DEVELOPMENT COMMITTEE(Joint Ministerial Committeeof theBoards of Governors of the Bank and the Fundon theTransfer of Real Resources to Developing Countries)

DC2023-0004
September 28, 2023

Ending Poverty on a Livable Planet: Report to Governors on World Bank Evolution

Attached is the document titled “Ending Poverty on a Livable Planet: Report to Governors
on World Bank Evolution,” for the October 12, 2023 Development Committee Meeting.

ultspgpie

For Discussion
Development Committee: Thursday, October 12, 2023

Ending Poverty on a Livable Planet:
Report to Governors on World Bank Evolution

Development Committee

September 27, 2023

Table of Contents
Executive Summary .................................................................................................................................... v
I.

We Are Running Out of Time ............................................................................................................ 1

II. A New World Bank Vision and Mission ............................................................................................ 1
a. Our Direction .................................................................................................................................... 1
b. Our Ambition to Better Support Clients ........................................................................................... 2
III. A New World Bank Playbook ............................................................................................................ 5
a. Doubling Down on Impact ................................................................................................................ 5
b. Modernizing Our Approach to Delivery ......................................................................................... 10
IV. World Bank Financial Model ........................................................................................................... 13
a. Financing Capacity ......................................................................................................................... 14
b. Concessional Finance...................................................................................................................... 17
V.

Conclusion ......................................................................................................................................... 19

References .................................................................................................................................................. 20
Annex 1: Summary of Agreed Evolution Deliverables as of Marrakech ............................................. 21
Annex 2: Provisional Corporate Scorecard for the World Bank with Illustrative Indicators ........... 24

Abbreviations
AIIB
CAF
CCDR
CEM
CRDC
CRW+
CPF
CPSD
DFI
EDs
E/L
ESF
FCS
FCV
FIF
G20
GCP
GEMs
GPG Fund
IBRD
ICSID
IDA
IFC
IMF
MDB
MIGA
MTR
PFR
SDGs
SLL
TF
WESP

Asian Infrastructure Investment Bank
Capital Adequacy Framework
Country Climate and Development ReportCountry Economic Memorandum
Climate Resilient Debt Clause
Crisis Response Window PlusCountry Partnership Framework
Country Private Sector Diagnostic
Development Finance Institution
Boards of Executive Directors
Equity-to-Loan
Environmental and Social Framework
Fragile and Conflict-Affected Situations
Fragility, Conflict, and Violence
Financial Intermediary FundGroup of 20
Global Challenge Program
Global Emerging Markets Risk Database Consortium
Global Public Good FundInternational Bank for Reconstruction and Development
International Centre for Settlement of Investment Disputes
International Development Association
International Finance Corporation
International Monetary Fund
Multilateral Development Bank
Multilateral Investment Guarantee Agency
Mid-Term Review
Public Finance Review
Sustainable Development Goals
Statutory Lending Limit
Trust Fund
Warehouse-Enabled Securitization Platformiv

Executive Summaryi.

Extraordinary times require urgent action and new solutions. The world is in transformation. The
COVID-19 pandemic upended decades of development progress that lifted more than one billion people
out of poverty. Geopolitical tensions are on the rise and the climate crisis is an existential threat topeople and the planet. The international community’s efforts to end poverty and achieve the Sustainable
Development Goals (SDGs) by 2030 have fallen off track. People in many parts of the world facewidespread hunger, water and energy scarcity, and fragility, conflict, and violence (FCV). Theinternational community must rise to these needs with urgency. Time is of the essence.

ii.

The World Bank1 is transforming. As the leading development financier for more than 75 years, theWorld Bank has made major contributions to poverty reduction and economic development around theworld. We must now significantly step up the way we work to help ensure that the world achieves theSDGs, reaches net zero greenhouse gas emissions, and addresses other global challenges that
increasingly affect countries around the world. We need to evolve our ambition, strengthen oursolutions, and enhance our financing to do so. And we need the rest of the international development
community and the private sector with us: the World Bank alone cannot eliminate poverty, boost sharedprosperity, and address global challenges. We need to strengthen our collaboration and partnerships toenable increased action from all.

iii.

We are on the move to become a better and bigger bank, to deliver development impact more
effectively and efficiently for people and the planet. Since the call from Governors at the Annual
Meetings in 2022 for the World Bank to evolve, we have taken important steps (see Diagram 1) totransform ourselves to meet the challenges of new times: Setting a new vision to match our ambition – to create a world free of poverty on a livable planet– and a new mission to end extreme poverty and boost shared prosperity on a livable planet. With
these, the World Bank will for the first time have the formal mandate to both fight poverty andaddress global challenges, leading the way among multilateral development finance institutions.
 Creating a new World Bank playbook with solutions to achieve this ambition. We are doubling
down on our impact, to better address both country development needs and global challenges,
including through scale and replicability. We are enhancing and modernizing how we provide
finance and knowledge, including working as One World Bank across our institutions to mobilize
private capital and domestic public resources for development. We will use a new scorecard tomonitor results aligned with the new mission.
 Taking steps to increase our own financing capacity to meet development needs. We havesuccessfully implemented many of the measures recommended by the G20 Capital Adequacy
Framework (CAF), creating up to US$50 billion of additional lending capacity over the next ten
years with our existing resources. We are proposing additional innovative measures that could
further increase our financing capacity – but these depend on the interest and actions of ourshareholders and development partners.

iv.

Our ambition is high. This paper to the Development Committee captures the initial steps that theWorld Bank has taken to evolve. We will continue to identify and adopt new solutions to be a betterbank. To respond to the magnitude of challenges facing our clients, we must also become a bigger bank.
We will continue to explore measures to increase our financing capacity beyond those that have alreadybeen agreed. At the 2023 Annual Meetings, we ask for the endorsement of Governors, and the supportof the international community, for the World Bank’s new directions, and to explore how – together –we can further increase our ambition and impact.

1

World Bank in this context refers to IBRD, IDA, IFC, MIGA, and ICSID here and in the rest of this report.

v

Diagram 1: Elements of World Bank Evolution

vi

I.

We Are Running Out of Time1.
At this year’s Annual Meetings in Marrakech, the international community must collectively
set a new course of action to address the emergencies of poverty and the growing number of global
challenges. The world is off track to meet the SDGs. After three decades of development that lifted morethan one billion people out of poverty, the COVID-19 pandemic upended this progress and increased rates
of poverty and inequality. The global economy is yet to recover. Global tensions are on the rise, withheightened fragility, conflict, and violence. The climate crisis is an existential threat to people and theplanet. Many developing countries face increasing debt vulnerabilities. Across the world, people facewidespread hunger, water, and energy scarcity. These crises – many with impacts across country borders –require a massive change in how we work together to support countries and address global challenges.
2.
The international community must respond with urgency – and the World Bank can play aleading role. We need to engage with greater scale and speed as the leader in development to deliver impact
for people and the planet at country, regional, and global levels. To that end, the World Bank must adopt a
new vision and mission that reflect our stakeholders’ shared aspirations. Implementation requires a new
World Bank playbook with scalable and replicable solutions underpinned by our knowledge, partnerships,
and operations efficiency and effectiveness.
3.
Over the past year, the World Bank has worked to become a better and bigger bank. At theAnnual Meetings in 2022, Governors called on the World Bank to evolve, and we have been on the movesince then. Intense engagements between Management, the Boards of Executive Directors (EDs), andexternal stakeholders guided this process. This paper presents the main elements of the World Bank’s
evolution (summarized in Diagram 1), including a new vision and mission to respond to the world’s needs
and reflect the ambitions of our shareholders; a new playbook to achieve the new ambition; and a newscorecard to measure our results. Initial steps have been agreed to increase our financing capacity, andadditional measures could make us an even bigger bank with greater financing capacity to serve our clients’
growing needs. Annex 1 summarizes the evolution deliverables.
II.

A New World Bank Vision and Mission

a. Our Direction
4.
Our new vision is to create a world free of poverty on a livable planet and our new mission is to
end extreme poverty and boost shared prosperity on a livable planet.2 Since the World Bank evolution
process began, Management and the World Bank EDs have worked together to establish this new visionand mission to strategically guide our work. The collaborative process underscored the need to redouble
efforts and increase financing capacity to achieve the goals of poverty reduction and shared prosperity –which we are not on track to reach by 2030 – while noting how their progress is dependent on addressing
global challenges. There is recognition that the World Bank needs to support efforts to achieve broad-based
economic growth as a precondition for sustained poverty reduction in countries, while addressing resilienceto shocks, sustainability, and inclusion. There is also agreement regarding the importance of the private
sector in addressing development challenges, as financier, innovator, and engine of job-rich economic
growth. The discussions further emphasized that the World Bank needs to deliver solutions that are relevant
for the full range of its diverse public and private sector clients. By incorporating these elements in the new
vision and mission, the World Bank will strengthen its position with its commitment to advancedevelopment at all levels: fighting poverty and inequality as well as global challenges, and recognizing theirinterdependencies, to achieve good development outcomes across the world.
2

A livable planet is a healthy and sustainable planet on which people can prosper. Associated metrics will be includedin the final Corporate Scorecard.

