India & World Bank (IBRD)

1. India & World Bank (IBRD)
Dr. C S Shaijumon, Department of Humanities, Indian Institute of Space science & Technology, Dept.
1
of Space, Govt. of India

2. Five Institutions, One Group
1. International Bank for Reconstruction and
Development (IBRD) - 1945
2. International Development Association (IDA) - 1960
3. International Finance Corporation (IFC) - 1956
4. The Multilateral Investment Guarantee Agency
(MIGA) - 1988
5. The International Centre for Settlement of Investment
Disputes (ICSID) - 1966
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India

3. IBRD
• The International Bank for Reconstruction and
Development (IBRD) lends to governments of middle-income
and creditworthy low-income countries.
• The International Bank for Reconstruction and
Development (IBRD) aims to reduce poverty in
middle-income countries and creditworthy poorer
countries by promoting sustainable development
through loans, guarantees, risk management products,
and analytical and advisory services.
• Established in 1944 as the original institution of the
World Bank Group, IBRD is structured like a
cooperative that is owned and operated for the benefit
of its 188 member countries.
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India

4. IBRD raises most of its funds on the world's financial
markets and has become one of the most established
borrowers since issuing its first bond in 1947. The income
that IBRD has generated over the years has allowed it to
fund development activities and to ensure its financial
strength, which enables it to borrow at low cost and offer
clients good borrowing terms.
• IBRD borrows at attractive rates on the capital markets
thanks to its triple-A status that it has had with credit rating
agencies since 1959. This has enabled it to borrow in U.S.
dollars, for example, at an overall funding cost that comes
close to that of the U.S. Treasury. IBRD enjoys its high
credit rating because of the support of its 188 shareholder
governments. It is also the result of IBRD's strong capital
and reserves on its balance sheet, prudent financial policies,
and its expected treatment as a preferred creditor when a
country has difficulty in repaying its loans.
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India

5. World Bank Green Bonds
• In 2008, the World Bank launched the "Strategic Framework for
Development and Climate Change” to help stimulate and coordinate public
and private sector activity to combat climate change.
• The World Bank Green Bonds is an example of the kind of innovation the
World Bank is trying to encourage within this framework.
• The World Bank Green Bond raises funds from fixed income investors to
support World Bank lending for eligible projects that seek to mitigate climate
change or help affected people adapt to it.
• The product was designed in partnership with Skandinaviska Enskilda Banken
(SEB) to respond to specific investor demand for a triple-A rated fixed income
product that supports projects that address the climate challenge.
• Since 2008, the World Bank has now raised USD 6.7 billion equivalent in
Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
Green Bonds through 72 transactions and 17 currenc5ies.
science & Technology, Dept. of Space, Govt.
of India

6. Specifically, the IBRD:
• supports long-term human and social development
needs that private creditors do not finance;
• preserves borrowers' financial strength by providing
support in crisis periods, which is when poor people are
most adversely affected;
• uses the leverage of financing to promote key policy
and institutional reforms (such as safety net or
anticorruption reforms);
• creates a favorable investment climate in order to
catalyze the provision of private capital;
• provides financial support (in the form of grants made
available from the IBRD's net income) in areas that are
critical to the well-being of poor people in all countries.
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India

7. IBRD has three main business lines
• Strategy and Coordination Services
• Financial Services
• Knowledge Services
– Poverty Assessments
– Social and Structural Reviews
– Public Expenditure Reviews
– Sector Reports
– Country Economic Memoranda
– Knowledge Sharing
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India

8. IDA
• The International Development Association (IDA) is the part of the
World Bank that helps the world’s 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 people’s living conditions.
• IDA complements the World Bank’s original lending arm—the
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 poor countries.
IBRD and IDA share the same staff and headquarters and evaluate
projects with the same rigorous standards.
• IDA is one of the largest sources of assistance for the world’s 77 poorest
countries, 39 of which are in Africa. It is the single largest source of
donor funds for basic social services in these countries. IDA-financed
operations deliver positive change for 2.8 billion people, the majority of
whom survive on less than $2 a day.
• IDA lends money on concessional terms. This means that IDA charges
little or no interest and repayments are stretched over 25 to 38 years,
including a 5- to 10-year grace period. IDA also provides grants to
countries at risk of debt distress.
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India

9. • 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. In fiscal year 2014
(which ended June 30, 2014), IDA
commitments rose to a record $22.2 billion
from $16.3 billion in the previous fiscal
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India

10. IFC
• The International Finance Corporation (IFC) is the largest
global development institution focused exclusively on the
private sector.
• Established in 1956, IFC is owned by 184 member countries, a
group that collectively determines our policies. Our work in
more than a 100 developing countries allows companies and
financial institutions in emerging markets to create jobs,
generate tax revenues, improve corporate governance and
environmental performance, and contribute to their local
communities.
• As the largest global development institution focused on the
private sector, IFC works closely with businesses in
developing countries to help them succeed in ways that
promote prosperity for all.
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India

11. Since 1956, IFC has invested in 346 companies in India, providing
over $10.3 billion in financing for its own account and $2.9 billion
in mobilization from external resources.
As of June 30, 2014, IFC's committed portfolio in India stood at
$4.7 billion, making India IFC's largest portfolio exposure.
The most acute needs for energy, water, roads, phone connections,
healthcare, education, sanitation, waste management, access to
financial services, are among those who live in low-income, rural
and semi-urban parts of the country.
IFC is working closely with various state governments of low
income states such as Rajasthan, Odisha, and Bihar to improve the
investment climate for private sector. With solar sector in Rajasthan
offering huge potential, IFC has provided debt funding to
companies like Mahindra Solar One for setting up a solar project
that will help expand access to clean energy. In Odisha, IFC has
invested in OCL India Limited, a cement manufacturer, to support
expansion of its plant in the state.
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India

