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FIF Brochure FINANCIAL INTERMEDIARY FUNDS IN THE WORLD BANK GROUP This publication is a product of the Development Finance Vice Presidency (DFi) of World Bank 1818 H Street, N.W. Washington, D.C. 20433 http://fiftrustee.worldbank.org Spring 2014 Photography: p.1, 12, 27, 46, Scott Wallace / World Bank- Family whose home p.10 Dana Smillie / World Bank- Honey producer. Kenya floods every year p.12, 27, 29, 34 Joao dos Santos / World Bank- A view of hills and sky p.1, 3, 17, 36 Curt Carnemark / World Bank- Shelling Peas p.13, Philip Schuler / World Bank- Basket weavers in Ongula p.1, 20, 36 Curt Carnemark / World Bank- Gathering Corn p.13, Arne Hoel / World Bank- A woman in training center for production p.1, 7, 46 Georgina Goodwin/World Bank- Maasai women make, sell of local handicrafts and display their bead work p.13 Arne Hoel / World Bank- Yosr works as a consultant for an export p.1, 12, 40, Dominic Chavez / World Bank- A view of Delmas 32, a promotion agency neighborhood in Haiti which many residence are beneficiaries of the p. 5, 46, Curt Carnemark / World Bank- Pieces of cloth hold together a PRODEPUR- Habitat project bundle of wood p.1, 3, Curt Carnemark / World Bank- 6 MA004S06 World Bank p.15, James Martone/ World Bank- Women in the village of Garak p.1, 13, Shynar Jetpissova / World Bank - Construction in Astana, p.15 James Martone/ World Bank- African farmer in field Kazakhstan p.16, Dana Smillie / World Bank- A teacher works with a hearing p.3, Dominic Chavez / World Bank - Inside the control room at impaired student E-Power plant p.16, 21 Arne Hoel / World Bank- Malaria Medication p.3, 4, 27, 40, Alex Baluyut / World Bank- Fishing p.16 World Bank- A computer class at a rural secondary school in La p.3, 31 Arne Hoel / World Bank- Getting Water Ceja del Tambo p.3, 4, 27, 46, Dominic Chavez / World Bank- E-Power in Port-au- p.19, 46 Arne Hoel / World Bank- Accessing safe and clean water Prince p.21, 24 Arne Hoel / World Bank- AH-SS100929_6902 p.4, 17, 40 Dominic Chavez / World Bank- Roma Community p.21 Arne Hoel / World Bank- Malaria Medication p. 5, 6, 40, Gabriela-Leite Soares/World Bank- School Girls in p.26 Chhor Sokunthea / World Bank- Cambodia: Improving hospitals and Lospalos healthcare helps save lives 1 p.5, 6, 19, 20 Flore de Préneuf/ World Bank – Storefront That p.27 Dave Lawrence / World Bank- Portable solar systems in rural Specializes In Nuts Mongolia p.5, 6, 36 Dana Smillie / World Bank- Preparing fertilizer for the p.34, Arne Hoel / World Bank- Purchasing protective malaria bed netting cultivation of aloe plants, Kenya. p.36, 46 Curt Carnemark / World Bank- Man Shows Harvested Corn p.6, 15 Flore de Préneuf / World Bank A factory worker in Romania p.40, 46 Dana Smillie / World Bank- Girls attend morning assembly at p.7,17, Alex Baluyut / World Bank-Loading sacks of coffee beans the Shaheed Mohamed Motaher Zaid School in Sana’a p.7, 26 Curt Carnemark / World Bank- KE014S05 World Bank p.8, 46, Scott Wallace / World Bank- Cacao seeds p.8, 17, 21 World Bank- Lab specialist working on Avian Influenza 2 2013-2014 The World Bank partners with governments, foundations, and others to create large, global and regional initiatives aimed at specific development challenges that are not being sufficiently addressed by existing funds and mechanisms. These challenges are diverse, ranging from climate change to health epidemics, from standard setting to knowledge sharing and may involve cross-border spillovers. THE FINANCING MECHANISMS BACKING these global and regional initiatives have evolved over time with Financial Intermediary Funds accounting for the largest volume of financing among different types of trust funds. SELECTIVITY principles for these global and regional initiatives focus on alignment with the World Bank Group strategy, demand for the Bank involvement, and opportunities for the Bank to add value through its involvement. 4 THE BANK’s participation in these initiatives benefits the Bank’s clients and ultimately meets their needs. WHAT ARE FINANCIAL INTERMEDIARY FUNDS (FIFS)? Large multilateral financial mechanisms that support global development initiatives or partnerships Often focused on the provision of global public goods, including: PREVENTING COMMUNICABLE DISEASES RESPONDING TO CLIMATE CHANGE ENSURING FOOD SECURITY 5 FIFs involve innovative financing and governance arrangements, as well as flexible designs that enable funds to be raised from multiple sources, both sovereign and private. FIFS ARE APPROPRIATE IN SUPPORTING NEW PARTNERSHIP PROGRAMS OR OTHER DEVELOPMENT INITIATIVES when the scale of financing is expected to be large, outreach requires implementation channels beyond those of the Bank (or instead of the Bank) based on comparative advantages of other agencies, and the Bank’s role as trustee can be clearly defined and separated from other roles. While governance structure of FIFs varies, all FIFs have external governing bodies that are responsible for funding decisions. The World Bank is represented in those governing bodies as an observer in most FIFs, but in some FIFs participates as a voting member. 