1

5.
The new vision and mission are shaping the World Bank’s new playbook. Time is of theessence, as multiple, intertwined crises threaten the achievement of this vision and mission. A better andbigger World Bank will support all its clients in addressing development challenges at country, regional,
and global levels, and will pursue outcomes that revolve around: Poverty reduction: ending extreme poverty by 2030 or as soon as possible.
 Shared prosperity: boosting prosperity, particularly for the poorest, to achieve more equitable societies.
 Inclusion: increasing and improving the distribution of opportunities, resources, and choices for all,especially for women, youth, as well as vulnerable and marginalized people, with special focus on humandevelopment (including education, health, and social protection).
 Resilience: strengthening the ability of people and countries to prevent, prepare, and recover fromshocks, including against climate and biodiversity crises, pandemics, and fragility or conflict.
 Sustainability: advancing economic growth and job creation, macroeconomic stability, fiscal and debt
management, food security, and access to clean air, water, and affordable energy, including recognizing
the increasing interlinkages between country-level progress to achieve the SDGs and progress to reducethe impact of climate change and other global risks.
6.
We have identified eight global challenges for the World Bank to focus on in the next few
years. These challenges are unique as they affect many countries and have cross-border implications. The
costs of addressing them are high and borne by individual countries, while the benefits are often shared,
putting them at risk of being under-addressed. Addressing the following challenges will be key to advancing
the World Bank’s new vision and mission: (i) Climate Change Adaptation and Mitigation; (ii) Fragility andConflict; (iii) Pandemic Prevention and Preparedness; (iv) Energy Access; (v) Food and Nutrition Security;(vi) Water Security and Access; (vii) Enabling Digitalization; and (viii) Protecting Biodiversity and Nature.
The selection of these eight was agreed between Management and the World Bank EDs, considering theneed to prioritize global public goods;3 address the most pressing needs facing many countries at once
(often because of global factors); and the World Bank’s comparative advantage to provide support. Whilethese are not the only challenges affecting many countries, without addressing them, sustained progress onpoverty, shared prosperity, and a livable planet will not be possible. The list will be reviewed and evolve
over time, as circumstances change.
7.
The World Bank will continue to provide support through its country-driven model.
Responding to country demand is a core strength of the World Bank and will drive our continued
effectiveness. We will respond to country development challenges based on our comparative advantage,
additionality, global footprint, and expertise, with the aim of scaling up delivery. World Bank support willcontinue to address pressing country development priorities, such as education losses and learning poverty,
governance, macroeconomic stability, debt vulnerability, gender equality, trade, economic growth, and jobs.
There will also be a continued focus on strengthening country institutions as a critical area of support toachieve the vision and mission. In terms of country-level climate action, World Bank financing will seek
the appropriate balance between adaptation and mitigation4 and will remain Paris-aligned. We will take into
account equity concerns and the principle of common but differentiated responsibilities and respective
capabilities, in light of countries’ different circumstances.
b. Our Ambition to Better Support Clients
8.
Delivering on the new vision and mission will benefit all World Bank clients. The World Bank’s
evolution responds to countries’ complex development challenges and the international community’s
3

The World Bank’s Forward Look of 2016 and Capital Package of 2018 outlined the need for an expanded role of theWorld Bank in helping to deliver global public goods related to climate change, pandemics, and fragility.
4
Some shareholders have encouraged the World Bank to be even more ambitious in its commitment to adaptation
finance beyond current targets in the Climate Change Action Plan.

2

ambition to accelerate poverty reduction and progress towards the SDGs as well as addressing multiple
global challenges, which are to a large extent interlinked. The new playbook will enable the World Bank todeliver more impactful solutions at greater scale and speed to all its clients (see Box 1).
Box 1: World Bank Evolution: Benefits for Clients
The World Bank is evolving to deliver solutions and impact for our clients. The new Knowledge Compact for Action
is one way to do so. World Bank investments and operations will increasingly draw on country, regional, and global
knowledge to respond to challenges at the country level, and country clients will systematically benefit from training
and capacity building. World Bank programs, developed and agreed with country clients, will draw on analytics toidentify solutions to development problems. Support will help increase finance from the public and private sectors,
from both domestic and external sources, with a particular focus on strengthening private sector development andenabling and mobilizing private solutions and capital. Enhancements to the World Bank crisis toolkit will build
clients’ resilience and increase their capacity to quickly respond to crises, including through greater access to rapid
response support, for both public and private sector clients. Global Challenge Programs will provide country clientswith additional support to address development challenges with greater speed, scale, and impact, with new
networking and learning opportunities made available by working as part of a globally coordinated program.
With a stronger One World Bank approach, countries will be able to better leverage the comparative advantages ofeach World Bank institution and access solutions that maximize the respective strengths of the public and private
sectors. Partnerships will be strengthened to provide countries with more – and better coordinated – support fromdiverse partners. These improvements, taken together with operations efficiency and effectiveness measures andreforms to staff functions, policies, and incentives, will enable the World Bank to be more responsive to all its clients;
take more risks in line with its capacities; increase the speed and quality of operations; and deliver measurable
development impact at the country, regional, and global levels.

9.
Achieving our ambition will require a significant increase in financing for development.
Spending needs to address global challenges in developing countries are massive, with numerous estimatesthat trillions of dollars per year in additional investment are needed. For example, the United Nations
Secretary General has called for an annual increase of at least US$500 billion in financing for developing
countries to meet the SDGs. The World Bank estimates that total spending needs to address the threechallenges of climate change, conflict, and pandemics are in the order of US$2.4 trillion per year for all
IDA and IBRD countries between 2023 and 2030.5 A recent report of an Independent Expert Group,commissioned by the G20, cited the need for US$3 trillion in additional investments per year by 2030, tocome from a range of public and private sources; this includes a tripling of financing from all multilateraldevelopment banks (MDBs), as well as US$500 billion per year in incremental private capital to be
facilitated by MDBs, and US$2 trillion in additional domestic resource mobilization and local finance. The
report further recommends the need for a substantial increase in the level of IDA by 2030, and a general
capital increase for IBRD.6 Additional climate finance was a key part of COP27, with the final agreement
highlighting that “US$4 to US$6 trillion a year needs to be invested in renewable energy until 2030 (…) toallow us to reach net-zero emissions by 2050”. As significant as these needs are, the costs of insufficientaction will be even higher – in terms of negative impact on human health, reduced food production,
infrastructure impacts, and other economic costs; for example, in one estimate, the benefit-cost ratio ofclimate-resilient infrastructure investments is about 6 to 1 due to the magnitude of costs avoided (UN 2019).
5

Other estimates, while based on different assumptions and methods, arrive at overall similar trillion-dollars
magnitudes. For instance, Fay and Rozenberg (2019) estimate total investment needs on the order of US$1.5 trillion
per year in the energy, transport, water, flood and irrigation sectors; IMF (2019) estimates total expenditures andinvestments in the education, energy, health, transport and water and sanitation sectors to be around US$2.6 trillion
per year required to achieve the SDG targets.
6
The report of an Independent Expert Group, commissioned by the G20, argues that each dollar of new equity could
be expected to support at least US$15 of additional external financing for sustainable investments: US$7 in direct
MDB lending and US$8 in additional direct and indirect mobilization of external private capital.

3

Box 2: Incorporating Feedback from Consultations
The World Bank held consultations in all its seven operational regions, in Washington DC, and online, along withtargeted engagements with key stakeholders. We received input from more than 1,000 external stakeholders from118 countries, representing more than 600 entities, including civil society, service delivery organizations, academia,
think tanks, private sector, and others. The World Bank also received more than 120 online submissions.
Stakeholders welcomed the World Bank’s effort to evolve and our commitment to remain engaged to ensure further
critical input from external stakeholders. The following was emphasized so far:
 Continuing our focus on poverty reduction: Stakeholders consistently emphasized continued focus onfighting poverty, inequality, and achieving the SDGs. Poverty remains central to the new vision and mission.
 Addressing climate change and other global challenges: The importance of a livable planet was welcomed,with climate change seen as the most urgent challenge among many, such as fragility, conflict, and violence.
Climate, development, and poverty reduction were often brought up as intertwined. The concept of a livable
planet and the focus on climate in the new mission of the World Bank reflects this sense of urgency.
 Enhancing work on inclusion: Inclusion, especially empowerment of women and youth, is seen as key tosuccessful development, with gender-based violence noted as a major issue. Inclusion is a key element in the
new mission, and Corporate Scorecard indicators will be disaggregated wherever feasible by gender and youth.
 Increasing development financing to address escalating challenges: The need for additional concessional
finance was noted, while protecting and increasing concessional resources for the most vulnerable and poorest.
Many flagged the need to pool resources with other sources of finance. The World Bank evolution reflects theneed for additional development finance, with proposals to ramp up concessional financing, domestic resource
mobilization, private capital mobilization, innovative financing solutions, and co-financing.7
 Bringing in the private sector while strengthening government capacity: Enhanced support to mobilize
private finance for development is needed. Both the public and private sectors have distinct roles to play toincrease domestic fiscal resource mobilization. The greater emphasis on working as One World Bank –combining public and private sector expertise to facilitate private capital and mobilize more domestic resources
will help ensure that public and private sectors complement, leverage, and enhance each other.
 Working with partners to strengthen accountability and efficiency: Stakeholders stressed: greater
engagement with civil society; more emphasis on transparency and accountability; improving governance andanti-corruption measures; and improving World Bank agility and efficiency. Enhanced civil society engagement
and other country-level partnerships will provide critical inputs to World Bank investments to better reachclients. Encouraging citizen engagement and social accountability in World Bank work will also enhanceaccountability and governance. Improving efficiency and effectiveness is a key element of the World Bank
evolution to increase speed and quality of delivery to clients.
In other engagements with governments, we also heard that the implementation of projects with World Bankfinancing can be slow, cumbersome, and expensive; that more research and knowledge are needed to inform public
and private development solutions; and that more hands-on support with implementation of World Bank-financed
projects and capacity building are required.

