new financial model is supported by introduction of new loan products and updated financial and risk management policies to protect bondholders.


Shared Quality, Experience, Governance

Introduction

Triple-A rated

Same teams manage funding programs, liquidity investments, capital adequacy, and credit and market risks

Same risk governance and oversight

Strong shareholder support

Diversified loan portfolio with strong repayment track record

Shared development goals

Legally separate entities

Separate capital structure

IDA benefits from IBRD’s 70-year track record as an issuer.

Presenter

Presentation Notes

While IDA will be a new issuer in the capital markets, it benefits from IBRD’s 70-year track record as an issuer. It has the same characteristics as IBRD: triple-A rating, same governance and oversight, strong shareholder support, diversified loan portfolio with strong repayment track record, and shared development goals. The same teams manage liquidity, investments, capital adequacy, credit and market risk and now the same team will manage its funding program. It is a separate legal entity from IBRD and has separate capital structure.


● Introduction


● Funding

● IDA at Work


IDA’s Balance SheetIn USD billions as of June 30, 2017

AssetsInvestments and Cash 32.5

Net Loans Outstanding 138.4

Receivables from Derivatives(b) 23.9

Other Assets 2.3

Total Assets 197.1

Liabilities and EquityShareholder Loans 3.7

Other Liabilities(a) 10.8

Payable for Derivatives(b) 24.1

Equity(c) 158.5

Total Liabilities and Equity 197.1a) Includes grant payables of $6.5 billion (grants approved but not yet disbursed). Grants are recorded as expenses in the income statement,

while donor funding for grants is recorded as paid-in capital due to voting rights provision.

b) Mostly swap payables and receivables; swaps are used for hedging purposes; interest rate swaps are reported on net basis; currency swaps are reported on gross basis (notional amount is reported for each leg of the swap in the respective currency, as they are settled).

c) Contributions by IDA members are equivalent to paid-in capital in respect of other MDBs, so references herein to capital and capital adequacy refer to member contributions.

Financial Strength

Presenter

Presentation Notes

We will now turn to IDA financials. Here is the snapshot of IDA’s balance sheet as of June 30, 2017. What we would like to highlight here is the fact that IDA’s equity is virtually unleveraged, the loan portfolio (~$140bn) has been fully equity-funded to date. You may notice that IDA has been reporting losses in their income statements. This is due to the fact that grants that IDA provides to its poorest client countries are recorded as expense through the income statement, while donor contributions that funds those grants are recorded as equity since donors get voting rights for their contributions. This asymmetry in reporting is based on the accounting principles. There is no impact on equity, since grants are fully compensated by donor contributions.


Risk Management FrameworkFinancial Strength

Capital Adequacy IDA’s main measure of capital adequacy is Deployable Strategic Capital (DSC) which is based on a solvency framework: $60.4 billion (37%) of capital available for future commitments.

Quality Loan Portfolio IDA benefits from Preferred Creditor Status and has a global well-performing loan book.

Prudent Risk Management IDA has the same governance structure for risk management as IBRD and benefits from the experience the World Bank Treasury, risk and corporate finance units have built up over 70 years.

Liquidity IDA’s liquid assets cover more than 24 months of projected net outflows in liquid assets.

Strength of Member Support

Consistent equity increases resulting in exceptionally strong capital base with equity at $158.5 billion.

Presenter

Presentation Notes

The strength of IDA’s balance sheet is based on the prudent risk management policies, track record of loan repayments and strong shareholder support. Here is the snapshot of the key elements of IDA’s risk management framework, we will go through all of them in details.


Capital Adequacy Framework

Financial Strength

• To protect IDA’s financial strength and triple-A rating, IDA uses “economic capital” framework.

• IDA conservatively estimates all potential losses for all of IDA’s activities and assets. The amount of potential losses represents the minimum capital required to support the current portfolio.

• IDA then holds actual capital above that minimum plus a ”conservation buffer”.

• The strength of IDA’s capital adequacy is measured by the Deployable Strategic Capital (DSC) ratio, representing the capital available over and above capital needed to support the current portfolio plus a buffer.

