TMCnet News
WORLD BANK GROUP: World Bank Group Support Grows in Fiscal 2008 amid Food and Financial Crisis(M2 PressWIRE Via Acquire Media NewsEdge) RDATE:16092008 WASHINGTON -- World Bank Group commitments grew in fiscal 2008 by 11 percent to US$38.2 billion as finance was rapidly approved to help the poor in the food crisis and support grew for the job-creating private sector. World Bank Group commitments Fiscal years 2008 and 2007 (year ends June 30) World Bank Group FY08* FY07* IBRD 13.5 12.8 IDA 11.2 11.9 IFC 11.4+ 8.2+ MIGA 2.1 1.4 TOTAL 38.2 34.3 *Billions of U.S. dollars +Own account only. Excludes $4.8 billion in FY08 and $3.9 billion in FY07 mobilized from syndications, structured finance The World Bank Group commitments in the 2008 fiscal year, ending June 30, were made in the form of loans, grants, equity investments and guarantees to assist people and private businesses in its member countries, with Africa receiving the highest level of support. The funding - up $3.9 billion from fiscal year 2007 - is being used in 694 projects, designed to overcome poverty and boost growth through practical plans to enhance the business and investment environment and empower poor people. "In a year that saw rising food and fuel prices become the harsh new reality, the $38.2 billion provided by the World Bank Group to developing countries helps create development solutions so people can have the opportunity and means to improve their lives," said World Bank Group President Robert B. Zoellick. A highlight of the fiscal 2008 year was the Bank Group's response to the food price crisis. It created a $1.2 billion rapid financing facility with the first grants approved in FY08 for Djibouti ($5 million), Haiti ($10 million), and Liberia ($10 million). More funds have subsequently been approved in the current financial year. These funds were directed at expanding school feeding programs, child-mother programs, and increasing people's access to seeds and fertilizers, among other areas. The Group's private sector arm, IFC, pursued a market-driven strategy in response to the food crisis. In FY08, IFC invested $1.4 billion along the agribusiness supply chain to boost production, increase liquidity in supply chains, improve logistics and distribution, and increase access to credit for small farmers. Overall, World Bank Group commitments came from the International Bank for Reconstruction and Development (IBRD), which provides financing, risk management products, and other financial services to members; the International Development Association (IDA), which provides interest-free loans and grants to the world's 78 poorest countries; the International Finance Corporation (IFC), which provides loans, equity investments, guarantees and advisory services to private-sector business in developing countries; and the Bank Group's political risk insurance agency, the Multilateral Investment Guarantee Agency (MIGA). IDA commitments were $11.2 billion in FY08 as the remainder of the expiring IDA14 replenishment was disbursed. The funding, including $8.0 billion in credits and $3.2 billion in grants, supported 199 operations in the world's 78 poorest countries, 39 of which are in Africa. Donors committed to a record 15^th replenishment of IDA at a meeting in Berlin in December--$41.7 billion for FY09-FY11--a vote of confidence on the value of Bank assistance to the world's poorest people. IBRD commitments totaled $13.5 billion for 99 operations, up from $12.8 billion the previous year. IBRD revamped its financial services during the year by reducing loan prices, extending maturities and launching new contingency loan products. IFC, the largest provider of multilateral financing for the private sector in the developing world, stood out among the World Bank Group institutions because of its strong performance. In FY08, IFC financing for private sector development increased by 34 percent to $16.2 billion, which included $4.8 billion mobilized through syndications and structured finance. Fiscal 2008 was the first year in which IFC's commitments for its own account, and of financing resources it mobilized from the private sector, exceeded those of IBRD, the original institution in the World Bank Group. Projects in IDA countries account for more than 40 percent of IFC's 372 investments in FY08. The results of IFC's investments are reflected in the 1.9 million jobs that client companies provided in 2007, as well as the $54.3 billion in local purchases of goods and services that these firms made. IFC's clients generated power for nearly 147 million customers in developing countries and distributed water to 18 million consumers. "In a time of uncertainty in world markets, we have stepped up investments and advisory services in the least developed economies and sectors, and we continue to strengthen the foundation for sustainable private sector development across the globe," said Lars Thunell, IFC Executive Vice President and CEO. MIGA had an exceptional year as it celebrated its 20^th anniversary, issuing $2.1 billion in guarantees, a 50 percent increase over last year. "MIGA's ability to promote foreign direct investment, particularly into the poorest countries, held up strongly in the face of global financial uncertainties. This year also saw innovations in product offerings such as guarantees for Islamic finance structures and projects mitigating the effects of climate change," said James Bond, MIGA Acting Executive Vice President and CEO. Financial commitments provided by the World Bank Group to the countries of sub-Saharan Africa--still the Bank's top priority--stood at $7.3 billion in FY08. These commitments included $5.7 billion from IDA, or slightly more than 50 percent of total IDA commitments; $1.4 billion from IFC, $218 million in MIGA guarantees for projects in the region, and $30 million from IBRD. IFC also expanded the number of countries in Sub-Saharan Africa where it does business from 17 to 25. CONTACT: Amy Stilwell, World Bank Group Tel: +1 202 458 4906 e-mail: [email protected] Geetanjali Chopra, World Bank Group Tel: +1 202 473 0243 e-mail: [email protected] Camille Funnell, TV/Radio, World Bank Group Tel: +1 202 458 9369 e-mail: [email protected] WWW: http://www.worldbank.org ((M2 Communications Ltd disclaims all liability for information provided within M2 PressWIRE. Data supplied by named party/parties. Further information on M2 PressWIRE can be obtained at http://www.presswire.net on the world wide web. Inquiries to [email protected])). Copyright ? 2008 M2 Communications Ltd. |