Through global capital markets, IBRD and IDA mobilize finance for our client countries. As Bank operations scaled up to address the COVID-19 pandemic in fiscal 2020, we raised exceptional levels of funding and worked to manage risks while continuing to deliver advisory services to clients. By quickly disbursing loans and grants to support emergency projects, we helped countries cope with the health, economic, and social impacts of the pandemic. We also have robust business continuity arrangements in place to ensure that our disbursements continue without disruption to help countries meet their development challenges.
In addition to raising funds for IBRD and IDA, the Bank’s Treasury manages over $184 billion in assets for IBRD, IDA, and MIGA, as well as for 76 clients—including central banks, public pension funds, sovereign wealth funds, and international financial institutions—as well as annual cash flows of over $7.6 trillion in 125 currencies in 138 countries.
Mobilizing capital markets and sustainable finance to support countries
IBRD has mobilized finance for client countries for over 70 years, raising nearly $1 trillion since its first bond in 1947. In fiscal 2020, IBRD raised $75 billion through its triple-A rating and strong standing in the markets to support the Bank’s mandate and help clients manage risk and build resilience. In April 2020, in support of our efforts to help countries address COVID-19, IBRD raised $15 billion through sustainable development bonds over a three-day period, including a five-year $8 billion bond—the largest ever issued by a supranational.
IDA supports the world’s poorest countries, many of which face severe challenges from COVID-19. In fiscal 2020, IDA issued $5 billion. This year saw debut issuance in additional currencies, such as the British pound sterling (GBP), euro, and Swedish krona (SEK). IDA also has a triple-A rating and continues to expand into new markets.
Increasing development impact through sustainable development bonds and technical assistance
We help pioneer financial tools that expand markets and provide the financing needed to undertake the world’s most difficult development challenges. By issuing sustainable development bonds, we support the financing of a variety of priorities in line with our mission to end extreme poverty and reduce inequality. These bonds also help develop local capital markets, especially in low-income countries. In January 2020, we issued our first IBRD bond denominated in Rwandan francs, providing international investors with an opportunity to gain exposure to the country’s growing economy through its currency. It is the seventh Sub-Saharan African currency for IBRD.
Sustainable development bonds offer investors an opportunity to earn a financial return while making a positive impact, communicating their sustainable investment priorities, and supporting global development objectives. In May 2020, we published the first-ever Sustainable Development Bond Impact Report. It covers all IBRD bond issuances and is a key part of our efforts to engage market participants while adhering to strong transparency and disclosure standards.
In April 2020, to raise awareness about countries’ health programs and our support for their efforts to respond to COVID-19, IBRD issued a two-year SEK 11.5 billion benchmark and a three-year GBP 1.5 billion benchmark to global investors.
IBRD bonds are also helping raise awareness about food insecurity, a global challenge exacerbated by COVID-19. In September 2019, IBRD issued bonds totaling $500 million that will support Bank lending, including $4.6 billion to combat food loss and waste, as well as strengthen infrastructure, expand access to markets and logistics, and improve waste management. These efforts totaled $1.7 billion in issuance in fiscal 2020.
As one of the largest issuers of green bonds, IBRD supports climate-relatedprojects while helping investors support development solutions that address climate change. We also help countries build green bond markets to demonstrate leadership on sustainability and climate action. Since issuing the world’s first labeled green bond in 2008, we have raised $14 billion through 165 transactions in 22 currencies. In November 2019, we issued a 20-year Danish kroner (DKK) 3 billion green bond—the first green bond denominated in DKK and the longest-maturity green bond issued by a sovereign, supranational, or agency issuer in the Danish market.
We provide technical assistance to subnational and sovereign issuers in emerging markets, including Colombia, Indonesia, Kenya, and Malaysia. We also published the Guide on Developing a National Green Taxonomy to promote sustainable finance in emerging markets; conducted surveys of issuers and investors on environmental, social, and governance issues; and hosted workshops to facilitate dialogue between sovereign issuers and investors. We also help financial sector regulators implement reforms for greener financial systems, including climate stress testing for the banking sector, as well as environmental, social, and governance disclosure and reporting frameworks for institutional investors.
Through initiatives such as the Joint Capital Market Program, the Bank Group is delivering technical assistance to help emerging market and developing economies deepen their capital markets and mobilize private capital in local currency, so that they can increase funding for strategic sectors including infrastructure, housing, agriculture, and small and medium enterprises.
Managing disaster risks through global capital markets
The Bank’s disaster risk insurance platform helps member countries manage risks related to natural disasters, including pandemics, through insurance and capital markets transactions. In November 2019, we issued catastrophe bonds that will provide the Philippines with $225 million of insurance cover for earthquakes and tropical cyclones for three years. It was the first catastrophe bond sponsored by an Asian sovereign and listed on an Asian stock exchange, as well as the first World Bank bond on the Singapore Exchange.
We have supported Mexico’s catastrophe bond program since it began in 2005. In March 2020, we issued four tranches of catastrophe bonds for the country’s Natural Disasters Fund, attracting 38 investors globally and providing $485 million of insurance cover against earthquakes and hurricanes for four years. This is Mexico’s largest and longest-ever catastrophe bond transaction; it brings the total disaster risk transactions facilitated by the Bank for member countries to nearly $5 billion.
Building human capital in public sector asset management
The World Bank Treasury’s Reserve Advisory and Management Partnership delivers demand-driven capacity building and asset management services to official sector asset managers. It helps central banks, pension funds, and sovereign wealth funds build human capital and strengthen operations through advisory missions, technical workshops, and global conferences.
Demand for the program continues to grow—it now serves 75 institutions, including nine in low-income countries and seven in countries in fragile and conflict-affected situations. In fiscal 2020, it released its second biannual survey on central bank reserve management practices, highlighting the progress made by central banks in governance and risk management.