10.
Scaled-up financing from multiple sources will be required given the magnitude of needs.
Since no institution can meet these financing needs alone and public finances are often constrained, theWorld Bank must work in partnership with governments, the private sector, and other development partners
to support the ambition of the new vision and mission. Domestic resources, combined with financing fromthe private sector and the international community, will help generate economic growth and job creation,
improve opportunities for the most vulnerable, and support digital and other solutions to spur innovation.
The new playbook will include a focus on helping to increase domestic resource mobilization and enabling
and mobilizing private capital at scale to drive impact.

7

For IBRD/IDA, co-financing refers to funding from an external financier to supplement loans, credits, grants, or
guarantees for an IBRD/IDA project or program, and for IFC/MIGA, co-financing refers to a third-party financial
source for an investment made along-side IFC/MIGA’s investment.

4

11.
The availability of concessional financing will be essential to tackle global challenges, inparticular those of a global public good nature. While continuing to respond to the increasing
development needs of IDA countries, additional concessional resources will also be critical to incentivize
IBRD countries to address global challenges, particularly when there is a global public good element withspillover benefits. The effective, efficient, and transparent use of concessional blended finance can also
leverage private capital in high-impact projects by rebalancing risk-return equations.
III.

A New World Bank Playbook

12.
The World Bank is writing a new playbook to work with public and private sector partners
in delivering development solutions to clients in these extraordinary times. The new playbook
establishes how we operate to deliver on the new vision and mission, while building on and strengthening
the foundational approaches the World Bank has long relied on. The playbook reflects ongoing discussions
between Management and World Bank EDs and has been informed by inputs from a wide range of external
stakeholders (see Box 2). Since the Spring Meetings 2023, significant progress has been made to flesh out
the details of the proposed playbook and begin its implementation (see Annex 1). Remaining aspects will
be designed and implemented, following the Governors’ endorsement of this paper. Efforts to become abetter bank will continue, noting that details of some proposals will be further refined and decided between
Management and World Bank EDs post-Marrakech.
13.
The playbook introduces new operational reforms to deliver impact at scale for World Bank
clients. We need to enable clients, from the public and private sectors, to invest in development solutions
that respond to both persistent poverty and inequality as well as global challenges in a way that maximizes
impact at scale. The new playbook directly responds to this need. Changes to double down on impact
include: leveraging knowledge to drive impact; strengthening the country engagement cycle; scaling up
private sector enabling activities and private capital mobilization; supporting increased domestic resource
mobilization; enhancing crisis preparedness and response mechanisms; and launching a series of Global
Challenge Programs (GCPs) to deliver replicable and scalable approaches to critical global challenges. To
deliver this, we are modernizing four key aspects of our work: the One World Bank approach; operations
efficiency and effectiveness; people and culture; and partnerships with others. A new scorecard will help todrive impact and outcomes and monitor results of this new playbook.
a. Doubling Down on Impact
Knowledge
14.
The World Bank is launching a Knowledge Compact for Action to transform its approach toknowledge. Knowledge is a key World Bank comparative advantage and is pivotal to create impact throughdevelopment finance, policy dialog, and capacity building. Stakeholders confirm that the World Bank’s
knowledge contributes significantly to development results – but there is room to do better. Building on the2021 Strategic Framework for Knowledge, the new Compact will generate stronger alignment with global
challenges – producing country and global knowledge and integrating the best knowledge available fromall sources in World Bank engagements and operations. To support these outcomes, it will reinforce
knowledge verticals to guide our work at all levels of client engagement. Finally, it will be more outwardlooking, and will support clients more systematically with training, data collection, curation, analysis, anddissemination.

5

15.
The new Knowledge Compact is built upon the following commitments to deliver more
impact to clients and replicate development success:8
 Upgrading our knowledge products to support the new mission, global challenges, and Global Challenge
Programs, with an updated suite of country-level diagnostic reports (‘core analytics’) underpinningcountry engagements (Box 3). These core analytics will systematically consider challenges that acountry is facing, including ones that are global in nature. A more deliberate focus will also be put on
assessing barriers to private investment and how to enable and leverage private sector solutions toaddress development challenges.
 Establishing knowledge verticals, including on key development issues that require collaboration, toensure that the work we do is guided by integrated world-class knowledge and data aligned with our
mission goals.
 Generating, using, and sharing data more systematically to tackle the roots of poverty and inequality,and promote inclusion, resilience, and sustainability, so countries can design policies and prioritize
support where they are most needed.
 New training and capacity building for clients and staff to enhance skills, including the launch of WorldBank Academies; better leveraging of World Bank Hubs and representation offices to inform
policymaking; and promoting joint courses with academia and think tanks to create and disseminate
learning materials for clients and partners.
 Enhancing knowledge partnerships to be more strategic for our clients, stakeholders, and the public.
They will also aim at reaching the full membership of the World Bank – including advanced economies– through flagship publications. Value-added partnerships will also support building a more strategic
World Bank information architecture and in using innovative communication tools and social media toreach wider audiences.
 Improving knowledge processes and systems, including through cost-effective impact evaluation tools
to boost quality and impact, and more systematic use of digitalization and AI tools.
Box 3: Updated Core Analytics
The updated suite will include: the Country Climate and Development Report (CCDR), focusing on adaptation andmitigation and linkages between climate change and development outcomes; the Poverty and Equity Assessment(PEA), focusing on core poverty and inequality issues; the Country Economic Memorandum (CEM), focusing onprosperity and key economic sectors, with a plan to be revamped into a Growth and Jobs report; the Public Finance
Review (PFR), an expansion of the current Public Expenditure Review to focus on a country’s revenues as well as
expenditures; and an updated Country Private Sector Diagnostic (CPSD 2.0), reframed and focused on specificopportunities to increase private investment. For countries on the list of fragile and conflict-affected situations(FCS), Risk and Resilience Assessments will remain.

Country Engagement
16.
The World Bank’s country-based engagement model – an essential part of how we supportclients – will be aligned with the new vision and mission. The World Bank’s Country Partnership
Frameworks (CPF) will continue to be agreed with countries to reflect their development goals, the WorldBank’s comparative advantage, and the World Bank’s vision and mission. The country engagement process
will no longer include the Systematic Country Diagnostics as a stand-alone prerequisite of a CPF in eachcountry, but will draw on a synthesis of the enhanced set of core analytics (Box 3). Core analytics will be
undertaken with substantive engagement with the country. The CPF will identify areas to help countries
access a comprehensive range of public and private sector solutions, with a renewed focus on enabling andmobilizing both private capital flows and domestic resources. Reflecting client demand, the revamped
approach to country engagement will also place focus on work at the sub-national level to better support
8

The details will be further elaborated for discussion and consultation with the World Bank EDs.

6

municipalities, state/provincial governments, and sub-national utilities to strengthen policy/regulatory
capacity, enhance creditworthiness, and ensure that critical investments are made wherever they can bemost effective. The augmented country engagement approach will enable greater scale and enhance thefocus on country, regional, and global outcomes. Since country engagement will still be firmly rooted in acountry’s national development strategy, programming for poverty reduction and shared prosperity willremain central.
Enabling and Mobilizing Private Capital
17.
The World Bank will increase its engagement to enable private sector solutions, mobilize
private capital, and strengthen private sector development to achieve impact at scale. The World Bank
has embarked on a broad effort to better identify, develop, and rapidly deploy solutions that address thebarriers to private sector investment. The updated CPSD 2.0 will help identify concrete policy interventions
and provide the basis for policy reform dialog with governments as One World Bank to improve theenabling environment for private capital. Greater focus on private capital enabling work is a criticalprecursor to building a pipeline of bankable projects for future investment to scale up private capital
mobilization and meet evolution ambitions. This includes investment climate reform, capital market
development, support for financial sector development, advancing public-private partnership frameworks,
IBRD/IDA development policy operations, IFC Advisory and Upstream engagements, and MIGA’s
structuring expertise. Implementation steps are underway, including through new platforms and aggregationand securitization approaches to connect (institutional) investors with firms in emerging markets anddeveloping economies, the development of new asset classes, sharing data to help investors calibrate riskreturns, and the selective use of concessional finance. Efforts include: The new Private Sector Investment Lab, to identify actionable solutions to increase private
investment in developing countries. A key aim is to identify ways to improve the availability of
appropriate risk-return investments, which can be facilitated through blended finance and other means
to credit-enhance or de-risk investments.
 Enabling public access to the default and recovery data of the Global Emerging Markets Risk
Database (GEMs) Consortium, to increase investment risks transparency and overcome a key
constraint to private investment in developing economies. The Consortium is currently engaging withpotential users such as institutional investors, fund managers, commercial banks, and rating agencies
to inform the best approach to broadening access to this data in a way that meets investor requirements.
The Consortium is working towards releasing more private sector statistics and is also evolving into
GEMs 2.0. The World Bank is also reconstructing historical sovereign data spanning a longer time
period. This effort will translate in GEMs comprising more meaningful statistics for rating agencies
and other stakeholders interested in sovereign data. A Request for Proposals is in the process of being
sent to the G20 International Financial Architecture Working Group Secretariat and countries that haveexpressed an interest in hosting GEMs. A market survey is also being conducted to get a better senseof the types of metrics and data the private sector investors would be interested in.
 IFC’s development of the Warehouse-Enabled Securitization Platform (WESP) that will support
greater private capital mobilization in Paris-aligned impact loans to the private sector through unified
loan standards. This will pioneer an originate-to-distribute model for participating MDBs and otherdevelopment finance institutions (DFIs).
 IBRD’s exploration of a Private to Sovereign Climate Financing Investment Fund to directly
mobilize private capital from institutional investors to co-finance green public projects, which could
also be used to test originate-to-share or co-finance models.
18.
In addition, the new playbook will enhance the World Bank’s guarantee and capital market
instruments. Enhancements and new applications of World Bank guarantee instruments will be developed,
including: the new World Bank coordination and innovation center to develop joint guarantee products that7

