IDA19 Retrospective Responding to Multiple Crises on the Road to 2030: Growth, People, Resilience FY21 — FY22 Executive Summary 2 Executive Summary Executive Summary This Retrospective reviews the 19th Replenishment of After the immediate COVID-19 response, IDA the International Development Association (IDA19). Participants and Management came together to With $23.5 billion in donor contributions, the $82 billion endorse historic adjustments to IDA19 to meet the IDA19 replenishment was initially designed to accelerate needs of IDA countries in crisis. These adjustments bol- progress toward the Sustainable Development Goals stered the pandemic response, while retaining IDA’s core (SDGs). IDA Participants held their final Replenishment commitments. For the first time in IDA’s history, and citing Meeting in December 2019, when the first signs of an IDA’s uniquely effective platform, stakeholders endorsed impending global pandemic were barely discernable. a recommendation to launch the IDA replenishment one The context soon changed dramatically, and the World year early, shortening the IDA19 cycle from three to two Health Organization (WHO) declared the novel corona- years. The adjustments made an additional $16 billion virus (COVID-19) a global pandemic on March 11, 2020, available to aid IDA countries’ responses to COVID-19 just months before IDA19 was set to begin. in FY21 and FY22. The IDA19 financing envelope was adjusted from $82 billion to $71 billion, with $11 billion During the cycle, the World Bank Group (WBG), in- transferred to IDA20. The overall structure of IDA’s Results cluding IDA, responded rapidly and at scale as part- Measurement System (RMS) and the policy commitments ner countries grappled with the consequences of (PCs), agreed in support of IDA19’s five Special Themes, COVID-19. On March 3, 2020, the Board of Executive was retained. To better reflect the compressed imple- Directors endorsed the WBG’s urgent action to support mentation period and new priorities, expected ranges/ IDA and IBRD countries’ responses to COVID-19. The values for 16 of 20 Tier 2 RMS indicators, and targets for Board agreed to establish a WBG Fast Track COVID-19 15 of 44 PCs were also adjusted. Facility (FTCF) with financing from IDA, IBRD and the International Finance Corporation (IFC) for health re- IDA provided record new commitments of $75 bil- sponses and vaccines that ultimately reached $34 billion. lion to help countries address urgent needs while 3 Executive Summary delivering on longer-term development priorities. essential health, nutrition, and population (HNP) services. Average annual commitments increased sharply, and And IDA delivered $25.4 billion in climate finance. Sixty total commitments over the two-year period were nearly percent of this funding, or $15.2 billion, supported ad- equivalent to the commitments made in the three-year aptation, a marked contrast to the estimated 7.5 percent IDA18 cycle. Undisbursed balances as a share of the of global climate finance dedicated to adaptation. Job active portfolio remained well within historical averages focused interventions and improved access to elec- despite the increased portfolio size, demonstrating both tricity and water benefitted tens of millions of people. implementation and absorptive capacity. Disbursements IDA also continued to invest in five Special Themes: over the two-year period totaled $44.1 billion, delivering Jobs and Economic Transformation (JET); Gender and tangible results for people in need. IDA’s surge enabled Development; Climate Change; Fragility, Conflict and partner countries to continue delivering essential ser- Violence; and Governance and Institutions (G&I), and vices and advancing development priorities, even as they systematically addressed priority issues of human capital, responded to COVID-19 and other challenges. In addi- debt, disability inclusion and technology, through newly tion, IDA’s $1.7 billion commitment to the Private Sector introduced Cross-cutting Issues. With considerable effort Window (PSW) mobilized $8.2 billion in investments from by clients and WBG staff, most of the policy commitment the IFC, the Multilateral Investment