World Bank commits $115bn to development in FY22 2022

The World Bank Group commitments, including short-term finance, mobilisation and recipient-executed trust funds, rose to $115 billion in the fiscal year 2022, indicating $5.3 billion or 5 per cent higher than the financial year 2021 (FY21).

A significant portion of the FY22 commitments supported measures addressing the impact of global overlapping crises, food insecurity, increasing fragility and conflict as well as climate change.

This is contained in the World Bank Group-approved audited financial statements for the fiscal year ended June 30, 2022, an unprecedented fiscal year, where the Bank Group responded to multiple crises.

According to the World Bank Group President David Malpass, “World Bank Group support to client countries increased to $115 billion over the last fiscal year.

“The results reflect strong demand for financing from our client countries, continued backing from our shareholders and capital markets, and our strong financial position.”

The financial statements are accompanied by the Management’s Discussion and Analysis of financial results for the four World Bank Group institutions.

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The institutions are; the International Bank for Reconstruction and Development (IBRD), which provides loans and advice to middle-income countries; the International Development Association (IDA), the World Bank’s fund for the poorest and most vulnerable; the International Finance Corporation (IFC), the Bank Group’s private sector arm, and the Multilateral Investment Guarantee Agency (MIGA), whose mandate is to help drive impactful foreign direct investment to developing countries.

Key highlights by institution of the financial statements show that IBRD’s net commitments increased 8 per cent to $33.1 billion in FY22, the highest annual amount in a decade, while gross disbursements increased 19 per cent to $28.2 billion.

FY22 Commitments to lower-middle-income countries represented 50 per cent of the total and considering loan repayments, net disbursements were $14.9 billion in FY22.

IBRD’s loan portfolio increased to $227.1 billion, representing 4 per cent growth from the prior year, and its net investment portfolio was $82.1 billion as of June 30, 2022, compared to $85.8 billion a year earlier, with the liquid asset portfolio remaining well above the prudential minimum liquidity level.

From the report, IBRD raised medium- and long-term market debt of $40.8 billion during FY22, taking the total borrowings to $235.2 billion as of June 30, 2022, and the funds raised financed development lending, supported liquidity, and were used to replace maturing debt.

The equity to loans (E/L) ratio, IBRD’s capital adequacy measure, was 22.0 per cent, 0.6 per cent lower than a year ago, as the increase in total exposures outpaced the increase in usable equity.

IBRD’s reported net income was $4.0 billion in FY22, compared to net income of $2.0 billion in the prior year, primarily due to the unrealized mark-to-market gains on IBRD’s non-trading portfolios.

Allocable income, the measure that IBRD uses for net income allocation decisions, was $0.8 billion, $0.4 billion lower than the previous year, which was primarily attributable to the increase in the provision for loan losses and other exposures driven mostly by the increase in the implied forward rates.

The allocable income was used to augment reserves and support development activities including transfers to IDA.
IDA

To meet the heightened financing needs for IDA resources, and with strong support from its shareholders, IDA’s Twentieth Replenishment (IDA20) was advanced by one year, starting in FY23.

The financing envelope of $93 billion over the three-year replenishment period, FY23-FY25, is supported by $23.5 billion in member contributions.

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World Bank commits $115bn to development in FY22 2022

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World Bank commits $115bn to development in FY22 2022