can be supported by MIGA, IFC, or IBRD/IDA guarantee operations; improved and increased IBRD, IDA,
and IFC backstopping of risk-sharing facilities through fit-for-purpose guarantees to enable investments inclimate infrastructure and other nascent markets; using MIGA and IBRD guarantees to support private
investors refinancing IBRD loans; using MIGA political risk insurance in combination with contingent
liquidity facilities to crowd in institutional investors; and exploring private reinsurance of IBRD guarantees
to unlock access to larger volumes of capital on blended terms.
Domestic Resource Mobilization
19.
IBRD and IDA will expand support to client governments seeking to increase availability ofdomestic resources for critical development needs. This will entail creating fiscal space in a holistic way– not only through revenue policy and administration reforms, but also by addressing spending
inefficiencies across the budget and harmful subsidies. A dedicated PFR – an expansion of the current Public
Expenditure Reviews – will focus on a country’s revenues as well as expenditures, providing the analyticalbasis for this work. We will prioritize countries with low tax collection and/or inefficient tax structures
where increased domestic resource mobilization is most needed. Support will be based on the principle thattax structures should be equitable, progressive, efficient, transparent, and sustainable, with a strong focus
on addressing illicit financial flows, including through improving governance and anti-corruption measures.
The World Bank commits to step up support for tax systems that follow these principles, while responding
to country’s own needs and demand for such assistance. We also aim to increase support for green andgrowth-friendly tax policy and administration measures. This agenda will be undertaken in close
collaboration with the International Monetary Fund (IMF), the Organization for Economic Cooperation andDevelopment (OECD), and other development partners. Reforms and their implementation will besupported through the full spectrum of World Bank instruments. This new systematic approach aims to
improve the current World Bank practice, in which tax analytical work is done at the global level and withcountry-level engagements on an ad-hoc basis.
Global Challenge Programs
20.
The World Bank will launch a set of Global Challenge Programs. These will use replicable andscalable approaches to support countries to achieve development results with greater speed and impact,
while helping to ramp up response to global challenges. Each GCP will comprise a series of country-level
operations that are part of a broader, globally coordinated platform. GCPs will relate to the defined global
outcomes measured by the Corporate Scorecard, aligned with the SDGs (see Box 4 for the first six GCPs).
Each GCP will contribute to addressing one or more of the global challenges. Country-specific GCP
operations will be programmed, where countries wish, through the CPF. GCPs will leverage the One WorldBank approach and combine public and private capital and solutions, as well as co-financing from other
MDBs to address targeted global challenges. Lessons learned about operations effectiveness and efficiency
from the initial GCPs will also be mainstreamed across World Bank operations over time. GCPs will be one
platform available to countries to address global challenges, complementing other country-level WorldBank knowledge and financing support, and adapting to country needs such as FCV contexts.
21.
The client value proposition of the GCPs comes from the expected speed, scale, networking,and learning opportunities of working through a globally coordinated program. Key features include
access to the World Bank’s fast-track advice, guidance, and facilitation in establishing or joining
partnerships, and additional assistance such as Bank Facilitated Procurement for IBRD and IDA clients.
Partnerships for concessional financing will be facilitated with donors when interests align, including
through Trust Funds (TFs) and Financial Intermediary Funds (FIFs) such as the Pandemic Fund and Climate
Investment Funds. Early and systematic engagement with private investors through the GCPs, including
through upstream work, advisory projects, deal structuring, and by leveraging the broad range of tools
available for IFC and MIGA clients, will help mobilize private capital to support investments that address
8

key global challenges. Each GCP will embed systematic impact evaluation and learning platforms for WorldBank teams and clients to benefit from each other’s experiences as projects and programs evolve.
Box 4: Global Challenge Programs
Management solicited and evaluated GCP proposals from across the World Bank against seven criteria: (i) Line ofsight toward global challenges and One World Bank Approach; (ii) Standardized measurable outcomes and targets;(iii) Country demand; (iv) Well-defined set of interventions that are replicable and scalable with speed; (v) Ability
to mobilize and deploy public and private financing and solutions; (vi) Program support and knowledge; and (vii)
Incentives and Partnerships. The following GCP pilots were selected to proceed first, with the possibility to scale
up in the future to address additional global challenges as lessons from the GCP approach are learned. Management
is continuing to engage with the Board on the final design of these pilots, and the titles and specifics will be refinedand agreed before implementation:
1.

2.

3.

4.

5.

6.

Fast-Track Water Security and Climate Adaptation: to strengthen water security in client countries throughsystems change and scaling-up more sustainable water management and disaster risk reduction solutions. The
GCP, which relates to SDG 6, will support: (i) improved access to water supply and sanitation; (ii) improved
irrigation service delivery and water productivity; and (iii) flood and drought risk reduction through sustainable
water management and disaster risk reduction.
Energy Transition, Efficiency and Access: to increase access to affordable, reliable, sustainable, and modern
energy, by scaling up clean energy, phasing down fossil fuel use, and supporting just transition. GCP support
relates to SDG 7 and is designed around: (i) scaling up energy efficiency; (ii) expanding and improving access;(iii) increasing renewable energy integration; (iv) phasing down fossil fuels; and (v) decarbonizing hard-toabate sectors, including transport.
Enhanced Health Emergency Prevention, Preparedness and Response: to enhance capacity to prevent andprepare for health emergencies by strengthening health systems at country, regional, and global levels. The
GCP, connected to SDG 3, will pivot response to prevention, through: (i) building 'emergency-ready' healthsystems and (ii) mainstreaming One Health capacities to prevent and prepare for health emergencies.
Accelerating Digitalization: to accelerate digitalization at scale to enable innovation and adoption oftechnology. This GCP, will address a range of SDGs but is primarily related to SDG 17, promotes: (i) fasttracking affordable broad band for all; (ii) scaling up inclusive and safe digital public infrastructure; and (iii)
building digital skills for jobs.
Food and Nutrition Security: to help break the cycle of food and nutrition insecurity by 2030. This GCP
contributes to SDG 2 and will focus on: (i) strengthening food stability, availability, utilization, and access;and (ii) establishing and enhancing crisis preparedness, early warning, and early action systems at country,
regional, and global levels.
Forests for Development, Climate, and Biodiversity: to build a sustainable forest economy in critical forest
biomes. This GCP, related to SDG 15, will take an inclusive approach to support: (i) investments at scale inmanagement, restoration, and conservation of natural resources; (ii) creating and diversifying nature-based
businesses and jobs; and (iii) protecting the interests of indigenous people, smallholders, and small businesses.

Across GCPs, as these six programs are piloted, particular emphasis will be placed on Fragility, Conflict, andViolence. This will include a focus on implementation of GCPs in FCV countries, helping to address theinterlinkages between FCV and global challenges such as food security and water access.

Crisis Preparedness and Response Toolkit
22.
The World Bank crisis preparedness and response toolkit is being enhanced to help build
greater resilience for clients. Countries will have greater access to rapid response support when crises
occur, including through increased contingent financing; rapid access to a portion of undisbursed balances
in a country’s existing portfolio of IBRD or IDA financing through a new Rapid Response Option; andcatastrophe bonds embedded in IBRD or IDA financing operations as well as new types of parametric andother catastrophe insurance options. For the private sector, IFC is continuing to innovate and broaden its
toolkit of advisory and financing support to help its clients prepare for and manage during crises, including

