Trust Fund Initiatives

Cofinancing

Trust Fund Highlights

Trust funds are financial and administrative arrangements* that facilitate grant funding of high-priority development needs, including technical assistance and advisory services, debt relief, post-conflict transition, and cofinancing. Trust funds help leverage poverty reduction programs by funding key due diligence activities for development operations, promoting innovative approaches, forging partnerships, and expanding the scope of development collaboration.

In fiscal 2001:^†

• Total contributions expanded significantly, with increased donor support for the Heavily Indebted Poor Countries (HIPC) Initiative, a new Japan Social Development Fund (JSDF) to help poor and vulnerable groups hurt by crisis, a trust fund for the Federal Republic of Yugoslavia, and major technical assistance and cofinancing projects.
• Contributions totaled $2,719 million, comprising $1,450 million from bilateral donors, $1,225 million from multilateral donors, and $44 million from private sector and nongovernmental organizations.
• Major contributions were provided by the European Community ($757 million), the World Bank Group ($422 million), Japan ($277 million), and the Netherlands ($235 million).
• Contributions to ongoing, global programs financed by Japan and the Netherlands included $93 million for the JSDF, $59 million for the Japan Policy and Human Resources Development (PHRD) Fund, and $60 million for the Bank-Netherlands Partnership Program.
• Disbursements totaled $1.85 billion with $988 million attributable to three large programs: HIPC, the Global Environment Facility and the PHRD Fund.

* Trust funds are accounted for separately from the Bank’s own resources and are defined through formal agreements between the Bank, external donors, and the recipients who receive grant funding.

† The financial information presented for the trust fund portfolio reflects reporting on an accrual basis for contributions to the Heavily Indebted Poor Countries (HIPC) Trust Fund, and reporting on a cash basis for contributions to all other trust funds. The differential between contributions reported on an accrual and cash basis totaled $536 million in fiscal 2001,($16) million in fiscal 2000, $233 million in fiscal 1999, and $80 million in fiscal 1998. Disbursements for all trust funds, including the HIPC Trust Fund, are reported on a cash basis.

Trust-Funded Initiatives for Climate Change and Post-Conflict Reconstruction

The Prototype Carbon Fund (PCF), established with the objective of mitigating climate change, aims to promote sustainable development, demonstrate the possibilities of public-private partnerships, and offer a "learning-by-doing" opportunity to stakeholders. PCF emphasizes renewable energy and energy efficiency projects that have potential for replication and for reducing climate change at a reasonable cost. PCF investments will be made in transition economies and developing countries following the emerging framework of the Kyoto Protocol for its Joint Implementation and Clean Development Mechanisms, respectively. By October 2000, the PCF had subscribed capital of $145 million from 17 corporate and 6 public sector participants. See www.PrototypeCarbonFund.org.

Trust funds increasingly support reconstruction and transition in post-conflict countries and regions. Bank-financed trust funds provide credits (on IDA terms) and grants to nonmember countries to support demobilization, help rebuild economies, and develop key institutions. The Bank has catalyzed additional external donor assistance to increase development impact in post-conflict situations. Special Bank credits and grants for the West Bank and Gaza, East Timor, Kosovo, and the Federal Republic of Yugoslavia totaled nearly $500 million in recent years, leveraged by an additional $1 billion in grants from the larger donor community.