fund for the poorest
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INTERNATIONAL DEVELOPMENT ASSOCIATION
The World Banks
POORESTFORTHE
FUND
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This publication is a product of the
Development Finance
Vice Presidency of the World Bank
1818 H Street, N.W.Washington, D.C. 20433
www.worldbank.org/ida
www.facebook.com/ida.wbg
www.youtube.com/worldbank
October 2014
Photography:
Cover, Arne Hoel/World BankWalking to school, Ghana.
p.3, World BankBefore and after shot showing the impact of the Coastal Cities Environmental Sanitation Project in Vietnam.
p.4, Simone D. McCourtie/World BankCommunity meeting in Aurangabad, India.
p.5, Stephan Bachenheimer/World BankChildren in Liberia receive school feeding as part of the Banks Global Food Crisis Response Program.
p.6,Arne Hoel/World BankSolar panels enable Bangladeshi children, Shati and Towhid, to study at night.
p.7, Bill Lyons/World BankStudents taking year-end exams at Kardi School i n Sanaa, Yemen.
p.8, Jonathan Ernst/World BankWinston Mills-Compton teaches a class in mathematics at the Mfantsipim Boys School in Cape Coast, Ghana.
p.9, Dang Thanh LanWorkers in Vietnam fight erosion by building a secure corridor at Mui Ne beach in Binh Thuan Province.
p.10, UNICEFSomali drought refugees receive education, vaccinations, and food in the refugee camps in Daddab, Kenya.
p.12, Jonathan Ernst/World BankWorkers maintain the thermal power station in Takoradi, Ghana.
back cover,Arne Hoel/The World BankHydro power plant in Ghana; Simone D. McCourtie/World BankFemale farmer showcasing her agricultural products in Maharashtra, India.
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Who We Are
The International Development Association (IDA)
is the part of the World Bank that helps the worlds
poorest countries. Established in 1960, IDA aims to
reduce poverty by providing loans (called credits)and grants for programs that boost economic
growth, reduce inequalities, and improve peoples
living conditions.
IDA complements the World Banks origi-
nal lending armthe International Bank for
Reconstruction and Development (IBRD).
IBRD was established to function as a self-
sustaining business, and provides loans
and advice to middle-income and credit-
worthy countries. IBRD and IDA share the
same staff and headquarters and imple-
ment and evaluate projects with the same
rigorous standards.
IDA is one of the largest sources of assis-
tance for the worlds 771poorest coun-
tries, 39 of which are in Africa, and is the
single largest source of donor funds for
basic social services in these countries.
IDA-financed interventions bring positive
change to 2.8 billion people, the majority
of whom survive on less than $2 a day.
1 India graduated from IDA at the end of FY14 but will receive
transitional support on an exceptional basis through the IDA17
period (FY15-17).
3.5millionTeachers recruited and/or
trainedmore than four
times the number of primary
and secondary school teachers
in France. (From 20022012)
597million+Children immunized
equivalent to 6.5 times
the number of children in
the United States. (From
20032013)
123millionPeople received access to an
improved water source. For
every $1 invested in water
and sanitation, $8 is returned.
(From 20022012)
By the NumbersKey IDA achievements
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IDA lends money on concessional terms.
This means that IDA credits have a zero or
very low interest charge and repayments are
stretched over 25 to 38 years, including a
5- to 10-year grace period. IDA also provides
grants to fragile and conflict-affected states,
and other countries at risk of debt distress.
In addition to concessional loans and
grants, IDA provides significant levels of
debt relief through the Heavily Indebted
Poor Countries (HIPC) Initiative and the
Multilateral Debt Relief Initiative (MDRI).
Since its inception, IDA has supported
activities in 112 countries. Annual commit-
ments have averaged about $18 billion over
the last three years, with about 50 percent
of that going to Africa. For the fiscal year
ending on June 30, 2014, IDA commitments
reached $22.2 billion spread over 242 new
operations. 12 percent of the total was com-
mitted on grant terms.
What We DoThe worlds poorest countries are often
unable to attract sufficient capital to
support their urgent development needs
and therefore rely on official aid flows as a
critical source of funding.
IDA is a multi-issue institution, supporting
a range of development activities, such as
primary education, basic health services,
clean water and sanitation, environmental
safeguards, agriculture, business climate im-
provements, infrastructure, and institutional
reforms. These projects pave the way toward
equality, economic growth, job creation,
higher incomes, and better living conditions.
For the period July 1, 2014June 30, 2017
(IDA17), IDA operations will place a special
emphasis on four thematic areas: climate
change, fragile and conflict-affected coun-
tries, gender equality, and inclusive growth.
