The World Bank says it plans to carry out investments in loans, grants, equity and guarantees totalling $52.6 billion to help promote economic growth, overcome poverty, and promote economic enterprise in developing countries in the 2012 fiscal year.
The bank said on Monday that its contributions, through its subsidiaries, to the investments during the year under review indicated that the International Bank for Reconstruction and Development (IBRD), which provides financing, risk management products, and other financial services to members would commit about $20.6 billion; while the International Development Associations (IDAs), which provide interest-free loans and grants to the poorest countries, would contribute about $14.7billion.
The International Finance Corporation (IFC), which makes equity investments and provides loans, guarantees and advisory services to private-sector business in developing countries, would provide about $15billion; while the Multilateral Investment Guarantee Agency’ would contribute $2.3 billion during the review period.
The $53billion investment package excludes more than $5 billion investments from other investors, who also showed commitment to execute various projects in the developing countries, in the 2012 fiscal year.
According to the bank, the regional direction of its investment outflows to developing economies showed that the largest share of resources were committed to Africa, which will receive around 50 per cent of total IDA lending in financial year 2012, followed by South Asia at around 36 per cent of total.
The IBRD commitments totalled about $20.6 billion, which is significantly higher than the historical average of $13.5 billion in fiscal years between 2005 and 2008, though less than the record $44.2 billion in fiscal 2010.
It said Europe, Central Asia, Latin America, and the Caribbean received the largest shares of IBRD lending, with each receiving $6.2 billion in new commitments.
“The World Bank continues to engage with countries to improve risk management strategies and offer financial products that can help reduce their vulnerabilities,” the bank said.
“The volume of risk management transactions executed by the Bank on behalf of client countries this year to manage the volatility of currency and interest rates is estimated at $2.5 billion.
“In addition, the Bank provided advisory services on public debt management to 40 countries, as well as financial products that meet our member countries’ risk management objectives. IFC, the largest global development institution focused exclusively on the private sector, again provided a record amount of financing to businesses in developing countries—leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges.”
The World Bank Group President, Robert Zoellick, whose term ended on June 30, said in his valedictory statement that “the Bank is well positioned for future challenges”.
“Since I joined the institution, the Bank Group has committed over $300 billion, most of it to help countries overcome food and economic crises. But just as important as the finance is our ability to work with countries – both the public and private sectors – as clients and to customize our services to address their problems,” Mr. Zoellick added.