IBRD

IDA

Where Do IBRD's Profits Go?

Financial &
Operational Results

IBRD Financial Results

IBRD Operations

IDA Operations

Where the World Bank Got Its Money in Fiscal 2001

• In fiscal 2001 IBRD raised $17 billion, before swaps, at medium- to long-term maturities, in international debt capital markets. Borrowings and shareholder equity fund IBRD’s loans and investments.
• The year’s funding volume was above that of fiscal 2000, after peaking in fiscal 1998 due to above-average demand for financing.
• IBRD’s financial strength is based on the support it receives from its shareholders and on its array of financial policies and practices.
• IBRD issued debt in nine currencies and in a wide range of maturities and structures in fiscal 2001. Diversification helps lower borrowers’ funding costs and expands IBRD’s investor base.

International Development Association

• IDA donors come together every three years to decide on the amount of new resources required to fund IDA’s future lending program and to discuss lending policies and priorities.
• Fiscal 2001 was the second year of the 12th Replenishment of IDA. IDA-12 is designed to provide IDA with resources to fund credits committed during the period July 1, 1999, to June 30, 2002.
• Nearly 40 countries are IDA donors. Donor nations include not only industrial countries but also developing and transition countries—some of them IBRD borrowers and former IDA borrowers—such as Argentina, Brazil, Hungary, the Republic of Korea, the Russian Federation, and Turkey.
• IDA’s financial strength is based on the strong and continued support of its donors as well as reflows.

Where Do IBRD’s Profits Go?

IBRD’s net income serves several purposes related to its mission:

• A portion of net income is retained annually to ensure IBRD’s financial integrity. The General Reserve allows IBRD to assume credit risk in lending to countries at the lowest funding costs—which in turn benefits borrowers. Income retention has enabled IBRD to maintain financial soundness through periods of deteriorating loan quality as well as surging loan demand.
• Support to IDA has consistently been a priority. Over the last five years, $1.6 billion (or about 22 percent of IBRD net income) has been transferred to IDA.
• Support for the Heavily Indebted Poor Countries (HIPC) Initiative has also been important. Over the last five years transfers to the HIPC Trust Fund have amounted to a total of $900 million, averaging about 12 percent of annual IBRD net income.
• IBRD’s net income helps meet other developmental needs from time to time. It enables IBRD to respond to unforeseen humanitarian crises and provide grants or other support for worthy causes. IBRD also regularly shares income with its borrowing members through partial waivers of the interest and commitment fees it contractually charges on its loans.
• Financial strength and standing in the markets allow IBRD to leverage its equity by five times in the international bond markets. This leverage increases IBRD’s ability to lend for developmental activities.