9

trade and supply chain solutions, with additional support available from MIGA trade finance guarantees.
Crisis preparedness will be increasingly embedded upstream in the country engagement process, especiallyfor countries vulnerable to shocks and countries experiencing FCV. Technical assistance will be provided
to help countries assess their exposure to both short- and longer-term risks, informing their broader disasterrisk financing strategies as well as World Bank financing support. The One World Bank approach will
ensure that preparedness and response optimally involve both public and private sectors as essential
elements of disaster risk finance, including for example, a parametric insurance backstop provided by theprivate sector for MIGA-supported public sector projects and engagement with risk pools to enable private
risk capital. This work will continue beyond Marrakech, after the enhancements to specific instruments inthe toolkit are operationalized, including strengthening partnerships with other MDBs to help countries
optimize their crisis preparedness and disaster risk financing plans.
23.
As part of the broader crisis toolkit, the Climate Resilient Debt Clause (CRDC) is a specificenhancement being launched for countries most vulnerable to natural disasters. The CRDC will
provide countries the option to temporarily defer principal repayments on their IBRD and IDA loans in caseof a severe natural disaster, to reduce debt pressures during a crisis and free up domestic resources fordisaster response. As a first step, the World Bank has introduced CRDCs as an option available for newloans to small states as a particularly vulnerable group of client countries, while assessing the feasibility ofoffering CRDCs for their existing loans in a financially sustainable manner.
b. Modernizing Our Approach to Delivery
One World Bank
24.
A strengthened One World Bank approach will leverage the public and private sectors forenhanced client delivery and maximum impact. To successfully deliver with impact and at scale, we will
increasingly work as One World Bank through purposeful collaboration, coordination, and deployment ofour collective knowledge and instruments. Drawing on the comparative advantages of each World Bank
institution is critical to enable and mobilize private capital, ensuring that private sector finance and solutions
are pursued whenever possible as first-best options, and using scarce public sector resources only whennecessary and justified. This approach across IBRD, IDA, IFC, MIGA, and ICSID responds to calls wehave heard from clients and partners to streamline and simplify our country engagement.
25.
We have started enhancing our One World Bank approach, and more changes will be
adopted. Many aspects of the strengthened One World Bank approach are embedded throughout the new
playbook. This approach will start early in the country engagement process, through joint diagnostics and
One World Bank engagement with governments to determine priorities and coordinate programming that
identifies and delivers the optimal private or public sector solution. GCPs will facilitate the scale-up of joint
products or programs across World Bank institutions to respond to specific global challenges. ConsistentWorld Bank-wide metrics will be developed, for instance related to enabling private capital. A pilot is underconsideration for One World Bank country representation to better coordinate country engagement and offer
client countries optimal public and private sector solutions and instruments. Management will continue todevelop these efforts and engage with the World Bank EDs after Marrakech.
People and Culture
26.
Delivering on the new playbook requires the World Bank to attract and retain talent with theright skills, strengthen skills of existing staff, and set the right incentives to enable the One WorldBank approach. Quality and performance of staff are fundamental to the World Bank’s operational impact
and success. We must attract, retain, and motivate professionals of the highest caliber, and expand ourinstitutional skills and knowledge in areas of expertise related to the global challenges. To do so, we need10

to strengthen our competitive position worldwide, by better articulating and enhancing our overall
employment value proposition. This includes an enhanced recognition and incentives program to attract thebest talent and identify skill gaps needed to deliver on the institution’s new ambition. To achieve thesegoals, we are reviewing the World Bank’s compensation approach and considering an expansion of WorldBank awards programs to encourage One World Bank behaviors, promote private capital mobilization, andbetter recognize impact. Mechanisms for staff mobility across the World Bank will be enhanced to enableeffective talent deployment, knowledge sharing, and strategic alignment. Other initiatives include
reviewing the grading structure and labor model; strengthening leadership accountability for people
management; continuous listening to staff and ensuring staff skill development needs are addressed; andtaking concrete steps to foster a culture of inclusion, innovation, and responsible risk-taking.
Operations Efficiency and Effectiveness27.
To achieve greater development impact through the new playbook, the World Bank is taking
steps to improve operations efficiency and effectiveness. Feedback from clients and partners indicatesthat operations can be slow to progress. Alongside capacity constraints on the side of clients, especially incountries affected by FCV, this can also be due to World Bank bureaucracy and risk-aversion. We areresponding by ensuring that our operational approaches, instruments, and tools achieve speed and impact
in the delivery of development solutions.
28.
IBRD and IDA will modernize the operating model for delivery to increase the speed, scale,and quality of implementation to better serve our clients. Change measures will align with five guiding
principles: (i) build country capacity by better grounding in clients’ existing circumstances and supportingthem to strengthen capacities, institutions and systems; (ii) move from retail to wholesale by offering clients
scalable and programmatic approaches informed by the best country and global knowledge; (iii) apply arisk-based approach to project preparation, approval, and implementation to focus attention that is
proportional to risks and where it is most needed such as in low-capacity FCV countries; (iv) foster a cultureof partnership and trust, whereby all internal and external parties appreciate the mutual benefits of working
together, re-aligning incentives, and changing behaviors; and (v) focus on staff welfare and productivity as
we change the way we work. IBRD and IDA will increasingly use country systems in project and program
implementation, a gradual process as borrower capacity is systematically enhanced. Working within
existing parameters, Environmental and Social Framework (ESF) implementation will effectively use the
ESF’s risk-based approach, placing greater emphasis on stakeholder engagement and support to IBRD/IDA
clients, while still ensuring that ESF helps deliver high-quality projects. Management will also adopt
measures to streamline design and approval processes, including by delegating more responsibilities tofrontline teams with robust accountabilities at all levels. Increased use of programmatic approaches thatstrengthen long-term engagement with IBRD/IDA clients will enable delivering impact and outcomesthrough effective prioritization, and a focus on replicability and scalability. Changes to operational
procedures and processes will enable IBRD/IDA regions to reallocate funds in country portfolios more
quickly. Management and the World Bank EDs will have further discussions about the details of thesechanges beyond the 2023 Annual Meetings.
29.
IFC and MIGA will maintain the emphasis on streamlined and simplified approval processes
to ease the burden on their clients and achieve replicability and scale. IFC will continue to utilize its
recently streamlined Accountability and Decision-Making Framework that has allowed it to significantly
build its pipeline and delivery to its clients; leverage platforms to address development challenges at scale;introduce new or update existing approaches to quickly respond to emerging market opportunities andbusiness needs in a more agile fashion; remove duplicative processes; and leverage successes such as
Expedited Procedures for Existing Clients. MIGA looks for new ways to engage more efficiently andeffectively with its clients and partners to enhance impact. This includes new streamlined operational
processes for FY24 that are expected to support MIGA’s speed and quality of delivery. MIGA is also moving

11

select staff to the field, while optimizing the positioning of existing staff to be even more responsive toclients and partners.
30.
Implementing the new playbook will have significant budgetary implications. The World Bank
will undertake a comprehensive review of its budgetary needs and processes to deliver on the financing,
operational, knowledge, and partnership proposals of the new playbook. Management will engage withWorld Bank EDs on the budget needs and process changes required before the Spring Meetings of 2024.
These efforts will build on the IBRD/IDA and IFC FY18 capital increase package budget commitments inthe first five years of implementation (FY19-23).
Partnerships
31.
The World Bank will deepen partnerships with other organizations to maximize the impactof the new playbook. Partnerships are key to better serve clients, by enabling collaboration, increasingalignment on principles of engagement, creating and sharing data, and mobilizing co-financing andconcessional finance. The World Bank currently partners with a wide range of actors, ranging from the IMF,
the World Trade Organization (WTO), and the United Nations, to MDBs and other DFIs, to bilateral donors
and partners, the private sector, and civil society. But more can be done to strengthen our approach: We will develop a Partnership Charter that will articulate principles for establishing and working in
partnerships. Enhancing operational partnerships will require a One World Bank lens and clarifying
principles related to cost-sharing for public sector co-financing. Better incentives to partner will becreated by establishing framework and contracting arrangements, increasing communications, andimproving reporting on partnerships.
 Engaging with partners more actively at the country level will be a priority. This will include morecoordinated policy dialogue through country engagement based on core analytics. Working withpartners is particularly critical in fragile countries. Country-led partnerships will also be more actively
sought within specific sectors and programs. Joint analytics and research as well as transfer ofknowledge will also be key elements of strengthened country-level partnerships.
 Partnerships to engage on global challenges and global public goods will continue to grow. The WorldBank will explore further engagement with regional and global organizations and supra-nationals to
help set and implement international standards. Building on the IDA Regional Window and with theconsent of donors, additional opportunities will be sought to provide support at the regional level, via
the Global Public Good Fund (GPG Fund) to support regional operations in IBRD countries.
 Across these levels of engagements, partnerships with civil society are critical to ensuring development
impact. The World Bank engages with a wide range of civil society around the world to create lasting
solutions for people and the planet. Organizations that represent specific groups such as persons withdisabilities, children and youth, indigenous peoples, and other vulnerable groups, for example, arecritical to development outcomes. The World Bank will deepen its partnership with civil society,especially at the country and regional levels, to make the evolution process more effective.
32.
Improved coordination across the multilateral system will be a particular area of focus, bothfor knowledge and co-financing. The World Bank will strengthen cooperation with United Nations
agencies to enhance knowledge generation sharing, and data on global public goods, with a focus on theselected global challenges. Creating operations with other MDBs or DFIs and the private sector will also
be important. IBRD/IDA will work on a public sector Co-Financing Platform to engage MDBs andbilaterals to share information on lending pipelines, identify co-financing opportunities, and discusschallenges and best practices. The World Bank will also continue to work across its institutions with other
MDBs and DFIs to coordinate policies on procurement, ESF, and other requirements. MIGA has developed
an approach for expanding partnerships to scale up the use of political risk insurance and has signed
cooperation arrangements with several partner institutions. MIGA is also actively working with other12

