The World Bank (WB) Group is one of the world’s largest sources of funding and knowledge for developing countries. It has 189 member countries, staff from more than 170 countries, and offices in over 130 locations.
World Bank was founded in 1944 as an international financial institution that provides loans to countries of the world for capital programs. It comprises two institutions: the International Bank for Reconstruction and Development (IBRD), and the International Development Association (IDA). The World Bank is a component of the World Bank Group. It provides low-interest loans, zero to low-interest credits, and grants to developing countries. These support a wide array of investments in such areas as education, health, public administration, infrastructure, financial and private sector development, agriculture, and environmental and natural resource management. Some of its projects are co-financed with governments, other multilateral institutions, commercial banks, export credit agencies, and private sector investors.
The World Bank’s stated official goal is the reduction of poverty and promoting shared prosperity. According to Article I of its Articles of Agreement, its purposes are (i) to encourage the development of productive facilities and resources in less developed countries, (ii) to promote foreign investment or provide own capital and (iii) to promote the long-range balanced growth of international trade.
The World Bank Group works in more than 170 countries, cooperating with partners in the public and private sectors.
Priority fields covered by the WB financed projects are strongly related to the Millennium Development Goals (MDG), which include the following targets:
- Eradicate Extreme Poverty and Hunger
- Achieve Universal Primary Education
- Promote Gender Equality
- Reduce Child Mortality
- Improve Maternal Health
- Combat HIV/AIDS, Malaria, and Other Diseases
- Ensure Environmental Sustainability
- Develop a Global Partnership for Development.
A recent report by Centre for International Climate and Environmental Research (CICERO) confirmed in which way environmental WB projects fulfil criteria for climate change adaptation and mitigation at the same time. Thus, details are added to WB’s Green Bond Process Implementation Guidelines.
The World Bank produced a Climate Change Action Plan 2016-2020 including four priorities:
- Priority I: Support Transformational Policies and Institutions
- Priority II: Leverage Resources
- Priority III: Scale Up Climate Action
- Priority IV: Align Internal Processes and Work with Others
WB provides a variety of financial instruments and services. These are summarised in the Box below.
World Bank Financial Instruments
- Investment Project Financing provides IBRD loan, IDA credit/grant and guarantee financing to governments for activities that create the physical/social infrastructure necessary to reduce poverty and create sustainable development.
- Development Policy Financing provides IBRD loan, IDA credit/grant and guarantee budget support to governments or a political subdivision for a program of policy and institutional actions to help achieve sustainable, shared growth and poverty reduction.
- Program-for-Results links disbursement of funds directly to the delivery of defined results, helping countries improve the design and implementation of their own development programs and achieve lasting results by strengthening institutions and building capacity.
- Trust funds and grants allow scaling up of activities, notably in fragile and crisis-affected situations; enable the Bank Group to provide support when its ability to lend is limited; provide immediate assistance in response to natural disasters and other emergencies; and pilot innovations that are later mainstreamed into the Bank’s operations.
- Private sector options for financing, direct investment and guarantees are provided by MIGA and IFC.
- Customized options and risk management
World Bank Services
- Technical Assistance (TA)
- Reimbursable Advisory Services (RAS)
- Economic and Sector Work (ESW)
- Business advice
- Donor aid coordination
The World Bank’s so called Green Project Cycle contains the following major stages:
- Identification: The task of identifying and proposing projects for World Bank financing lies mainly with borrowing governments. In this first phase, planners answer questions such as: Who will benefit from the project? Will project benefits be greater than the costs? Are there other options for achieving the same objective? A project must also pass a priorities test.
- Preparation: Though the Bank will often help, the borrowing country is responsible for examining the technical, economic, social, and environmental aspects of the project. It defines and analyses the available options, the feasibility of each, and their costs and benefits.
- Appraisal: WB’s own independent assessment of the project is called-the appraisal. About 150 on-site appraisal missions, lasting three to four weeks, take place each year, performed by Bank staff and consultants on technical, institutional, economic and financial questions.
- Negotiation and Board Presentation: The Bank appraisal report summarizing its recommendations for a loan's conditions forms the basis for negotiations with the borrower. The negotiations bring World Bank staff and the borrower together to agree on the measures necessary for a successful project. Presentation is made to the WB Board of Directors. Implementation and Supervision: About ten WB staff-weeks a year are spent supervising each project, including visit the project site to identify problems and help find solutions.
- Evaluation: An independent department within the World Bank, the Operations Evaluation Department (OED) is responsible for assessing the results of projects impartially.
The World Bank project cycle
World Bank Central Asia Regional Office, 41A Kazybek bi Street, 4th floor, Almaty, 050010,
Kazakhstan, Tel.: +7 727 377-8220, www.worldbank.org/centralasia, Lilia Burunciuc, Regional Director for Central Asia.
World Bank Country Office for Kazakhstan, 12 Samal, 14th floor, Astana, 010000, Kazakhstan, Tel.: +7 7172 691-440, email@example.com, www.worldbank.org/kz, Ato Brown, WB Country Manager for Kazakhstan
World Bank Country Office for Turkmenistan, Yimpash Business Center, Office 803, 54 Turkmenbashi Ave, Ashgabat, 744000, Turkmenistan, Tel.: +993 12 451-491, firstname.lastname@example.org, www.worldbank.org/tm.