Capital Adequacy

Quality LoanPortfolio

Prudent Risk Management

Liquidity Strength of Member Support

Minimum$85.7

Buffer $16.2 Actual$162.3

0

20

40

60

80

100

120

140

160

180

USD

bill

ions

Risk-Adjusted Capital(as of June 30, 2017)

DSC (37%)

Presenter

Presentation Notes

To support the new model, IDA has developed a new capital adequacy framework. It is based on the economic capital or solvency model and aimed to ensure that IDA holds sufficient capital against credit, market and operational risks covering all IDA’s activities and assets on its books. What exactly does it mean? First, IDA conservatively estimates all potential losses for all IDA’s activities and assets. This amount of potential losses represents the minimum capital required to support the current portfolio. IDA then holds actual capital (total equity plus loan loss provision) above that minimum plus a ”conservation buffer”. The strength of IDA’s capital adequacy is measured by the Deployable Strategic Capital ratio, that represents available capital above and beyond capital needed to support the current portfolio, or “excess capital”. According to IDA’s capital adequacy policy, IDA will be managing its lending activities to maintain the DSC ratio above 0%. It currently stands at 37% (or about $60 billion). Governance process is established to ensure that DSC ratio stays above zero. If the DSC ratio approaches or falls below 0% (but above negative 10%, i.e. within the “conservation buffer”), Management is required to propose the plan to rectify the situation within the 3-months period, or the new lending will be suspended. No new loans will be approved if the ratio falls below negative 10%.


Quality Loan Portfolio

• Preferred creditor treatment (PCT): clients prioritize obligations to IDA; PCT recognized by rating agencies and financial markets.

• Policy of freezing new lending and disbursements on all outstanding loans if there are late payments.

• IDA borrowers are IDA shareholders.

• All projects undergo a strict due diligence process.

• Lending terms based on income level and debt sustainability.

• Lending limited by the capital requirements as defined by the DSC, to support a triple-A credit rating.

• Single Borrower Limit set at 25% of equity or $40 billion as of June 30, 2017.

• Global diversification.

Financial Strength

24.4

13.7

13.1

12.3

7.5

0

5

10

15

20

25

30

35

40

USD

billi

ons

Top 5 Country Exposures for IDA(as of June 30, 2017)

Single Borrower Exposure Limit (SBL)

Capital Adequacy




Presenter

Presentation Notes

The strength of IDA’s balance sheet is supported by the quality of IDA’s loan portfolio. IDA enjoys preferred creditor status that is evidenced by the track record of loan repayments to IDA and is supported by a number of policies: The loan repayments are reinforced by the policy of freezing new lending and disbursements on all outstanding loans if there are any late payments. All IDA projects undergo strict due diligence process before loans are approved. Note also that IDA is a cooperative of the member countries: all IDA borrowers are IDA shareholders, i.e., have vested interest to ensure financial sustainability of the institution. Lending terms are tailored to countries’ income level and debt sustainability. Lending volumes to specific countries are based on performance indicators. Overall lending volumes are limited by the capital requirements, but also by the agreed financing package (plan) for the replenishment. Capital requirements are more of a longer-term consideration. IDA has also implemented a single borrowing limit, which is set at 25% of IDA’s equity ($40 billion as of June 30, 2017) – none of IDA’s borrowing countries are currently near the limit. (The largest exposure is to India with ~18% of IDA’s equity). IDA’s loan portfolio is well diversified, IDA operates in countries in all regions and variety of sectors.



• IDA benefits from World Bank’s 70 years of capital market experience.

• IDA’s governance structure for risk management is the same as IBRD’s.

• The same teams manage IDA’s and IBRD’s bond issuance program, risk management and asset-liability and liquidity management operations.

• Market risks are prudently managed and well capitalized to protect IDA’s triple-A rating.

Long-term ratingOutlook: Stable

Long-term ratingOutlook: Stable

Aaa AAA

Financial Strength

• IDA follows an ALM policy of matching the interest and currency sensitivity of its assets and liabilities to protect its equity from market rate movements.