Guarantee Authority targets – about 80 percent – were either met or exceeded. (MIGA) and third parties to support private sector invest- Human capital receives special attention in this report, ments in IDA countries. given the impact of the pandemic in this area. Similarly, a Mid-Term Review (MTR) of the Sustainable Development IDA directed financing to areas of need. IDA con- Finance Policy (SDFP) accompanies this Retrospective, tinued to increase the share of funding delivered to reviewing IDA’s support for the increasingly important countries in Africa, which received 71 percent of com- area of debt sustainability. mitments ($53 billion) during the cycle. In line with the WBG Strategy for Fragility, Conflict and Violence (FCV), The cycle underscored valuable lessons about IDA’s IDA also increased the resources available to fragile and core strengths. IDA19 underscored IDA’s core strength conflict-affected situations (FCS), including through the in financing long-term priorities while promoting invest- newly introduced FCV Envelope. FCS countries received ments that respond to emerging global challenges. As a 41 percent of IDA19 commitments ($30.5 billion), nearly convening platform, IDA successfully engaged borrowing tripling the commitments for FCS countries relative to and donor countries to identify solutions, take meaning- IDA16. Commitments to small states also nearly tripled ful action, and track progress together to address global compared to IDA16, reaching record highs in IDA19 challenges that included the pandemic at the beginning ($2.5 billion). Most commitments were made through of the cycle and the economic consequences of Russia’s country allocations. IDA windows complemented the invasion of Ukraine in the final months of the two-year country allocations with supplemental finance for global period. The cycle demonstrated IDA’s capacity to de- priorities such as regional investments, crisis response, liver in difficult circumstances, including severe logistical investments for refugees and host communities, trans- challenges. formational investments and incentives for private sector investment. IDA employed its reallocation mechanism But IDA19 also exposed delivery challenges. The lack during the cycle to reallocate a total of $7.4 billion to fi- of pandemic preparedness in both IDA- and non-IDA nance priority areas and urgent needs such as COVID-19 countries at the time of the COVID-19 outbreak un- vaccination efforts, food insecurity and natural disasters. derscored that efforts to break the cycle of “panic and neglect” that followed previous viral outbreaks (such as Even against a backdrop of significant development SARS, Ebola, and Zika) were inadequate. Preparing the reversals in member countries, IDA delivered results world for the next outbreak will require intentionality and sustained progress on development priorities. even at times when no pandemic rages and other devel- IDA financing delivered results both in crisis response opment needs are urgent. Finally, over successive cycles, and in other priority areas, notably with respect to climate IDA has adopted an increasingly complex policy package change. IDA’s RMS tracked outcomes, demonstrating the and architecture. This has helped IDA target key devel- reach and scale of this effort. More than 170 million peo- opment gaps but can limit its flexibility to accommodate ple benefitted directly from IDA-supported safety nets. shifts in client demand, including in the face of unex- In FCS countries, more than 82 million people received pected emergencies. IDA19 amplified the challenge. 