The World Bank’s support to innovation in development finance ranges from raising funds to working with partners in designing and implementing efficient and effective financial solutions, to creating and sharing knowledge. The Bank accounted for more than a quarter of the official development flows totaling US$57.1 billion mobilized through innovative fund-raising efforts between 2000 and 2008. It has raised a total of US$2.15 billion through bonds that tap new sources.
The Bank has also been at the forefront of designing, implementing and managing innovative finance solutions at the global, regional and country levels to address specific development problems on the ground. These initiatives have focused on transforming development flows so that they correspond better to the timing of specific development needs, help address various types of risks and market failures, and alter incentives for better results. For example, the Bank helped design and establish the International Finance Facility for Immunisation (IFFIm), of which it is Treasury Manager.
It helped develop the Pilot Advanced Market Commitment for vaccines by supporting its design, negotiation and implementation, and has placed the $1.5 billion donor subsidy for the AMC pilot on the IBRD’s balance sheet. It has helped implement and is the Trustee of the Adaptation Fund, for which the Bank Treasury conducts Certified Emissions Reductions sales. The Bank has helped mitigate country risks with Catastrophe Deferred Drawdown Options, regional catastrophe insurance pools (the Caribbean Catastrophe Risk Insurance Facility), and weather derivatives insurance in Malawi.
It has assisted in the identification and preparation of projects that reduce carbon emissions, moving to a programmatic approach (through the Carbon Partnership Facility) and promoting carbon projects in countries, sectors, and activities yet to benefit from carbon finance (including through the Forest Carbon Partnership Facility).
For a broader overview of the World Bank’s activities and track record in development finance see the 2009 World Bank publication “Innovating Development Finance : From Financing Sources to Financial Solutions.”
29 December 2009Printable version