6 WHAT IS THE WORLD Bank’s ROLE? As FIF trustee, the World Bank provides a set of agreed financial services, on a reimbursable basis, that involve: RECEIVING, HOLDING, AND INVESTING CONTRIBUTED FUNDS 2 TRANSFERRING FUNDS WHEN INSTRUCTED BY THE FIF GOVERNING BODY PROVIDING CUSTOMIZED TREASURY MANAGEMENT OR OTHER AGREED FINANCIAL SERVICES (UNDER SOME FIFS, INCLUDING BOND ISSUANCE HEDGING INTERMEDIATION AND MONETIZATION OF CARBON CREDITS) FIF TRUSTEESHIP DOES NOT INvolvE OVERSEEING IN ADDITION TO ITS OR SUPERVISING THE USE OF FUNDS BY RECIPIENTS. TRUSTEE ROLE, THE This is the role of implementing agencies that receive WORLD BANK MAY: funding and are responsible for project or program 1 implementation/supervision. The trustee generally transfers funds to external agencies (e.g., UN agencies or Multilateral Development Banks) for the implementation of activities. In the case of FIFs, whose governing bodies have the legal and other required capacities to take on responsibility for the use of funds (e.g., Global Fund 7 to Fight AIDS, Tuberculosis and Malaria), the Bank transfers funds received from donors directly to multiple third-party entities, usually in recipient countries, based APPRAISE AND/OR SUPERVISE on instructions from and on behalf of the governing body. 1 PROJECTS OR PROGRAMS BY A FIF 3 4 These roles are managed by different World Bank Units. In general, because different entities play different roles within the FIF structure, a key aspect of governance is the clear separation of roles and responsibilities within the World Bank. In cases where the World Bank has been selected as 5 an implementing agency by the FIF governing body, resources may be received by World Bank operational units for the implementation PROVIDE SECRETARIAT PROVIDE UPSTREAM ADVISORY 2 4 of activities through SERVICES TO A FIF SUPPORT DURING THE DESIGN IBRD/IDA trust funds. 8 PHASE OF A FIF PROVIDE DOWNSTREAM TECHNICAL 3 BE A DONOR TO A FIF 5 ASSISTANCE TO BUILD LOCAL CAPACITY FOR IMPLEMENTATION THE C URREN T FIF PORT Most FIFs support global programs that typicallyF focus on the provision of global public goods, in particular, preventing communicableOL diseases,IO responding to climate change, and addressing education and food-security challenges. THE BANK IS C URR ENtly TRUS TEE FOR21 FIFs TOT 2 Growth in number of AL x FIFs since 2006 Cumulative Funding in US $ Millions $60,769.1 HEALTH $2,749 IFFIm DEBT RELIEF Debt Relief Trust Fund $7,683 $2,669 $7,682 $19,600 $29,583 AGRICULTURE AND FOOD SECURITY ENVIRONMENT /CLIMATE CHANGE 9 $12,125 Global Agriculture $973 and Food Security Global Environment Facility Program $606 $244 $16 $1,659 Least Developed Nagoya Protocol CGIAR Fund Special Climate Countries Fund Change Fund Implementation Fund $36.5 $3,533.7 AgResults Initiative $2,688 Clean Technology Strategic Climate Fund Fund $332 $8 Adaption Fund Green Climate Fund $651 $156 Advance Market Commitment African Program for Onchocersiasis Control II EDUCATION Global Partnership for Education $756 Global Fund to Fight AIDS, Tuberculosis, and Malaria $26,025 NATURAL DISASTER OTHER Haiti Reconstruction Fund MENATF $381 $96 10 Clean FIF ROLES AND KEY DATES Technology Fund 2008 Key Strategic Basic Financial Trustee Climate Fund Nagoya Protocol Management Service 2008 Implementation Trustee + Implementing Agency Fund* Additional Financial 2011 Management Service Trustee + Secretariat Adaptation Fund* Customized Financial Trustee + IA+ Secretariat 2008 Global Management Service Partnership for Education 2011 African Program Special Climate Global Environment Debt Relief for Onchocersiasis Change Fund* Green Facility* Trust Fund Control II 2004 Climate 1991 2001 Fund 2012 1990 1996 2000 2005 2010 2013 Global Fund to Fight AgResults AIDS, Tuberculosis MENA International 2012 Initiative *As a special case, the World Bank provides administrative and Malaria 2002 Finance Facility support to the GEF secretariat. Although the secretariat for Immunisation is physically located in the Bank’s building, it has its own 2006 independent governance structure, with the CEO reporting Least Developed Countries Fund* Advance Market to the GEF Council and Assembly. 2002 CGIAR Fund Commitment 2009 Global Agriculture and Food Security Program Guyana REDD- 11 FIFs for which the World Bank acts as one of the implementing agencies Plus Investment 14 alongside other external agencies. Fund Such agencies are responsible for preparing/appraising and implementing/ Haiti supervising FIF-financed projects. In doing so, each agency uses its own policies Reconstruction and procedures for procurement, financial management, environmental and social Fund safeguards, etc. FIFs for which the World Bank plays an additional 12 role by providing administrative, secretariat 17 support functions to FIF governing bodies. In the case of one FIF (CGIAR Fund), the Bank provides trustee and secretariat services but does not 1 serve as an implementing agency.
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