Capital Adequacy




Presenter

Presentation Notes

IDA has a track record of prudent financial and risk management policies over the 57-year history. It shares the same governance structure for risk management with IBRD. The same financial professionals are responsible for managing IDA’s bond issuance, asset-liability and liquidity management operations.


Liquidity

• IDA is required to keep liquid assets to cover at least 24 months of projected net outflows.

• Portfolio is conservatively managed against strict guidelines.

• Eligible investments are highly rated fixed income securities rated AA- or better for governments and agencies, and AAA for corporates and ABS (same as IBRD).

Financial Strength

27.5 28.3 28.429.9 29.7

0

5

10

15

20

25

30

35

FY13 FY14 FY15 FY16 FY17

USD

bill

ion

Liquid Assets (as of the End of Each Fiscal Year)

Capital Adequacy




Presenter

Presentation Notes

IDA follows conservative liquidity policy – IDA has to hold liquidity to cover at least 24 months of net outflows. Actual liquidity holdings about $30 billion at the beginning of this fiscal year exceed this requirement. This excess liquidity provides additional flexibility. Similar to IBRD, IDA’s investment portfolio is conservatively managed against strict guidelines. Liquid assets are invested in highly rated fixed income securities.


Strength of Member Support

Capital Base• As of June 30, 2017, IDA’s equity was $158.5 billion.

• IDA’s equity has consistently increased since 1960 with regular payments from shareholders.

• IDA has the highest capital base of its peer group.

Largest ShareholdersPercentage of votes, as of June 30, 2017

Financial Strength

United States 10.2

Japan 8.5

United Kingdom 6.2

Germany 5.5

France 3.8

-

25

50

75

100

125

150

175

FY17FY10FY00FY90FY80FY70FY60

USDbillions IDA’s Equity

$158.5 B

$0.9 B

Capital Adequacy




- 25 50 75

100 125 150 175

IDA ADB IBRD IADB IFC EBRD AFDB

USD billions

Total Equity (in comparison to its peers)

Presenter

Presentation Notes

IDAs equity has consistently increased since 1960 through the regular contributions to IDA’s capital, resulting in the strongest paid-in capital base of any MDBs.


● Introduction


● Funding

● IDA at Work


Why Invest? Financial Strength

• $158.5 billion in equity as of June 30, 2017 – largest among IDA’s peer group.

• Rated AAA/Aaa based on strength of capital adequacy, liquidity, conservative financial policies and member support.

• 0% Basel risk weighting minimizes capital requirements.

Diverse Bond Product Offerings

Purpose

Funding

Presenter

Presentation Notes

Why invest in IDA? IDA offers a safe, financial sound investment. It has largest equity its peers – roughly $160 billion as of June 30, 2017. IDA’s equity on its own as big as all other MDBs combined. Its triple-A rating was based on its strong capital adequacy, ample liquidity, conservative financial policies and member support. It has also received zero BIS risk weighting that minimizes capital requirements. It also offers diversified bond products and allows for investments with purpose.


Funding

• Inaugural bond issued in April 2018.

• World Bank Treasury manages the funding program to achieve the best sustainable value and offer investors a broad mix of products.

• Transactions could range from large, liquid benchmarks to smaller, more customized issues for specific investor groups.

• Annual funding volumes and products will depend on IDA’s financing needs and market conditions.

IDA’s Funding Strategy

Presenter

Presentation Notes

IDA will begin to issue bonds in the global capital markets starting in the IDA18 Replenishment. This is part of the IDA18 strategy to expand IDA’s funding sources beyond donor contributions to scale up its lending operations. The World Bank’s seasoned treasury team will manage IDA’s borrowing program. Funding program will be managed to achieve the best sustainable value. IDA will offer investors a broad mix of products. Bonds will be offered to institutional as well as retail investors, with transactions ranging from large, liquid benchmarks to smaller, more customized issues for specific investor groups. In terms of the volume, IDA is estimating to issue up to $3 billion in the next year and a half – before the end of IDA’s next fiscal year, i.e. June 2019. The program will gradually increase to over $10 in per year by 2014. The exact timing will depend on a number of factors including IDA’s funding needs and the prevailing market conditions. We plan to optimize the momentum and outreach efforts of the first issuance with the timing of subsequent IDA bonds.