12. MIGA
• The Multilateral Investment Guarantee Agency (MIGA)
was created in 1988 to promote foreign direct investment
into developing countries to support economic growth,
reduce poverty, and improve people’s lives. MIGA fulfills
this mandate by offering political risk insurance
(guarantees) to investors and lenders
• As a multilateral development agency, MIGA only supports
investments that are developmentally sound and meet
high social and environmental standards. MIGA applies a
comprehensive set of social and environmental performance
standards to all projects and offers extensive expertise in
working with investors to ensure compliance to these
standards.
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India

13. MIGA focus on insuring investments in the areas where
they can make the greatest difference
• Countries eligible for assistance from the International
Development Association (the world’s poorest countries)
• Conflict-affected environments
• Complex deals in infrastructure and extractive industries,
especially those involving project finance and
environmental and social considerations
• Middle Income Countries where MIGA can have impact
MIGA offers comparative advantages in all of these areas—
from our unique package of products and ability to
restore the business community's confidence, to MIGA’s
ongoing collaboration with the public and private
insurance market to increase the amount of insurance
available to investors.
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India

14. • A Council of Governors and a Board of Directors
representing our member countries guide the
programs and activities of MIGA.
• MIGA’s corporate powers are vested in the
Council of Governors, which delegates most of its
powers to a Board of Directors.
• Voting power is weighted according to the share
of capital each director represents.
• The directors meet regularly at the World Bank
Group headquarters in Washington, DC, where
they review and decide on investment projects
and oversee general management policies.
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India

15. ICSID
• ICSID is an autonomous international institution established
under the Convention on the Settlement of Investment Disputes
between States and Nationals of Other States (the ICSID or the
Washington Convention) with over one hundred and forty
member States.
• The Convention sets forth ICSID's mandate, organization and
core functions. The primary purpose of ICSID is to provide
facilities for conciliation and arbitration of international
investment disputes.
• The ICSID Convention is a multilateral treaty formulated by the
Executive Directors of the International Bank for Reconstruction
and Development (the World Bank). It was opened for signature
on March 18, 1965 and entered into force on October 14, 1966.
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India

16. • ICSID was created by the Convention as an
impartial international forum providing facilities
for the resolution of legal disputes between
eligible parties, through conciliation or arbitration
procedures. Recourse to the ICSID facilities is
always subject to the parties' consent.
• As evidenced by its large membership,
considerable caseload, and by the numerous
references to its arbitration facilities in investment
treaties and laws, ICSID plays an important role
in the field of international investment and
economic development.
• Today, ICSID is considered to be the leading
international arbitration institution devoted to
investor-State dispute settlement.
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India

17. SUMMARY
• TheWorld Bank has a long relationship with India
• In June 1944, India was one of the 44 countries which signed the
final agreement that established theWorld Bank.
• In fact, the name “International Bank for Reconstruction and
Development” (IBRD) was suggested by India and later India
suggested the establishment of the International Development
Association (IDA) - the World Bank’s soft-loan (interest-free
loan) affiliate.
• Recently, India became the 7th largest shareholder in the World
Bank.
• India has played a significant role in the formulation,
implementation and monitoring of the Bank’s policies and
operation, particularly from the standpoint of the developing
countries. India also appoints its own Executive Director (ED).
The Indian ED is based at the World Bank’s headquarters in
Washington DC. India’s ED also represents Bangladesh, Sri
Lanka and Bhutan.
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India

18. • India took its first IBRD loan in 1949 for a sum of
$34 million to develop the Indian Railways.
• Today, India has the second largest portfolio with
the World Bank. Cumulatively, India has been the
largest single recipient of World Bank assistance,
for around 600 projects across a range of sectors.
Today, more than 78 projects worth over $24.1
billion are active in India.
• Even so, the World Bank remains a small player
in India’s trillion dollar economy, and finances
less than half percent of the country’s GDP.
• The Bank's work in India is closely aligned with
the country’s own development agenda as
articulated in its Five Year Plans.
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India

19. • In 2002, India unveiled its national flagship program, the Elementary Education
Project (Sarva Shiksha Abhiyan, SSA), to enroll all 6–14-year-olds in school.
IDA is helping finance the SSA - one of the largest elementary education
programs in the world.
• The SSA caters to some 200 million children living in over a million habitations
across the country.
• Since 2001, nearly 20 million children have been brought into elementary
school. Most of these children are first generation learners from long-deprived
communities and children with special needs. As a result, over 98 percent of
India’s children now have access to a primary school within 1 km of their home.
• Over the years, IDA has helped India battle the old scourge of tuberculosis (TB).
Since 1997, the DOTS strategy has raised TB awareness and improved
detection and cure rates dramatically. Between 1997 and 2008, more than 9.5
million people suffering from TB were diagnosed and placed on treatment,
saving more than 1.7 million additional lives. At the national level, case
detection rates reached 70 percent, achieving global targets.
• IDA supported livelihood programs are estimated to have mobilized 9.5 million
poor people in 55,000 villages across four states. Self help groups established
under these programs have cumulatively saved US$400 million, enabling them
to access credit amounting to over US$1billion from commercial banks. The
Rural producer groups organized Dr. C S Shaijumon, by these Department projects of
have accessed markets and
sold produce worth over US$Humanities, 500 million. Indian Institute of Space
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science & Technology, Dept. of Space, Govt.
of India

20. THANK YOU
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Dr. C S Shaijumon, Department of
Humanities, Indian Institute of Space
science & Technology, Dept. of Space, Govt.
of India