4 Executive Summary As it moves ahead, IDA will need to continue balancing This report highlights achievements and lessons from refinements to its policy package and architecture with the extraordinary cycle. The Retrospective is orga- the country leadership and flexibility that remain central nized around six sections. “IDA at a Glance” follows this to its operational model. Executive Summary and summarizes key data from the cycle. Chapter 1 reviews the context of IDA19, including Looking ahead, financing needs of IDA countries will the crises that bookended its implementation, and out- remain high. Progress eradicating extreme poverty and lines how IDA responded. Chapter 2 reports on results achieving the Sustainable Development Goals is off and policy commitments, offering illustrative examples of track, driven not only by the pandemic but by climate IDA at work. Chapter 3 describes how IDA’s architecture change and growing fragility, among other challenges. complemented country allocations with financing for key Many IDA countries are seeing reductions in public ex- priorities. Chapter 4 reflects on the emerging lessons penditures at a time when they need to invest more to from the cycle, including those that are shaping the on- recover lost ground. IDA countries increasingly face risks going implementation of IDA20. Appendices provide of debt distress and will continue to require substantial detailed reporting on IDA’s Results Management System, external sources of finance, including from IDA, as they policy commitments, and window financing. In initial dis- work to recover, rebuild, and achieve long-term devel- cussions about their interests and priorities for this report. opment goals. At the same time, as global public goods come into sharper focus, IDA will be expected to do even IDA Deputies expressed a strong interest in a more. IDA’s hybrid financial model has doubled the lever- Retrospective that reflected candidly on the Bank’s age of donor financial contributions since IDA17 and can experience of delivery during this exceptional cycle. continue to enhance contributions to future replenish- To respond to that interest, insights of task team leaders ments but cannot address all needs. IDA factors risks of (TTLs), World Bank Group staff who work closely with cli- debt distress into determinations of eligibility for grant ents to prepare and support the implementation of IDA- financing. Grant financing relies on donor contributions. financed operations, complement the reporting through- As risks of debt distress and fragility increase, grants as out the report. As front-line staff, TTLs had a close-up a share of IDA commitments have also risen over time, view of the WBG’s pandemic response. Together with increasing the importance of donor contributions. insights from IDA clients and beneficiaries, the TTLs’ ob- servations powerfully illustrate the unique experiences of implementing IDA19. 5 IDA19 - At a Glance IDA19 - At a glance Glance Overview 606 Credits $49.6 B $75 B 66% Total Grants $25.4 B Operations Total IDA19 34% Commitments1 Total IDA19 Commitments incl. the Private Sector Window $76.7 B 56 74 IDA-only and Gap countries 14 IDA Eligible Blend countries Countries 4 Others FY21 FY22 FY22 Fragile and Conflict-affected 34 32 Small States 21 Situations (FCS) Countries 3 Exceptional countries Moldova, Mongolia, Ukraine 0 IDA graduates 3 Reclassified countries Cambodia, Mauritania, Senegal 1. Throughout At a Glance, total commitments exclude the Private Sector Windows (PSW) unless otherwise noted. 2. Eritrea, Syrian Arab Republic, and Zimbabwe, that are in non-accrual status, and Myanmar due to suspension of operations. 3. FCS refer to countries on the World Bank Group Harmonized Lists of Fragile Situations in the corresponding fiscal years. 4. Small States refer to countries with population of 1.5 million or less (as of FY22, 21 IDA countries). 6 IDA19 - At a Glance Commitments By region and top 10 largest recipient countries AFE AFW SAR ECA EAP LAC MNA 40% 31% 16% 5% 4% 2% 2% $29.9 B $23.2 B $12 B $3.9 B $2.8 B $1.8 B $1.5 B 9. 1. 6. 10. 8. 7. 5. 3. 4. 2. Niger Nigeria Democratic Uganda Tanzania Mozambique Kenya Ethiopia Pakistan Bangladesh $2.8 B $5.3 B Republic of $2.5 B $2.8 B $2.9 B $3.6 B $4.4 B $4.0 B $5.0 B Congo $3.6 B By sector By financing windows Climate finance Social Sector Regional Window (Education, Health, Social Protection) $5.9 B 34%, $25.2 B Infrastructure (Energy, ICT, Transport, Water, Waste) Crisis Response Window $2.1 B $25.4 B Window for Host Communities Total IDA19 30%, $22.3 B climate finance & Refugees Public Administration 16%, $12.3 B $1.3 B Agriculture 10%, $7.4 B Scale-Up Window $3 B Industry, Trade & Services 6%, $4.6 B Private Sector Window Adaptation Financial