Funding

Global and Medium-Term Notes (MTNs) Program:

• Diversity of products in different maturities and currencies.

• Pricing and other bond details:

Bloomberg: IDAWBG <Govt> <Go> or IDAWBG <Go>

Global Bill Program:

• Issuance of short-dated multi-currency global notes through the Global Bill Program.

• Maturity of overnight to one year in various currencies.

IDA’s Borrowing Programs

For more information: [email protected]

Presenter

Presentation Notes

IDA’s borrowing program will consist of two programs. Global and Medium-Term Notes (MTNs) and Short-term Commercial Paper Program.


Inaugural Bond: Investing for ImpactDebut generated 130 orders from investors in 30 countries for a USD 1.5 billion 4.6 times oversubscribed 5-year benchmark.

Funding

Allocation by Type of InvestorsAllocation by Geography

Pension/ Insurance

25%

Banks24%

Central Banks/ Official

Institutions43%

Asset Managers

8%

Asia34%

Europe34%

Americas23%

Middle East & Africa

9%

Summary Terms and Conditions Issuer rating: Aaa /AAAFormat: 144A/RegSMaturity: 5-yearAmount: US$1.5 billionSettlement date: April 24, 2018Maturity date: April 24, 2023Coupon: 2.75% p.a.Coupon dates: Semi-annual: October 24 and April 24 each yearIssue price: 99.357%Issue yield: 2.889%Listing: Luxembourg Stock ExchangeClearing systems:

DTC, Euroclear, Clearstream

Joint leads: Barclays, BNP Paribas, JP Morgan, NomuraSenior co-leads: Citi, Deutsche Bank, ICBC, SEB, TD SecuritiesJunior co-leads: BofA, Merrill Lynch, BMO Capital Markets,

Commerzbank, Crédit Agricole CIB, Daiwa Capital Markets, DZ Bank, Goldman Sachs International, HSBC, ING, Morgan Stanley, Natixis, NatWest Markets, RBC Capital Markets, Scotiabank, Société Générale CIB, Standard Chartered Bank, Wells Fargo

USD 1.5 billion 5-year USD Benchmark

Presenter

Presentation Notes

The order book was oversubscribed with a total of $4.6b in demand. The bond was upsized from $1 billion to $1.5 b.


● Introduction


● Funding

● IDA at Work


Investing for Impact Global development impact: 75 countries; broad range of sectors;

one of the most effective ways to help countries achieve the Sustainable Development Goals.

Unique mandate, technical expertise, and resources to respond to complex global challenges and provide financial support to some of the fastest-growing economies.

Investments bring positive spillovers, especially in areas affected by conflict and fragility, contributing to global growth and security.

Long-term partnership: emphasizing long-term growth and capability to ensure sustainability of results.

IDA at Work

Presenter

Presentation Notes

We would like to conclude our presentation by giving you some flavor of what IDA does. We have discussed that IDA offers a financially sound investment. It also offers a unique opportunity to invest with purpose for global impact. IDA invests in 75 countries globally, in a broad range of sectors. With its unique mandate, technical expertise and significant resources it offers the most effective way to help some of the fastest growing countries around the world to achieve the Sustainable Development Goals. Those investments bring positive spillovers contributing to global economic growth and security. IDA’s work is built on a long-term partnership with countries, focusing on long-term growth and ensuring sustainability of results.


Impact: Track RecordLeader in transparency, openness and accountability: first multilateral to establish performance-based management of resources and to adopt a results measurement framework.

57-year track record of results.