Many of the issues developing countries
face do not respect borders. By helping
address these problems, IDA addresses
security, environmental and health
concerns, and helps prevent these threats
from becoming global issues.
Because donor contributions to IDA are
pooled together, IDA is able to leverage
a large un-earmarked capital base to
respond to critical country needs, particu-
larly during times of crisis and in difficult,
fragile environments.
IDAs operational work is complemented by
analytical studies that support the design of
policies to reduce poverty. IDA advises gov-
ernments on ways to broaden the base of
economic growth and protect the poor from
economic shocks.
IDA also coordinates donor assistance to
provide relief for poor countries that can-
not manage their debt-service burden, and
has a system for allocating grants based on
countries risk of debt distress, designed to
help countries ensure debt sustainability.
IDA places a premium on development
impact and is regarded as a transparent,
cost-effective platform for achieving results.
(Read about results measurement below.)
In the period 20032013, for example, IDA
financing immunized more than 597 million
children; provided access to health services
for 117 million people; and helped 195 mil-
lion women receive prenatal care.
Visit us online to learn more about what we
do and see what donors and others say
about us at www.worldbank.org/ida,
facebook.com/ida.wbg,and
www.youtube.com/worldbank.
By the NumbersKey IDA achievements
between 20002010
2million+Classrooms built or rehabilitated
benefiting over 105 million
children per year.
33millionMosquito nets purchased and/or
distributed to prevent malaria.
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@WorldBank IDA-nanced projects deliver positive
change for 2.8bn peoplemost of whom survive on less
than $2 a day. Discuss on Twitter: #AidEffectiveness
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How Does IDA Work?
IDA funding and voice.IDA is overseen by
its 173 shareholder countries, which com-
prise the Board of Governors. The day-to-day
development work of IDA is managed by Bank
operational staff, and governments and imple-
menting agencies in the program countries.
While the IBRD raises most of its funds on
the worlds financial markets, IDA is funded
largely by contributions from the govern-
ments of its member countries. Additional
funds come from IBRD and the International
Finance Corporation, IFC ($3.2 billion in
IDA17), and from borrowers repayment of
earlier IDA credits ($14.3 billion in IDA17).
The most recent replenishment of IDAs
resources (IDA17) was finalized in Decem-
ber 2013, resulting in a record replenish-
ment of $52.1 billion to finance projects over
the three-year period. Donor contributions
represent the largest share of IDA funding,
accounting for 65 percent in IDA17 ($34.1
billion).
Donors and borrower country representatives
hold replenishment meetings every three years
to agree on IDAs strategic direction, financ-
ing, and allocation rules in an open and trans-
parent process. IDAs capacity for learning,
adaptation, and innovation is grounded in this
unique governance process.
The replenishment process typically consists
of four formal meetings held over the course
of one year. In addition to officials from the
now 50+ donor governments (known as IDA
Deputies), representatives of borrowing
member countries are invited to participate
to help ensure that IDAs policy framework is
responsive to country needs.
Policy papers discussed during the replenish-
ment negotiations are disclosed to the public,
and the draft replenishment agreement is
posted on the web for public comment prior
to the last replenishment meeting. IDA staff
also engages with civil society organizations
(CSOs) around the world on an ongoing basis.
Eligibility for IDA support depends first and
foremost on a countrys relative poverty,defined
as gross national income (GNI) per capita below an
established threshold and updated annually.
IDA also supports some countries, including several
small island economies, which are above the
threshold but lack the creditworthiness needed to
borrow from IBRD.
Some countries, such as Vietnam and Pakistan, are
IDA-eligible based on per capita income levels, but are
also creditworthy for some IBRD borrowing. They are
referred to as blend countries.
Seventy-seven countries (plus India) are currently eligi-
ble to receive IDA resources. Together, these countries
are home to 2.8 billion people, half of the total popula-
tion of the developing world. An estimated 1.8 billion
people there survive on incomes of $2 or less a day.
See the list of current IDA borrowers at
www.worldbank.org/IDA/
borrowers.
IDA Borrowers
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How IDA funds are allocated.IDA
borrowing countries have very significant
needs for concessional financing. But the
amount of funds available, which is fixed
once contributions are pledged by donor
governments, is below what countries need.
IDA must therefore make decisions about
how to allocate limited resources among the
eligible countries. (See box on borrowers.)
Funding decisions are based on a set of
agreed criteria, including countries income
levels and performance record in managing
their economies and ongoing IDA projects.
To be eligible for funds, countries must first
meet the following criteria:
Relative poverty defined as GNI per
capita must be below an established
threshold (updated annually). In fiscal
year 2015, this was $1,215.