Sector 4%, $3.3 B $1.7 B 60%, $15.2 B By lending instrument Disbursement Investment Project Financing (IPF) 74%, $55.5 B Development Policy Financing (DPF) 14%, $10.4 B $44.1 B Total IDA19 disbursement Program-for-Results (PforRs) $22.9 B $21.2 B 12%, $9.1 B FY21 FY22 7 IDA19 - At a Glance IDA19 Outcome Highlights (FY21-FY22) 60% of IDA19 climate finance used for adaptation Climate change 32 million tCO2eq/year anticipated reduction in greenhouse gas emissions 8 million female beneficiaries of job-focused interventions Gender 93% of IDA19-financed operations aimed at closing gender gaps 27 million beneficiaries of job-focused Jobs & economic interventions in IDA countries transformation 19 million beneficiaries reached with financial services 12 million people provided with new or improved electricity service in FCS Fragility, conflict & violence 82 million people have received essential health, nutrition, and population services in FCS 16 million people with access to improved water sources 170 million Human people benefitting from safety nets capital 24 million people with new or improved electricity service 114 million women and children receiving basic nutrition services Note: IDA19 RMS data includes FY21 and FY22 results 8 IDA19 - At a Glance IDA19 Financing Delivery Trends Figure ES 1. IDA increased as a share of total WB lending 80 54% 70 60 Commitments, US$ billion 50 40 30 20 10 14% 0 FY61 FY62 FY63 FY64 FY65 FY66 FY67 FY68 FY69 FY70 FY71 FY72 FY73 FY74 FY75 FY76 FY77 FY78 FY79 FY80 FY81 FY82 FY83 FY84 FY85 FY86 FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 IDA0 IDA1 IDA2 IDA3 IDA4 IDA5 IDA6 IDA7 IDA8 IDA9 IDA10 IDA11 IDA12 IDA13 IDA14 IDA15 IDA16 IDA17 IDA18 IDA19 IDA IBRD Replenishment average IDA’s share of total World Bank’s lending Figure ES 2. Figure ES 3. Total IDA19 commitments nearly the Significant increase in IDA19 financing from same as IDA18, despite shorter cycle pre-COVID-19 average commitment 90 40 37.7 +90% 80 35 Total IDA Commitments, US$ billion Total IDA Commitments, US$ billion 70 30 Pre-pandemic (FY13-FY19) Average commitment $20 B 25 60 20 50 75.0 36.1 76.4 15 30.4 40 22.2 24.0 54.6 21.9 10 19.0 19.5 30 53.3 14.8 16.3 16.2 44.8 5 20 32.6 0 10 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 IDA16 IDA17 IDA18 IDA19 0 Note: FY22 do not include four IDA19 projects that were approved in FY23 for IDA14 IDA15 IDA16 IDA17 IDA18 IDA19 $1.2b and make up a total IDA19 envelope of $75b (excluding PSW). 9 IDA19 - At a Glance Figure ES 4. Share of grants in IDA total commitments increased considerably in IDA19 due to heightened debt vulnerabilities during COVID-19 100 100% 80 80% Share of Grants, % US$ billion 60 60% 40 40% 34% 20 27% 20% 14% 13% 0 0% IDA16 IDA17 IDA18 IDA19 Grant Credit & Guarantee Share of Grants Figure ES 5. Leverage of donor contributions has nearly doubled since IDA17 80 60 x3.5 US$ billion x3.3 40 x2 83 75 52 20 26 23 24 0 IDA17 IDA18 IDA19 Partner Grant Contributions (Excl. MDRI) Total Replenishment Note: Donor contributions are in nominal dollar terms. IDA19 replenishment envelope increased from $82 (agreed replenishment amount) to $83bn, with the additional $1bn going towards exceptional Figure ES 7. financing for Ukraine operation. Share of IDA financing to Africa is increasing Figure ES 6. 100% Share of Total IDA Commitments, % Nearly a 6x leverage each IDA dollar spent 90% through Private Sector Window (PSW) 80% 10 70% x5.8 9.9 60% Leverage 8 50% 71% 64% 40% 50% 54% 49% 48% US$ billion 6 30% 20% 4 4.9 10% 3.3 0% 2 IDA14 IDA15 IDA16 IDA17 IDA18 IDA19 1.7 South Asia (SAR) Latin America & the East Asia & Caribbean (LAC) Pacific (EAP) 0 IDA- IFC & Other Private Total Middle East & Europe & Africa (AFR) PSW MIGA Funding Financing North Africa (MNA) Central Asia (ECA) 10 IDA19 - At a Glance Figure ES 8. Total IDA19 financing to FCS countries has nearly tripled since IDA16 Share of IDA commitments to FCS, % 35 41% 50% IDA commitments to FCS, US$ billion 30 40% 25 30% 20 30% 24.9 15 19% 17.6 20% 14% 10 8.0 10% 5 6.2 5.4 5.6 0 1.5 2.1 0% IDA16 IDA17 IDA18 IDA19 IDA windows PBA Share of total IDA commitments to FCS countries Figure ES 9. Steady progress in staffing in FCS