For example, results in fiscal years 2011-2017 included the following:

602 million people received essential health services

30 million pregnant women received prenatal care from a health provider

8 million teachers were recruited and/or trained

72 million people received access to improved water sources

134,000 kilometers of roads were constructed, rehabilitated or upgraded

250 million children were immunized

IDA at Work

Presenter

Presentation Notes

IDA has been recognized as one of the leaders in transparency, openness and accountability. The unique feature of IDA’s impact results is that they are very tangible: given the strong interest to monitoring results from IDA donors, IDA has built robust infrastructure around monitoring and reporting on results achieved. Here are some selected results of IDA’s investments with its member countries achieved in the past 7 years. .


IDA at Work

Towards 2030: Investing in Growth, Resilience and Opportunity

Climate change

Gender & development

Governance & institutions

Jobs &economic

transformation

Fragility, conflict &violence

Presenter

Presentation Notes

For the next 3-year commitment period, IDA shareholders agreed on the overall strategy focusing on investing in growth, resilience and opportunity with the five special themes to deepen focus and results in critical areas in IDA borrowing countries. The targeted focus on these themes will help support development in fragile situations, address climate change, promote gender equality and development, and strengthen governance and institutions to enhance resilience of IDA countries and spur growth. They will also promote economic transformation and jobs, with a strong emphasis on quality infrastructure, including energy, to promote private sector development to create jobs.


How Does IDA Select Projects?

• Address country priorities

• Contribute to the goals of ending extreme poverty and promoting shared prosperity

• Address social, environmental and governance aspects

• Achieve expected outcomes

Projects follow the World Bank Project Cycle.

IDA at Work

Presenter

Presentation Notes

How does IDA select projects for financing? Projects undergo a thorough selection and due diligence process, same as for the IBRD. We work with the countries to assess their priorities and development goals and prepare country partnership framework – a 5-year financing plan. Governance process, and supervision and implementation policies are the same as for IBRD. Projects have to contribute to the World Bank goals of ending extreme poverty and promoting shared prosperity. Similar to IBRD, there is a strong focus on social, environmental and governance aspects. As discussed earlier, progress towards achieving project stated outcomes and results is being regularly monitored and verified.


IDA’s purpose is to end extreme poverty and promote shared prosperity.

IDA bonds will offer sustainable investment opportunitiesto expand IDA’s development activities.

IDA’s AAA/Aaa rating is based on its strong balance sheet and equity, its conservative financial policies and risk management, as well as the support from 173 member countries.

IDA’s funding program will offer investors a broad range of products ranging from benchmark bonds to tailor-made notes designed to suit specific investor needs.

Summary

Presenter

Presentation Notes

In conclusion, we would to leave you with the following key points above IDA: As part of the World Bank Group, IDA shares the purpose to end extreme poverty and promote shared prosperity IDA bonds will offer sustainable and financially sound investment opportunities to expand IDA’s development activities, IDA’s triple-A rating is based on its strong balance sheet and equity, its conservative financial policies and risk management, as well as the strong support from its 173 member countries IDA’s funding program will offer investors a broad range of products – from benchmarks to tailor made notes designed to suit specific investor needs.

27

AnnexIDA at Work


Project Examples

By Themes

Jobs and Economic Transformation

Fragility and Conflict

Gender and Development

Climate

Governance and Institutions

Outline

By RegionsSouth Asia


IDA Financing: $102 million

Selected Target Results

• 92% increase in irrigated rice production (average yield per hectare)

• 98 km of rural and 460 km of non-rural roads rehabilitated

• 58,800 people in rural areas with access to an all-season road

Development Challenge

Climate change is making Madagascar increasingly vulnerable to natural disasters such as cyclones and droughts which hamper development efforts: • Over 4 million Malagasy live in zones at risk of

flood and cyclone. • In 2014 and 2015, cyclones damaged more

than 40,000 hectares of rice fields, destroyed dams and rendered most dirt roads and trails unusable and dangerous.

• These disasters devastate staple crops like rice and jeopardize food security.

Solution

With support from IDA, Madagascar is adapting irrigation infrastructure to preserve agriculture, the lifeblood and source of employment for 90% of the population.

