World Bank Group's Approaches to Mobilize Private Capital for Development
                                       An IEG Evaluation

                                       Report to the Board from the
                                   Committee on Development Effectiveness ∗

                                             Meeting of September 16, 2020

        The Committee on Development Effectiveness (CODE) (“the Committee”) met to consider the
report entitled World Bank Group's Approaches to Mobilize Private Capital for Development: An IEG
Evaluation (CODE2020-0037) and Draft Management Response (CODE2020-0044).

        The Committee welcomed the evaluation, commending IEG for the diagnostic, methodology,
comprehensiveness and quality of the report. Members noted the relevance and timeliness of the topic given
the context of discussions on the Forward Look and capital package implementation, as well as the
challenges posed by the COVID-19 crisis on external financial flows towards developing countries.
Acknowledging members’ concern on Management’s disagreement and partial agreement on the
recommendations, IEG and Management agreed to engage in order to understand Management’s
challenges, present the case more clearly and ensure ownership of the recommendations. Members asked
for regular updates to the Board, with the Chair suggesting an update to the Board in 4-6 months, subject
to WBG’s Management readiness. Members acknowledged that the new Management Action Record
(MAR) process would also serve as a platform for the Board to learn the progress made towards
implementing the recommendations.

         While encouraged to learn that the WBG approaches were found to be relevant and mostly effective
to meet the expectations and priorities of client countries and investors, members acknowledged there was
room for improvement. They called for the WB to give greater priority to scale up its Private Capital
Mobilization (PCM) efforts and the cascade approach, with the objective of meeting the capital package
commitments, as well as to help client countries advance towards meeting the Sustainable Development
Goals (SDGs). Management noted IEG’s findings that IBRD can realistically meet its corporate target of a
25 percent mobilization ratio on average by 2030 and that management is committed to meeting that goal.
Noting Management’s explanations on how decentralization and training opportunities for Country
Management Units could help advance the PCM agenda, members highlighted the need to differentiate by
sector and by country, with some encouraging to move further towards IDA countries and pay more
attention to domestic PCM and local capacity building.

        Members agreed with the recommendation on testing pilot instruments and encouraged
Management to come up with innovative approaches and instruments to extend the reach and impact of
development finance. They underscored the importance of Country Private Sector Diagnostics (CPSD) to
create a more positive environment for cascading PCM targets, and suggested to enhance cooperation
between the WBG institutions. Acknowledging Management’s remarks on the relevance of collaborating
with other Multilateral Development Banks to create the right markets, members asked for clarifications on
differences in measurement, challenges to improve the collaboration and whether the presence of bilateral
Development Finance Institutions improved project performance. Members looked forward to the future
evaluation on catalyzation approach to capital mobilization, to complement this evaluation.

         Members were pleased to learn about IFC exceeding its core mobilization targets and meeting client
expectations. They agreed with IEG’s recommendation that the positive results could be consolidated by
improving product alignment with investors’ needs, while maintaining goals, procedures and
Environmental and Social standards. Members acknowledged Management’s explanations that IFC's
efforts need to be calibrated and delivered within the specific regulatory and operating environment of
different asset classes and investor groups, and that such efforts and further product development are not a
simple process.

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    This report is not an approved record.