countries 800 700 (in IDA staffing measure) Number of Staffs in FCS 738 600 650 500 400 300 200 100 0 July 2020 Q4 2022 Start of IDA19 End of IDA19 Note: The number of staffing in FCS countries, which was affected by the pandemic and political disruptions, has steadily increased to 747 in FY23 Q2. Figure ES 10. IDA financing to Small States in IDA19 is growing 3,000 4% 3.4% IDA commitments to Small States 2,500 3.0% Share of IDA commitments 513 3% to Small States, % 2,000 456 US$ million 1,500 2% 2,015 1.4% 1,819 1.2% 1,000 1% 207 309 500 446 481 0 0% IDA16 IDA17 IDA18 IDA19 PBA IDA windows Share of total IDA commitments to Small States 11 IDA19 - At a Glance Figure ES 11. Share of IDA Climate Finance has increased, providing more in grants 40 6 A 500% increase in grants to Commitments, US$ billion IDA countries in the last 6 years 5 Grants, US$ billion 30 4 20 3 37% 2 10 31% 14.3 17% 22% 31% 1 2.7 28% 32% 9.3 11.1 4.3 6.8 6.9 0 0 FY16 FY17 FY18 FY19 FY20 FY21 FY22 IDA climate finance Total IDA commitments IDA climate finance in grants Figure ES 12. IDA significantly scaled-up climate adaptation finance, leading other MDBs 8,000 IDA19 (FY21-22) Total Climate IDA Adaptation Finance $15.2B IADB 6,000 EIB US$ million AfDB 4,000 AsDB AIIB 2,000 EBRD IsDB - 2015 2016 2017 2018 2019 2020 2021 IDA17 IDA18 IDA19 Note: 2015-2021 data from Joint MDB Climate Finance Report shows adaptation finance in all economies where MDBs operate; World Bank IDA uses FY and MDBs use CY; IDA19 (FY21-FY22) total climate adaptation finance is $15.2B. However, the graph excludes IDA's FY22 data for comparable comparison with other MDBS which FY22 data are not yet available. Figure ES 13. While donor contributions remain stagnant, country-level actions from IDA countries for policy commitments have significantly increased Number of Country-Level Actions 29 1011 1000 28 x2 27 800 US$ billion 26 26 510 600 x2 25 248 400 24 23.5 24 120 23 x2 200 22 23 0 IDA17 IDA18 IDA19 IDA20 IDA Donor Contribution Country-Level Actions from Policy Commitments Note: Donor contributions are in nominal dollar terms. Country-level actions are those taken by IDA clients as part of country programs, as agreed in policy commitments. These typically include IDA support for investments, analytics, policy frameworks, or strategies. Policy commitments for which the number of country-level actions are uncertain (for example, 35% of infrastructure projects) and for co-benefits are counted as zero. IDA actions (for example, adjustments to Bank guidance) are counted as zero. 12 IDA19 - At a Glance Figure ES 14. More than 2/3 Investment Project Financing (IPF) share in total IDA19 commitments, reversing a declining trend 100 100% 84% Commitments, US$ billion 78% 68% 74% Share of total IDA 50 50% 19% 14% 12% 12% 4% 10% 13% 12% 0 0% IDA16 IDA17 IDA18 IDA19 Investment Project Financing (IPF) Development Policy Financing (DPF) Program for Result (PforR) Program for Result (PforR) Investment Project Financing (IPF) Development Policy Financing (DPF) Figure ES 15. Average disbursement increased in IDA19 compared to IDA18 25 82% 100% 80% 20 80% Share of IDA Total US$ billion 15 63% 64% 60% 10 40% 25% 23% 18% 15% 5 20% 0% 5% 12% 13% 0 0% IDA16 IDA17 IDA18 IDA19 Investment Project Financing Development Policy Financing Share of PforR Program for Results Share of IPF Share of DPF Figures ES 16. ES 17. The undisbursed balances as a share of the active portfolio remains well within average despite a significant increase in the size of the portfolio, which demonstrates IDA’s implementation capacity and IDA countries’ absorptive capacity 40 120 70% 63% 63% 63% Total Undisbursed Balances, US$ billion 60% 60% 60% Undisbursed Balances as Percent 58% 100 56% 57% 57% 56% 60% 30 of Project Portfolio 50% US$ billion 80 20 40% 60 99 30% 10 91 40 76 70 70 20% 54 53 55 60 20 43 46 0 10% FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 0 0% FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 IDA16 IDA17 IDA18 IDA19 IDA16 IDA17 IDA18 IDA19 IDA Commitments IDA Undisbursed Balance IDA Disbursements Undisbursed Balances as Percent of Project Portfolio 1818 H Street NW Washington DC 20433 202-473-1000 ida.worldbank.org