Ensuring Food Security and Preserving Jobs by Building Climate Resiliency in Madagascar

Climate

Presenter

Presentation Notes

Climate change is making Madagascar increasing vulnerable to natural disasters such as cyclones and droughts which hamper development efforts. These disasters, which devastate staple crops such as rice, significantly jeopardize the country’s food security. With support from IDA and financing of $102 million, Madagascar is adapting irrigation infrastructure to climate change to preserve agriculture, the livelihood of 90% of the population.


IDA Financing (indicative): $150 million

SolutionA joint IDA/IBRD project for 6 countries currently under preparation will support West African countries to improve the management of shared natural and man-made risks affecting targeted coastal communities.

The program will be a mix of technical assistance and investments, and will work to crowd-in private sector investors to participate in the project and scale-up the intervention to $2 billion, to improve livelihood of coastal communities and reduce risk to millions of people.


West Africa’s coastal areas are home to about one-third of the region’s population that is growing four percent each year. The coast account for 56% of the region’s GDP, hosts major cities, ports, agro-industries, fisheries, offshore petroleum exploration and production.

Unsustainable infrastructure development, inadequate management of natural habitats and resources, and pollution threaten the productivity of coastal ecosystems. Climate change-related events such as sea-level rise, storm surge, and increased coastal flooding add to the vulnerability of the region.

• Coastlines are eroding as much as 10 meters per year in some areas, while fisheries are often overexploited

• Less than 10% of urban areas have access to sewage services

• 20-30% of mangroves have been lost to degradation

Building a Resilient West African Coastal Community

Climate

Presenter

Presentation Notes

In West Africa, we are building a program that can support West African countries to strengthen the resilience of coastal communities to climate and other hazards. Called the West Africa Coastal Areas management program, it could support up to 17 West African countries to improve the management of shared natural and man-made risks affecting targeted coastal communities. The program, with its mix of technical assistance and investments, is aimed at crowding-in private sector participation to improve livelihood of coastal communities and reduce risk to millions of people.



Selected Target Results:• 14,000 girls (ages 14-18 years old) enrolled in

secondary school• 75,000 women (ages 19-64 years old)

benefitting from entrepreneurship programs• 50% of women participating in savings groups• 650 community volunteers trained as trainers


Poverty remains high in Zambia, particularly in rural areas. Including women and girls is a key part of the government’s plan to reduce poverty and the vulnerability of the poor: • Women’s educational attainment is very low

and keeping girls in school at higher grades remains a challenge

• >90% of women in rural areas are involved in informal agricultural employment; 45% are unpaid

• Most women farm only at subsistence levels and are not productive enough to sustain viable agribusinesses

Solution

With support from IDA, the government is working to increase access to livelihood support and secondary education for disadvantaged women and adolescent girls in rural areas.

Supporting the Education of Poor Girls and Livelihoods of Vulnerable Women to Boost Growth and Productivity in Zambia

Gender & Development

Presenter

Presentation Notes

In Zambia, IDA supports government efforts to increase access to secondary education for women and adolescent girls in rural areas to boost growth and productivity.



Selected Results:• Tender processing time down from 51 to 29 days• 18,000 bidders registered, a 35-fold increase• 32,000 government tenders, valued at about

$3.7 billion processed online


Every year, the government of Bangladesh spends around $10 billion dollars on public procurement, a major part of its annual development program. In the past, no uniform regulatory framework for procurement existed, creating challenges:

• Inefficiencies and inappropriate use of funds reportedly cost the country over 1.5% of GDP growth a year.

• Outdated, lengthy, confusing and complex bureaucratic processes made public procurement cumbersome.

Solution

With support from IDA, Bangladesh introduced systematic changes to transform its public procurement environment, including a transformational electronic government procurement (e-GP) system. It has reduced contract processing time, increased competition, and enhanced transparency. As a result, the cost of doing business and risk of collusive practices has decreased substantially.

Improving Transparency of Public Procurement in Bangladesh

Governance & Institutions

Presenter

Presentation Notes

In Bangladesh, IDA helps the government introduce systematic changes to its public procurement environment, leading to decrease in cost of doing business, increased competition and enhanced transparency.