MDBs to scale up access to trade finance through its trade finance guarantee instrument, and is proposing
a new application of its guarantee product that would reduce MDBs’ sovereign risk exposures, opening
headroom for additional MDB lending. IFC leverages other DFIs through the Master Cooperation
Agreement, and is strengthening partnerships through its work on the WESP and the GEMs.
Scorecard for Results
33.
The new playbook requires a new management tool to drive impact and outcomes, and weare revamping our Corporate Scorecard to meet this need. The Scorecard will monitor the collective
results of all World Bank financing institutions, reinforcing the One World Bank approach. The Scorecard
will be selective, focusing on a small number of thematically structured results to align with the new mission
as well as the SDGs, and replace the current expansive, three-tier Scorecard. The new Scorecard will serve
three primary purposes: to drive a unified focus on key outcomes; to manage with evidence; and tocommunicate results. Implementation of the new provisional Scorecard will require fundamental changes
to the World Bank’s results architecture, including scaling up investments in data, developing a moreconsistent approach to outcome orientation, and improving the collection and validation of results data. The
streamlined Scorecard (a provisional version with illustrative indicators is attached as Annex 2) moves
away from metrics on inputs or internal processes, to focus on those that incentivize a results culture. This
will drive impactful outcomes to which the World Bank contributes, in collaboration with clients andpartners. The new Scorecard will span FY24-30, covering the launch of the playbook with 2024 serving as
an initial transitional year, and concluding in line with the final reporting year of the SDGs.
34.
The illustrative indicators in the provisional Scorecard are organized around twelve thematic
outcome areas with a line of sight to the World Bank’s vision and mission. The outcome areas areintentionally selective to enable a focus on key outcomes; they do not, however, capture all development
challenges relevant for client countries. They cover the eight global challenges and six GCPs identified in
the evolution process, though not with a one-to-one mapping. While many of the indicators are still underdevelopment, the outcome areas will measure the World Bank’s contributions to client countries’
development, including building a dynamic private sector within countries by enabling and mobilizing
private capital. Reflecting the World Bank’s people-centered approach to development, the Scorecard
provides a snapshot of how many lives were improved by outcomes achieved through World Bank support.
These indicators will be reported side-by-side with higher-level impact indicators to position World Bank
results in the broader development landscape and measure global progress toward the World Bank’s visionof reducing poverty, increasing shared prosperity, and preserving a livable planet. These Scorecard
indicators will be supplemented by metrics that capture the context in which the World Bank operates, andcomplementary qualitative narratives will describe the World Bank’s contributions to building systems andpolicies that amplify the sustainability of results in client countries. Scorecard indicators will bedisaggregated wherever feasible to describe support to whom (by gender and youth), where (such as across
FCS and small states), and how (including through World Bank collaboration and partnerships). Additional
institution-specific and thematic monitoring and reporting, such as on IDA, FCS, gender, and climate(including Climate Change Action Plan commitments) among others, will continue in parallel to Scorecard
reporting.
IV.

World Bank Financial Model

35.
Increasing the financing capacity of the World Bank will be essential to deliver on the new
vision and mission, and to ultimately meet massive country development needs. Maximizing financing
from multiple sources – including domestic public resources, private sector resources, and additional
development partner resources – will be critical to achieving impact. These different financing resources
are complementary and not mutually exclusive: they address distinct market gaps across public and private
sectors and provide distinct risk-return profiles to donors and investors. The World Bank aims to scale up

13

financing provided to our client countries across these sources, both by leveraging our own balance sheets
and by mobilizing additional finance, including through partnerships and co-financing. As part of this, there
is a critical need for an increase in concessional resources, in particular to incentivize investments withcross-border benefits and to mobilize private investment. Significant steps have been agreed through theevolution process to further leverage existing World Bank resources while maintaining the triple-A rating,Preferred Creditor Treatment, and long-term financial sustainability, and discussions are ongoing about
ways to increase sources of concessional financing for clients.
a. Financing Capacity
IDA
36.
IDA remains the primary source of concessional financing for lower-income countries, and
the World Bank is taking steps to protect and increase resources available to IDA countries, with agreater focus on IDA after the Annual Meetings in the lead-up to the IDA20 Mid-Term Review (MTR)
and the IDA21 Replenishment. To help IDA countries deal with recent multiple crises, the Crisis Response
Window Plus (CRW+) was created, as part of the IDA Crisis Facility. The final size of the Crisis Facility
will be announced at the IDA20 MTR in December, after the pledging period ends. IDA is taking additional
measures to address its short-term financing gap, such as cancellation and recommitment of unused
committed balances and, subject to favorable market conditions, issuing additional long-term fixed ratebonds to support FY24/25 financing. To strengthen IDA’s medium- to long-term financing capacity, further
measures will be assessed as part of the IDA20 MTR in December 2023 and IDA21 negotiations throughout
2024. Strong donor support will be needed to significantly ramp up the next IDA Replenishment.
IBRD
37.
Significant steps have been taken to increase IBRD lending capacity. Balance sheet
optimization measures endorsed at the Spring Meetings, many of which are in line with therecommendations of the G20 CAF Report, have already created up to US$50 billion in additional lending
capacity over the next 10 years. These measures include: (a) lowering the policy minimum equity-to-loan(E/L) ratio to 19 percent; (b) increasing the limit on shareholder bilateral guarantees by US$5 billion; (c)preparing for a pilot for issuing up to US$1 billion of hybrid capital in the capital markets; and (d) Board
approval for pursuing removal of the Statutory Lending Limit (SLL) from IBRD Articles.
38.
Additional steps to increase IBRD lending capacity are being proposed, with implementation
contingent on the interest of shareholders and development partners. Further IBRD balance sheet
optimization measures, including via path-breaking innovative capital instruments, have the potential tosignificantly boost IBRD lending capacity. Table 1 below summarizes this based on indicative asks toshareholders and development partners, with the potential for further adding tens of billions to IBRD’s
lending capacity. These proposed measures9 include: A further US$5 billion increase in the limit on shareholder bilateral guarantees.
 A US$1 billion guarantee from the Asian Infrastructure Investment Bank (AIIB).
 A portfolio guarantee platform – a shared approach to risk, with shareholders stepping in to provide
coverage if countries are unable to repay their IBRD loans on time – to provide additional IBRD
leverage and make more financing available to clients.
 Raising non-voting capital through Shareholder/Development Partner Hybrid Capital Bonds,
denominated in hard currencies or Special Drawing Rights, giving shareholders and other partners an
9

The proposed measures, along with the ‘preferencing’ approach described in paragraph 40, also respond to theinnovative fundraising mechanisms (“Global Challenges Funding Mechanisms”) proposed in the report of an
Independent Expert Group, commissioned by the G20.

14

opportunity to invest in bonds with special leverage potential. These potential non-shareholder
development partners could include central banks, fully government-owned agencies, non-member
official institutions, interested donors, sovereign wealth funds, trust funds, foundations, philanthropies,
and others.10
Increased value from callable capital could enable greater ability for IBRD to absorb risk and expand
its lending, via shareholders clarifying call and payment procedures on existing forms of callable
capital, and/or specifying the conditions in a manner that can address current limitations.



Table 1: Summary of Measures to Increase IBRD Capacity
Impact on IBRD Annual Lending Capacity
Lowering minimum E/L ratio to
19% from 20%
Increasing bilateral guarantee
limit by US$5b (from US$10b to
US$15b)Status
Implemented

Estimated increase over 10 years+US$40b+US$5b

Implemented

Endorsed
at SMsAdditional
Measures

Hybrid capital from capital
markets (up to US$1b)

Pilot endorsed by Board,
Issuance in FY24/25+US$6bRemove SLL from IBRD
ArticlesGovernors approved theresolution; Members
approval is in process.

n.a.*

Implemented+US$5bAgreement being
finalized for signing
Ready for shareholder
commitment at
Marrakech
Ready for shareholder
commitment at
Marrakech+US$1bIncreasing bilateral guarantee
limit by US$5b (from US$15b to
US$20b)AIIB guarantee (US$1b)
Portfolio guarantee platform
Hybrid capital

Clarifying call and payment
procedures on existing callable
capital and developing optimal
trigger conditions for a call
Enhanced callable capital

Subject to shareholder
agreement and rating
agency treatment+US$60b(If eligible shareholders provide
US$10b Portfolio Guarantee)+US$40 b(If shareholders/development
partners provide US$5b Hybrid
Capital)(TBD – see description in
footnote 11)

Further shareholder
TBD
discussions required andsubject to rating agency
treatment* Removal of SLL is necessary to enable IBRD to fully utilize the additional lending space created by the various
balance sheet optimization measures.

39.
After the Marrakech meetings, work will continue to realize the potential of these new
instruments for scaling up development finance. IBRD will meanwhile continue to develop the capital
market hybrid capital instrument. We will continue to work with shareholders on proposals to increase value

10

Partnerships with non-shareholder development partners in innovative capital instruments will be subject to thecompletion of due diligence process.