Lack creditworthiness to borrow on
market terms.
Countries are then assessed to determine
how well they implement policies that
promote economic growth and poverty
reduction. This is done through the Country
IDA is able to leverage a large capital
base to respond to country needs
during times of crisis #FoodCrisis
#FinancialCrisis #DisasterResponse
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Policy and Institutional Assessment. This
assessment and portfolio performance
together constitute the IDA Country Perfor-
mance Rating. In addition to the rating,
population and per capita income also
determine IDA allocations. These ratings
are disclosed on IDAs website:
www.worldbank.org/ida.
IDA donors and the World Bank in the IDA17
Agreement also recommended that sub-
Saharan Africa remain a priority and receive
at least 50 percent of IDA funds, as warranted
by their performance.
Lending terms.Terms of lending vary for
the different members of IDA, reflecting
their income levels and debt status. As a
result of discussions and reviews conducted
during IDA17, IDA adjusted the lending
terms for IDA-only countries, resulting in a
slight hardening of terms (shorter maturity
and a straight line amortization schedule),
while still maintaining a degree of conces-
sionality.
In 2012, IDA was hailed as a global
aid transparency leader by Publish
What You Fund #OpenDev
#AidEffectiveness #IATI
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In Yemen, 39,000 girls attended school as a result of
conditional cash transfer schemes introduced by IDA in
2008 and 2009 #GirlsEducation #ThinkEqual
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IDA has had a rigorous results measurement system in
place for over 10 years #AidEffectiveness #Value4Money
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How Do We KnowIDA Works?
For more than a decade, IDA has been mea-
suring its role in helping countries grow and
reduce poverty and informing donors about
the effectiveness of their contributions. The
Results Measurement System (RMS) for
IDA16 uses an integrated results and per-
formance framework to show aggregated
results across IDA countries. It assesses
IDAs contribution to development results,
and is linked to the Millennium Development
Goal framework. It also shows whether IDA
is managing its operations and services
effectively and is functioning efficiently.
The RMS framework groups indicators into
four tiers. The first two tiers track aggregate
country development results and IDAs
contribution to these development results.
The other two capture elements of perfor-
mance against agreed IDA16 performance
standards in an IDA Report Card. The
four tiers are: (1) IDA Countries Progress;
(2) IDA-Supported Development Results;
(3) IDA Operational Effectiveness; and (4) IDA
Organizational Effectiveness.
The RMS supplements the more-detailed
project, country, and sector results data
previously available and complements quali-
tative overviews conducted at the country,
sector, thematic, and project levels.
The Future of IDA
Todays fiscal environment presents
challenges for all those involved in develop-
mentfrom borrowing countries to donors
to CSOs. Additional challenges also need
to be addressed, including with respect to
climate change, fragile states, gender
equality, and the need to ensure everyone
benefits from growth. And while a number
of countries are expected to exceed IDAs
per capita income threshold in the next
decade, it is also clear that these countries
will continue to be home to millions of poor
people who will still need extensive support.
The overarching theme for IDA17
Maximizing Development Impactcalls
for IDA to do more to deliver integrated
solutions for IDA countries by leveraging
private investment, public resources, and
knowledge in a more results-oriented and
cost-effective way. The special themes for
IDA17inclusive growth, gender, climate
change, and fragile and conflict-affected
statesaddress the key bottlenecks to
broad-based growth and
the long-term fundamentals for robust and
sustainable development.
By the NumbersKey IDA achievements
from 20002010
300millionTextbooks purchased and/
or distributed15 times the
number of books in the New
York Public Library.
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IDA is providing nutrition, health, and sanitation services
for more than half a million drought refugees living in
settlements along the Somali border in Kenya and Ethiopia.
#CrisisResponse #SocialSafetyNet
IDA continues to undergo an extensive
renewal in the face of evolving global and
country challenges. We are continuously
engaged with donors and borrowers in explor-
ing ways to address issues such as IDAs
financial sustainability, fragility, and results.
The challenge is to keep the world engaged
in the global aspiration to end extreme pov-
erty and to ensure that aid dollars are used
as efficiently as possible.
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IDA more than doubled investment in renewable energy and
energy efciency during 2009-2010 #ClimateAdaptation
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For more on IDA, visit: www.worldbank.org/idaor www.facebook.com/ida.wbg
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The World Banks Fund for the Poorest I IDA
1818 H Street, N.W.
Washington, D.C. 20433
USA
www.worldbank.org/ida
www.facebook.com/ida.wbg
www.youtube.com/worldbank