Selected Target Results:• 10,000 beneficiaries employed; 25% women• 30% of trained beneficiaries find jobs and

stay employed one year after training ends• Reduced social benefits application

processing times from 7 to 3.5 months


Bosnia and Herzegovina ranked close to the top on spending on social assistance at 3.3% of GDP –more than twice the average for Eastern and Central Europe. Cash transfers were not reaching the poor and most vulnerable. Changes were needed to:• strengthen benefits administration and oversight

to ensure delivery to most vulnerable• support those who are at risk, but not eligible for

benefits, with job training and employment services.

Solution

Through the Social Safety Nets and Employment Support Project, over 11,400 people – 47% are women – no longer eligible for social benefits found work through a program linking employers with potential employees. 68% of the employees hired as a result of this project were still working at the same job 18 months after receiving assistance. This is a testament to the program’s effectiveness in bridging the labor gap and creating lasting employment opportunities.

Linking Job-Seekers to Jobs and Improving Safety Nets in Bosnia & Herzegovina

Jobs & Economic Transformation

Presenter

Presentation Notes

In Bosnia, IDA is working with the government to create lasting employment opportunities.



Selected Target Results:• 35,500 beneficiaries reached; 34% women• All 71 districts of the country covered• 1.4 million days of work gained• 2,840 kms of roads repaired


CAR is one of the poorest and most fragile countries in the world. The conflict, which began in 2012, shattered its already-frail economy, tore its social fabric, and created a devastating humanitarian, human rights, and security crisis. • 25% of the population was displaced: 1 million

internally; 200,000+ in neighboring countries• Infrastructure, including schools and

healthcare centers, were destroyed• Public wages were suspended

Solution

The LONDO (“Stand Up”) project facilitated peacebuilding and stabilization by providing short-term jobs to men and women across the country. The project also promoted entrepreneurship among beneficiaries who each received a brand new bike and were encouraged to save part of their salaries in order to start a business once their work shift was over.

Bringing Stability and Growth to the Central African Republic with Jobs

Fragility & Conflict

Presenter

Presentation Notes

In Central African Republic, IDA supports the government to bring stability and growth through creating job opportunities and promoting entrepreneurship.


IDA Financing: ~$70 billion over the last 20 years

Selected Results:• 6 million kids brought back to school in

Afghanistan, including increased girls’ participation from less than 200 thousand to 2.7 million

• Improved access to electricity for 16 million people in Nepal

• 1 million people living in 1,000 communities received support through 3,200 community infrastructure projects in Sri Lanka

• Vocational training provided to 4,400 young women in Nepal leading to employment and economic independence

Development Challenges:

• Region with 23.7% of total world's population, had 32.4% share of world's poorest in 2013.

• Continued urbanization combined with poor infrastructure: o more than 200 million live in slums,o about 500 million go without electricity

• Childhood stunting: 42% of the world’s stunted kids

• Fragility and challenges of forced displacement• Climate-related and environmental threats are

on the rise

Solution:

Strategy linked to drivers of sustained and inclusive growth:• Support private sector development, and

climate-resilient investments• Greater social and financial inclusion• Strengthening governance and addressing

fragility

Helping Support Growth and Stability

IDA at Work in South Asia

Presenter

Presentation Notes

In South Asia countries, the region with over 30% of the world’s poor population, IDA’s cumulative investments of over $70 billion in the last 20 years supported growth and stability, by bringing 6 million kids back to school, increasing girls’ participation in school from 200 through to almost 3 million in Afghanistan, providing vocational training to women in Nepal.

36

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Documents

Impact Investing with IDA - World Bankpubdocs.worldbank.org/.../ida-investor-presentation.pdfThis presentation is focused on IDA as an i 猀猀甀攀爀 渀漀琀 漀渀 愀渀礀

Impact Investing with IDA - World Bankpubdocs.worldbank.org/.../ida-investor-presentation.pdfThis presentation is focused on IDA as an i 猀猀甀攀爀渀漀琀漀渀愀渀礀