15

from callable capital for IBRD to absorb risk and expand lending,11 building on the discussions we havealready had with the Board on an Enhanced Callable Capital proposal. We will also continue to explore
other measures to further expand IBRD’s lending and mobilize resources for development.
40.
While unrestricted contributions would be most effective through mechanisms such as
portfolio guarantees and hybrid capital, some shareholders and other contributors may provide
additional capacity only if linked to their thematic preferences. The proposed balance sheet
optimization measures could be complemented by arrangements that would allow shareholders and othercontributors to link their contributions to specific uses (‘preferencing’), thereby attracting additional
funding from development partners and supporting incentives, for example, to IBRD countries to enable
investments that address global challenges. Many shareholders representing the Bank’s client countries
have expressed concern with the potential financial, operational, and governance implications ofpreferencing. It will be important to ensure that any preferencing approach remains consistent with Boarddriven strategic priorities, the goal of promoting operations efficiency, and the value proposition of IBRD
as a model where country demand drives allocations. Management and World Bank EDs are continuing
discussions about the feasibility of preferencing and potential principles for it.
IFC
41.
IFC will leverage its existing capital base to meet the ambitions of its 2018 capital package
and the World Bank evolution. A broad range of efforts are underway in IFC to support future
mobilization growth. To grow private sector investment opportunities, IFC will further strengthen its
origination capabilities and utilize its Upstream approach to expand the pipeline of bankable projects. IFC
will leverage the One World Bank approach in support of private capital facilitation, including through the
deployment of more blended finance where appropriate. IFC will also deepen collaboration with new andexisting partners, in particular increasing reach to institutional investors, and explore innovative means
through the pooled expertise of the Private Sector Investment Lab. IFC will continue to scale the use ofmobilization funds (e.g., Managed Co-Lending Portfolio Program One Planet, Financial Institutions
Growth Fund III) and raise capital for IFC’s equity investments through IFC Emerging Markets
Sustainability Funds, managed by the Asset Management Company. IFC will further pioneer an originateto-distribute model (i.e. through the WESP) to efficiently scale mobilization to maximize impact by creatinga new asset class based on underlying DFI/MDB loans. Finally, IFC will scale up its successful experiencein private capital mobilization.
MIGA
42.
MIGA will deploy its capital-efficient financial model to advance the new vision and mission,working as One World Bank. MIGA aims to support an ambitious level of guarantee business, expanding
the use of its existing instruments, innovating a new toolkit to align with the new playbook, and accelerating
scalable, replicable, and efficient platform approaches in support of mobilizing private finance for solutions
to global challenges, especially through engagement with the Private Sector Investment Lab. MIGA will
work more purposefully with IBRD/IDA and IFC through knowledge sharing, the new World Bank
coordination and innovation center for guarantees, an enriched country engagement process, and the GCPs
at the same time as deepening relations with external partners in the public, private and philanthropic
communities. As part of this enhanced collaborative approach, MIGA is also proposing a new program thatwould deploy MIGA’s guarantee instrument (Non-Honoring of Sovereign Financial Obligations) to help
alleviate headroom constraints at MDBs.
11

The leveraging benefits of callable capital are subject to rating agency treatment. Based on clarifications of IBRD
call triggers and shareholder payment procedures and timeline, additional uplift of the IBRD callable capital proposals
may be possible; but this would require methodological changes by the ratings agencies, which are likely to take time.

16

b. Concessional Finance43.
The concessional resources that are already available to the World Bank to support its clientsare insufficient to deliver on the new vision and mission, in particular for IBRD-eligible countries.
The concessional resource flows available to clients typically originate from TFs, FIFs, and partner cofinancing with IBRD/IDA, which do not have the necessary magnitude, predictability, flexibility, andoverall strategic orientation. As a core guiding principle, there is widespread agreement that increasing
concessionality for clients in IBRD-eligible countries must not be at the expense of IDA countries. In turn,expanded concessionality in IBRD-eligible countries will be key to incentivize public and private clients toinvest in addressing global challenges, especially those with cross-border impacts, and to support thecommercial viability of priority projects to drive private sector participation and innovation.
Concessionality incentives could be offered in many different forms, including grant financing alongside
IBRD financing, buy down of interest, or longer tenors. Given the scarcity of concessional resources, it isimperative that these funds are also available to sufficiently catalyze private capital as well as private sector
investment opportunities, including from institutional investors, and are used judiciously and transparently.
Due attention should also be paid to non-financial incentives such as commitments in the context of acountry’s Nationally Determined Contributions (NDCs). Management and the World Bank EDs areconverging towards a set of common One World Bank principles for the allocation of concessionality (seeBox 5).12 Moreover, World Bank institutions have agreed to strengthen modalities around donor outreach,with the objective of ensuring that new fundraising for global challenges and addressing market distortions
considers the complementary roles of the public and private sector. In allocating concessionality, IFC
already follows the Enhanced DFI Blended Concessional Finance Principles for Private Sector Projects andestablished internal blended finance governance. As a concessionality framework for IBRD is developed(including an allocation framework and identifying potential sources and mechanisms for raisingconcessional financing), Management will work with shareholders and development partners to fundraise,building on existing mechanisms as well as mobilizing new sources of additional financing.
44.
The World Bank will seek to build on existing mechanisms to increase financing for clients in
IBRD countries, in partnership with donors. This effort would focus on TFs, FIFs, and partner cofinancing with IBRD/IDA, as well as augmenting the existing GPG Fund with contributions from donors
and any hybrid capital coupon payments relinquished by shareholders and development partners.
 TFs and FIFs: Partnering with TFs and FIFs could be an avenue for the World Bank to mobilize
additional concessional funding for clients in IBRD-eligible countries, within the existing mechanismsof each fund for allocating concessional resources. Measures to better utilize TFs and FIFs include: (a)strengthening World Bank partnership with FIF stakeholders (including to co-finance GCPs and private
sector operations implemented through IFC and MIGA); (b) developing programmatic approaches; (c)deploying concessional funds to support mobilization approaches/ platforms, such as WESP, that aim
to attract private institutional investor capital at scale; (d) adding more grant-like resources for private
sector projects (where the ratio of concessional funds to investment can be significantly higher), in
addition to the returnable capital instruments that have been historically available; and (e) simplifying
funding approval procedures.
 Co-financing: Partner co-financing of IBRD/IDA funding will be an increasingly important andeffective mechanism that can crowd in resources and enhance alignment. Steps to improve and expand
co-financing will include a review of the World Bank’s cost-recovery framework, as well as work under
the new playbook to create a public sector Co-Financing Platform to engage and leverage MDBs and

12

The proposed common World Bank concessionality principles are aligned with and complementary to existing
principles for concessionality in private sector activities, including the DFI Enhanced Blended Finance Principles forPrivate Sector Projects Principles. The proposed common World Bank principles are not intended to override existing
legal agreements, such as trust fund agreements, with donors.

17bilaterals on public sector projects, and continued efforts to coordinate policies, procurement, and ESF
requirements for operations with co-financing partners to better support clients.
GPG Fund: The current IBRD GPG Fund will be augmented – coupled with a parallel multi-donor
trust fund and allowing contributions from non-shareholders – to mobilize additional concessional
financing to address GPGs in IBRD-eligible countries. The expanded Fund will be designed to alignwith agreed common World Bank concessionality principles.
Box 5: Draft Principles for the Allocation of Concessionality13

 Providing concessionality for IBRD countries that is additional to IDA concessionality: As a high-levelobjective, concessionality for IBRD-eligible countries should be additional to the concessional resourceenvelope available to lower-income countries.
 Addressing global public goods and domestic market failures: Concessional financing should prioritize
global public goods and domestic market failures and be additional both with respect to markets and domestic
public resources.
 Mobilizing finance for development: Concessional funds should be allocated to eligible activities that: (i) arein line with the country’s development priorities and embedded in a country-based development model;
especially for public sector projects; (ii) combine knowledge transfer and financial support in a single package
to the extent feasible; (iii) have a demonstrably positive development impact; (iv) generate sustainable outcomes;(v) are commercially viable (for private sector investments, as applicable, after allocation of concessional funds);
and (vi) catalyze market development and mobilize private capital (as applicable).
 Providing minimum concessionality and preventing allocative distortions and moral hazard: To preventthe unintended creation of perverse incentives or market distortions through the expanded access to concessional
resources, it is critical that: (i) the grant element reflects the minimum concessionality required for a given
IBRD-eligible country to be willing to borrow for public sector projects; (ii) responsible borrowing behavior isfostered; and (iii) private sector investments are not crowded out.
 Promoting transparency, accountability, and simplicity in the use of concessional resources: The
mobilization, administration, and allocation of concessional resources should: (i) adhere to high standards,
including in areas of applicable corporate governance, environmental impact, integrity, transparency, anddisclosure; and (ii) strive for procedural and administrative simplicity to reduce transaction costs.

45.
Fundraising from non-member public and philanthropic sources will be explored to expand
the pool of concessional resources for clients. This approach to fundraising represents mostly new
territory for the World Bank and would require carefully balancing governance considerations with thethematic preferences of non-member contributors such as sovereign wealth funds and philanthropies.
Furthermore, mechanisms such as Hybrid Capital, which do not affect voting rights, could be a source ofconcessional finance from philanthropies and sovereign wealth funds via the option to partially or fully
relinquish coupon payments. IFC and MIGA are jointly exploring the development of a global multi-donor,
multi-thematic blended finance fund that would aim to raise financing from non-member sovereign andphilanthropic sources to provide concessional funding for private sector projects that address global
challenges and local market distortions. A replenishable IFC-MIGA multi-donor fund would increase
predictability and consistency and fill urgent funding needs to address global development challenges.
46.
As part of developing the concessionality framework, Management will assess the potential
use of vulnerability criteria for the allocation of concessionality. There is a clear need to ramp up funding
to support IBRD clients with fragility as well as those with vulnerability to economic shocks, natural
disasters, and climate change, which may require concessionality, especially to encourage uptake in IBRD
countries. For IBRD countries, this could involve including vulnerability criteria for IBRD eligibility andallocation decisions, based on the development of a vulnerability assessment methodology, with due

13These draft principles are under discussion and have not been approved by Management or the World Bank EDs.

