Annual Report 2023

Letter from the IFC Board

Photo of IFC Executive Directors

Seated (left to right): Erivaldo Gomes, Brazil | Cecilia Nahon, Argentina | Ayanda Dlodlo, South Africa | Dominique Favre, Switzerland | Junhong Chang, China, Co-Dean | Koen Davidse, The Netherlands, Dean | Khalid Bawazier, Saudi Arabia | Adriana Kugler, United States | Matteo Bugamelli, Italy | Ernesto Acevedo, Mexico | Takashi Miyahara, Japan | Lene Lind, Norway.
Standing (left to right): Wempi Saputra, Indonesia | Parameswaran Iyer, India | Mansour Alshamali, Kuwait | Michael Krake, Germany | Katharine Rechico, Canada | Roman Marshavin, Russian Federation | Velavan Gnanendran, United Kingdom | Il-Young Park, Korea | Hayrettin Demircan, Türkiye | Naveed Baloch, Pakistan | Abdoul Salam Bello, Niger | Arnaud Buissé, France.
Absent: Floribert Ngaruko, Burundi

Over the past year, the World Bank Group Executive Directors have engaged with World Bank Group leadership about persisting global crises and the urgent need for approaches to restore progress toward the Sustainable Development Goals. More than 574 million people are projected to be living in extreme poverty by 2030, most of them in Africa. More broadly, nearly half the world — over 3 billion people — lives on less than $6.85 per day. Spillover effects from the COVID-19 pandemic, Russia’s invasion of Ukraine, and extreme climate events are among the major issues on which the Executive Directors led World Bank Group interventions to support countries, including a focus on opportunities for women and young people. From July 2022 to June 2023, support from the World Bank Group for developing countries totaled $122.9 billion, including $38.6 billion from IBRD, $34.2 billion from IDA, $43.7 billion (including mobilization) from IFC, and $6.4 billion in guarantees from MIGA.

At the Annual Meetings in October 2022, Development Committee members asked the World Bank Group to review its vision, mission, and operating and financial models to enhance the institution’s capacity to respond to global challenges. In response, the World Bank Group created the Evolution Roadmap, with the aim of better addressing the scale of challenges facing the world today. The Roadmap provides a basis for World Bank Group management and the Board to discuss priorities for the institution’s evolution and begin to implement collective reform.

Led by the Boards of Executive Directors in partnership with management, the Evolution Roadmap gained momentum this year. At the 2023 Spring Meetings, Governors at the Development Committee commended the World Bank Group for identifying measures to increase financial capacity by roughly $50 billion over the next 10 years and discussed priorities to further strengthen the institution for the next phase of the Roadmap process ahead of the October 2023 Annual Meetings in Marrakech.

The important work of the Evolution comes as the World Bank Group continues to respond at record pace, scale, and impact to help countries address compounding crises and increasingly complex development challenges. In April 2022, the World Bank Group outlined the Global Crisis Response Framework, which focused on responding to food insecurity, protecting people and preserving jobs, boosting resilience, and strengthening policies, institutions, and investments to build back better. Between April 2022 and June 2023, the World Bank Group provided unprecedented crisis financing of $171.6 billion, including $53.1 billion from IBRD, $51.8 billion from IDA, $57.6 billion from IFC, and $9.1 billion in guarantees from MIGA.

In addition to its impact on food security, Russia’s invasion of Ukraine has exacerbated trends in energy access, international trade, and other major sectors. Recognizing the invasion’s potentially long-term consequences, the Board approved several operations to help restore and improve access to essential health care, provide financial protection for the Ukrainian people, and repair Ukraine’s energy infrastructure. To date, the World Bank Group has mobilized over $37.5 billion in emergency financing for Ukraine, including IBRD and IDA loans, IBRD loans guaranteed by partners, donor grants, short and long-term IFC financing, and MIGA guarantees.

Climate action remains a crucial global priority. The Executive Directors welcome the efforts the World Bank Group has made as the world’s largest multilateral provider of climate finance for developing countries by mobilizing more public and private finance. The Executive Directors are encouraged that, in addition to work combining country diagnostics, policy advice, financing, and scalable mechanisms to mobilize funding, the World Bank is on track to align 100 percent of new operations with the goals of the Paris Agreement from July 1, 2023. For IFC and MIGA, 85 percent of new operations will be aligned starting July 1, 2023, and 100 percent from July 1, 2025.

The world witnessed devastating natural disasters this year that caused tragic losses of life and widespread destruction. The earthquakes in Türkiye are among the most recent events to which the World Bank Group has responded. The Executive Directors continue to recognize the hardships encountered in fragile and conflict-affected situations around the world, including the challenges and complexities of migration, as discussed in this year’s World Development Report. The Executive Directors commend the ongoing and coordinated efforts by the World Bank, IFC, and MIGA to swiftly address fragility and disasters, including by leveraging the IDA Private Sector Window and Contingency Emergency Response Components in operations. The Board also recently approved the establishment of an IDA Crisis Facility, which will boost support for the world’s poorest countries in tackling urgent development challenges, particularly food security and climate change.

In addition to the many operations and country engagements the Board discussed and approved this year, Executive Directors also visited operations in several client countries. In February and May 2023, Board members traveled to Belize, Guatemala, Panama, the Republic of Congo, and São Tomé and Príncipe. During these missions, the Executive Directors engaged with key government entities, the private sector, civil society, and donor stakeholders and met with World Bank Group staff and the people who have benefited from these operations.

As the World Bank Group’s leadership and Boards of Directors prepare for the October 2023 Annual Meetings in Marrakech, the Executive Directors and management are moving forward on the Evolution Roadmap. The Executive Directors extend their sincere gratitude to David Malpass for his strong and steadfast leadership of the World Bank Group through a historically challenging period. His commitment to the mission, diversity and inclusion, debt transparency and sustainability, and countrylevel development outcomes have seen the institution deliver record commitments for development. The Board warmly welcomes his successor, Ajay Banga, as the 14th President of the World Bank Group. Finally, the Executive Directors extend their thanks to all staff for their tireless dedication and hard work in these challenging times. Thanks to them, the World Bank Group continues to make a difference in the lives of many who deserve a life in dignity.