The Bank announced in June that its commitments for the financial year (FY) ending 30 June had fallen to $57.4 billion, from an all time peak of $72 billion last year (see Update 72). Though middle-income countries remained the main destination for lending, the International Bank for Reconstruction and Development (IBRD), the Bank’s middle-income country lending arm, dropped its commitments from $44.2 billion to $26.7 billion. This is an anticipated fall due to the modest increase that member governments gave to the IBRD’s capital base agreed in 2010, which should gradually return the IBRD to its pre-crisis lending levels (see Update 70). Development Policy Loans (DPLs, see Update 66) fell back significantly as a proportion of total IBRD commitments to 37 per cent, compared with 47 per cent in the previous year.
The International Finance Corporation (IFC), the Bank’s private sector arm, continued the rapid rise of recent years, which was temporarily halted during FY2009. However, owing to a new way of reporting commitments, this is not apparent from the Bank’s press release. Previously the Bank had reported total IFC commitments. However, this year it has divided this total into two, and is only reporting on the first portion, which is the $12.3 billion committed against the IFC’s own account, down from $12.6 billion in the previous year. If you add the additional $6.4 billion “mobilised from other investors” (up from $5.3 billion), you get a total commitment figure of $18.7 billion in FY2011, up from $17.9 billion in the previous year. The Bank has not yet given details of which other investors it has “mobilised” to increase its funding level.
The International Development Association (IDA), the Bank’s low-income country arm, saw its commitments rise as expected, from $14.5 billion to $16.3 billion. FY2011 was the last year of the IDA 15 replenishment round; the next three years will see continued growth in IDA, due to the increase in funding promised for IDA 16 (see Update 74).
Infrastructure still number one
Infrastructure lending has been running at around $20 billion annually for the previous two years, and remains at this level in FY2011. However, as the overall level of lending has fallen, this means that it now accounts for 46 per cent of total Bank lending. Though the Bank is yet to release detailed figures, this means that spending in other areas must have declined significantly.
Disbursement-phobe?
Examining the Bank’s commitments only tells half the picture, as actual disbursements of loans almost always turn out to be slightly lower (see Update 68). However, in recent years, this gap has grown. In the three financial years between 2009 and 2011, for example, IBRD commitments were $103.8 billion, but disbursements were only $69.3 billion, or around two-thirds of commitments.