18

attention to prudential risk considerations. The vulnerability assessment could also be applied to consider
further expanding IDA eligibility on the same basis.
V.

Conclusion

47.
The World Bank has been on the move to become a better bank since the first call for WorldBank evolution one year ago. We have set a new vision and mission in line with our ambition to help
ensure that the world achieves the SDGs and addresses the global challenges that are increasingly affecting
countries around the world. We have created a new playbook with solutions to achieve this ambition. With
the endorsement of the Governors, we will implement the new playbook and continue to evolve toward abetter and bigger bank that is fit-for-purpose to respond to the most pressing needs of people and the planet.
48.
But more is needed to fully respond to existing needs, and there has never been a more
important moment for stepped up global action. MDBs offer high value for money to the international
community due to their leveraging model. The World Bank’s ongoing efforts toward becoming a betterbank further enhance its value proposition. The proposed financial measures currently under review areimportant steps to increase World Bank capacity to support our clients. With strong support fromshareholders, these innovative balance sheet optimization mechanisms have the potential to significantly
add to IBRD’s financing capacity. Investing now to address the SDGs and global challenges will save future
costs as a result of insufficient action today. Significantly more could be done for clients by mobilizing new,additional resources for the World Bank – especially by maximizing IDA replenishments to address theneeds of the poorest countries, and with a general capital increase for IBRD. After we deliver a better bank,
we will need to be a bank that is bigger than can be achieved through balance sheet optimization and other
CAF measures alone. With Governors’ support, Management and World Bank EDs could work together tolay out the steps to further increase the World Bank financing capacity.
49.
With the Governors’ endorsement, Management will adopt the new World Bank vision andmission and move forward with the new playbook and proposed financing measures. Management
will continue to engage with the World Bank EDs as we move into implementation of these measures.
Feedback is invited on the following:a) Do Governors endorse the new World Bank vision and mission?
b) Do Governors endorse the elements of the new World Bank playbook and proposed financing
measures?
c) As we deliver a better bank, what are the views of Governors regarding the financing capacity of
the World Bank to support the new vision and mission?

19

References
Financial Sustainability Board (2002). Global Monitoring Report on Non-Bank Financial Intermediation.
Basel: Financial Stability Board.
Independent Experts Group (2023). Strengthening Multilateral Development Banks: The Triple Agenda.
Commissioned by the Group of 20 (G20).
Mercedes Garcia-Escribano, Mauricio Soto, David Amaglobeli, Vitor Gaspar and Delphine Prady (2019).
Fiscal Policy and Development: Human, Social, and Physical Investments for the SDGs. IMF Staff
Discussion Notes 2019/003. Washington, DC: International Monetary Fund.
Rozenberg, Julie and Marianne Fay (2019). Beyond the Gap: How Countries Can Afford the Infrastructure
They Need while Protecting the Planet. Sustainable Infrastructure. Washington, DC: World Bank.
27th Conference of the Parties to the United Nations Framework Convention on Climate Change. Deliveringfor People and the Planet. 6 to 20 November 2022, Sharm El-Sheikh: COP27.
United Nations (2023). United Nations Secretary-General’s SDG Stimulus to Deliver Agenda 2030. New
York: United Nations.
United Nations Secretary General (2019). Statement and Messages. SG/SM/19807-IHA/1472-OBV/1927.
New York: United Nations.
World Bank (2022). Poverty and Shared Prosperity 2022: Correcting Course. Washington, DC: WorldBank.
World Health Organization (2021). Climate Change and Health Factsheet. Geneva: World HealthOrganization.

20

Annex 1: Summary of Agreed Evolution Deliverables as of Marrakech

Evolution Process Deliverables

Discussed
anddecided14

Discussion
ongoing,
not yetdecidedA New Vision and Mission
Our Direction
Establish new vision and mission
Define eight global challenges
A New World Bank Playbook
Doubling Down on Impact
Knowledge
Introduce new and updated knowledge products, adapted to the enhanced mission
Define and establish Knowledge Compact
Country Engagement
Reframe core analytical products (in line with new vision and mission)
Consider regional and global challenges more systematically within existing CPF
framework
Increase upstream coordination on country-level programming to determine
appropriate mix of public and private sector solutions and jointly identify
investment opportunities.
Enabling and Mobilizing Private Capital
Engage the private sector more, including through the Private Sector Investment
Lab
Upgrade Country Private Sector Diagnostics as core analytical productIncrease public access to the Global Emerging Markets default and recovery rates(GEMs)
Launch design of the WESP and develop an originate-to-distribute model incollaboration with MDB community
Scale up green bond structure backed by a contingent liquidity facility and
MIGA’s political risk insurance
Scale up support for risk-sharing facilities that enable climate financing throughWorld Bank guarantees, including IBRD/IDA guarantees
Explore engaging the private insurance and reinsurance markets to cover Bank
exposure to IBRD guarantees
Explore MIGA or IBRD/IDA guarantee products to mobilize private capital torefinance IBRD loans
Explore the launch of a Private to Sovereign Climate Financing Investment Fund
Mobilizing Domestic Public Resources
Establish PFRs as a core diagnostic
Seek to increase policy-based and investment lending support to strengthen
domestic resource mobilization for countries with low tax collection rates
Strengthen partnerships with key institutions such as the IMF

14

Most deliverables marked as “decided” will require an implementation period, as laid out in individual notes
discussed in Phase II of the Board engagement. “Decided,” in the context of the evolution process discussions, refers
to agreement between Management and the World Bank EDs to move forward with the implementation – not fulldecision on details. Status is as expected by the 2023 Annual Meetings in Marrakech.

21

Evolution Process Deliverables
Global Challenge Programs
Launch the development of Global Challenge Programs
Select pilots for GCPs
Launch GCP pilots
Crisis Preparedness and Response Toolkit
Establish a Rapid Response Option to allow countries to use undisbursed funds
for emergency response
Increase country access to IBRD and IDA contingent financing
Launch Climate Resilient Debt Clauses for the most vulnerable countries
Design a parametric insurance backstop for MIGA-enabled public sector projects
Assist private sector clients in crises preparation and response
Scale-up issuance of catastrophe bonds, insurance, and other parametric products
to transfer disaster risk to the private sector
Modernizing Our Approach to Delivery
One World Bank
Increase the use of One World Bank metrics, including through the new
Scorecard, as well as institution-wide metrics related to enabling private capital
Establish coordination and innovation center on guarantees
Leverage staff incentives and flexibilities to promote World Bank collaborationand cross-institutional mobility
Launch a pilot for One World Bank country representation
People and Culture
Review of incentives
Labor model review
Review of talent management and career development framework
Operations Efficiency and EffectivenessEnable regions to reallocate funds in portfolio quicker to better meet client needs
Scale-up programmatic approaches for financing to facilitate replicability andscalability
Launch client capacity building and efficiency in implementation for impact under
the ESF
Assess administrative and operational staffing needs and budget of new playbook
Partnerships
Develop a Partnership Charter
Use country engagement tools and analytical products to strengthen dialogue andcoordination with partners at the country level
Strengthen incentives and mechanisms to increase global and regional
partnerships across the multilateral system
Scorecard for Results
Define provisional World Bank Corporate Scorecard
Adopt final Scorecard
World Bank Financing Model
Financing Capacity
IDA
Fundraise for CRW+
Explore measures to strengthen medium-term financing capacity

22

Discussed
anddecidedDiscussion
ongoing,
not yetdecidedEvolution Process Deliverables
IBRD
Lower minimum E/L ratio to 19% from 20%
Increase bilateral guarantee limit by US$5b (from US$10b to US$15b)
Pilot hybrid capital from capital markets (pilot up to US$1b)
Remove SLL from IBRD Articles
Increase bilateral guarantee limit by US$5b (from US$15b to US$20b)
Introduce AIIB guarantee (US$1b)
Establish portfolio guarantee platform
Develop shareholder hybrid capital option
Clarify call and payment procedures on existing callable capital
Explore enhanced callable capital
Consider augmenting donor interest in IBRD balance sheet optimization measureswith thematic preferencing
IFC
Leverage internal efficiency measures to meet ambition of the new vision andmission of the World Bank
MIGA
Target an ambitious level of guarantees and private capital mobilization throughnew toolkit, the One World Bank, and enhancing partnerships
Introduce Non-Honoring of Sovereign Financial Obligations cover to MDBs fortheir exposure to sovereign loans
Concessional finance
Identify sources of concessionality – augmented GPG Fund, Umbrellas, FIFs, cofinancing
Establish principles of concessionality for World Bank
Define allocation framework of concessionality for IBRD-eligible countries
Explore multi-donor trust funds for IFC and MIGA to provide concessional
funding for private sector operations

23

Discussed
anddecidedDiscussion
ongoing,
not yetdecidedAnnex 2: Provisional Corporate Scorecard for the World Bank with Illustrative Indicators24