IFC BOARD

LETTER FROM THE IFC BOARD

Over the last year, our shareholders
asked the World Bank Group to provide
exceptional support in response to thecompounding crises of the COVID-19
pandemic and the war in Ukraine, in
addition to its ongoing and extensive
portfolio of work. This resulted in
unprecedented levels of financing by theWorld Bank Group in fiscal 2022, including$70.8 billion by IBRD and IDA, $32.8 billion(including mobilization) by IFC, and$4.9 billion in guarantees by MIGA.
By financing health operations, vaccine procurement,
and other initiatives, the World Bank Group has
helped developing countries and their people andbusinesses continue to address the impacts ofthe pandemic on poverty, health care, human andeconomic development, and well-being. The WorldBank Group has also rapidly addressed the farreaching consequences of a new crisis, the war in
Ukraine. The spillover effects are many — beyond theimpacts related to refugees, food security, and energy,
the conflict poses uncertain and potentially lasting
consequences on trade channels, foreign investment,
global confidence, and financial stress. Anchored by theWorld Bank Group’s twin goals of poverty reduction
and shared prosperity, with a focus on fosteringgreen, resilient, and inclusive development, the Board
discussed and approved several important initiatives
and programs to respond to these crises.
2 IFC ANNUAL REPORT 2022

But the needs are many, and more can be done. The
World Bank Group is working with donor countries
to mobilize financial support through diverse channels,
including the Fund for Pandemic Prevention,
Preparedness, and Response, as well as special
guarantees and grant financing for Ukraine. The
World Bank Group is also working with stakeholders
on the ground to implement important programs,
such as the World Bank Group Climate Change Action
Plan (CCAP), IFC’s Global Health Platform, MIGA’s
Fast-Track COVID-19 Response Program and theWorld Bank’s COVID-19 Strategic Preparedness andResponse Program, as well as efforts to address debt
vulnerabilities, boost the resilience of food systems, andsupport energy access and transition. We continue tostress the need to address the key drivers of fragility
and poverty — in Afghanistan, Haiti, Sudan, Yemen andelsewhere — in order to build human capital, reduce
inequality, promote jobs, and foster economic recovery.
Given the immense need for financing, the IDA20
replenishment process was advanced by a year, anda $93 billion replenishment package was agreed toin December 2021. This financing is the largest evermobilized in IDA’s 61-year history and will help lowincome countries respond to today’s multiple
crises and build a greener, more resilient, and more
inclusive future. Donor countries also agreed to areview of IDA voting rights, resulting in a significant
adjustment to its voting rights framework. This will
help ensure fairness among all donors while protecting
and enhancing recipients’ voting power.
At the 2021 Annual Meetings and 2022 Spring
Meetings, the Development Committee asked theWorld Bank to help countries address immediate
food security and social protection needs; to help

manufacture and deploy vaccines, invest in diagnostics
and therapeutics, and strengthen health systems;
to continue supporting debt sustainability andtransparency; to build on the CCAP to protect natural
capital and biodiversity; to promote digitalization; toincrease private sector financing mobilization; and,with the IMF, to coordinate actions and orient country
engagements toward a green, resilient, and inclusive
economic recovery. It urged the World Bank to work
toward these objectives while remaining focusedon the twin goals of ending extreme poverty andboosting shared prosperity as well as helping countries
achieve the Sustainable Development Goals.
We strongly support the important efforts undertaken
this year by World Bank Group senior leadership andstaff to address racial injustice and workplace culture
through recommendations from the staff task forces.
We welcome these improvements as we transition toa hybrid work model. We were also pleased to travel asa group to client countries in fiscal 2022 — the first timesince the pandemic started — and observe in person
the impact of the World Bank Group’s engagement.
We sincerely appreciate the ongoing commitment ofstaff across the institutions, including our own teams,
to the World Bank Group’s mission and their hard
work during these exceptional and challenging times.
We also extend a special thanks to the Emergency
Management Team, who worked tirelessly to bringus back into our offices safely and securely after an
extended period of home-based work.
Amid the many current crises, the World Bank Group
stands ready to help countries and people across the globe
as they work to address human and economic challenges
and achieve progress on the path of development.

PHOTO SEATED BOTTOM, LEFT TO RIGHT:

PHOTO STANDING TOP, LEFT TO RIGHT:

Katharine RechicoCanadaMatteo Bugamelli
Italy

Alphonse Ibi Kouagou
Benin

Takashi Miyahara
Japan

Michael Krake
Germany

Koen Davidse
The Netherlands — Co-Dean

Nigel Ray
Australia

Katarzyna Zajdel-Kurowska
PolandAdriana Kugler
United States

Taufila Nyamadzabo
Botswana

Monica E. Medina
Peru

Lene Lind
NorwayRoman Marshavin
Russian Federation

Arnaud BuisséFranceErivaldo Gomes
BrazilAbdulmuhsen Saad Alkhalaf
Saudi Arabia

Richard Hugh Montgomery
United Kingdom

Mohd Hassan Ahmad
Malaysia

Eva Valle Maestro
Spain

Armando ManuelAngolaMerza Hussain Hasan
Kuwait — Dean

Rajesh Khullar
India

Abdelhak Bedjaoui
Algeria

Hayrettin Demircan
TürkiyeJunhong Chang
China

IFC ANNUAL REPORT 2022

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LETTER FROM DAVID MALPASS
President of the World Bank GroupThe world is facing dangerous crises that are hammering developing
countries, hitting the poor and vulnerable, and worsening global inequality.
High inflation, war in Ukraine, large macroeconomic imbalances, andshortages of energy, fertilizer, and food have caused the sharpest global
economic downturn in 80 years, compounding the death tolls, economic
shutdowns, and school closures of the COVID-19 pandemic. Low- and middleincome countries now face surging prices for natural gas and fertilizer and theworst food crisis in a decade, as they work to achieve progress on long-term
development needs­— including clean water, electricity access, reading skills,
quality infrastructure, and climate-related investments.
In the global fight to alleviate poverty and raise living standards, 2022 is likely to be one of the worst years in
decades. Real median income has declined further in many countries, and the tragic reversals in development
during the pandemic have worsened. Our June Global Economic Prospects report highlighted the risk of stagflationand the concentrated harm to the poor. Inequality is a prominent destabilizer, with global capital and income
allocated primarily to high-income countries through their fiscal, monetary, and regulatory policy choices.
Inequality is expected to worsen in coming years, leaving development goals out of reach for many.

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The World Bank Group is responding to thesechallenges with speed, clarity, scale, and impact.
We’ve committed two consecutive surges of financing,analytical work, advocacy, and policy advice to support
people, preserve jobs, and restore growth — first,$150 billion in response to the COVID-19 pandemic, andnow a 15-month $170 billion response to the food crisis
as well as the war in Ukraine and its spillover effects.
Since the start of the pandemic through fiscal 2022, theWorld Bank Group has provided over $14 billion to help
more than 100 countries respond to the health impactsof COVID-19 and vaccinate their people.
In fiscal 2022, IBRD committed $33.1 billion, including
support for more than 45 middle-income countries.
This includes $300 million to help Türkiye scale up
private sector investment in geothermal energy.
IDA committed $37.7 billion for grants and highly
concessional loans to over 70 countries, including$645 million to support food system resilience andemergency response in Burkina Faso, Cameroon, Mali,
Mauritania, Niger, and Togo. I welcomed our IDA
partners’ agreement in December 2021 to advance the
IDA20 replenishment by one year. Their record threeyear contributions of $23.5 billion will anchor IDA’s
financing of $93 billion for fiscal 2023–25 and help thepoorest countries address urgent priorities — including
jobs and economic transformation, human capital, thereversal in learning and literacy, gender, climate change,
and fragility, conflict, and violence (FCV) — and movetoward restoring growth.
Despite challenging economic headwinds, IFC provided
strong support to the private sector with commitment
volumes totaling $32.8 billion (including mobilization)in fiscal 2022, building on $31.5 billion of investments
in fiscal 2021 and focusing on maximum impact. Asbanks cut back on trade finance, IFC is stepping in to
keep import/export businesses operating despite theconstraints they face. In fiscal 2022, IFC’s commitments
reached $9.7 billion in trade finance, the highest
level ever; nearly 75 percent of this was invested in
IDA countries and countries affected by FCV. In one
example, Coris Bank in Burkina Faso received IFC tradefinance to import rice from various countries.

MIGA issued $4.9 billion in guarantees to help countries
achieve their development goals. These efforts will
provide some 15 million people with new or better
electricity service and enable $1.9 billion in loans,including to local businesses. MIGA remained focusedon its strategic priorities, with 85 percent of its projects
in fiscal 2022 dedicated to countries affected by FCV,IDA countries, and climate mitigation and adaptation.
Fragility, conflict, and violence are rising in much of
the world, including Afghanistan, Ethiopia, the Sahel,and Yemen. In Ukraine, the war has led to lives, homes,
and livelihoods being lost, millions of refugees, andinfrastructure destroyed. The costs of reconstruction
are already in the hundreds of billions. As of August
2022, we have mobilized and facilitated the transfer
of $13 billion in emergency financing, with more than
$9 billion already disbursed to help Ukraine financecritical government services and lessen the human andeconomic impacts. This includes a $1.5 billion WorldBank package, including $1 billion in exceptional support
from IDA, to help pay wages for government and school
employees. World Bank Group support also extends
to countries that are hosting Ukrainian refugees.
With the increase in energy and food costs and Europe’s
huge unmet demand for natural gas, developing
countries are facing new strains on people andeconomies. The sudden spike in food prices threatens
to worsen political and social tensions in many
developing countries, with devastating impacts on
the poorest and most vulnerable. In parts of Easternand Southern Africa, for example, about 66 million
people are at risk of a food emergency or famine. In
May 2022, we announced support for a global responseto the food security crisis, with up to $30 billion in
financing through August 2023, including $12 billion
in new projects, to cushion the effect of higher prices
and boost agricultural production and supply. The
response builds on our experience from the last foodprice crisis and incorporates our data and analyticalwork, including the Commodity Markets Outlook. And in
July 2022, I joined leaders of the IMF and UN agencies
in calling for urgent action to improve global foodsecurity by providing quick support to the vulnerable,facilitating trade and international food supplies,
boosting production, and investing in climate-resilient
agriculture.
The disruption of energy supplies is lowering growth,
especially for economies that depend on fuel imports.
Higher prices for natural gas and shortages are putting
fertilizer supplies and crop yields at risk, destabilizing
electricity grids, and increasing the use of heavily
polluting fuels. The world urgently needs to increase thesupply of energy and massively expand reliable accessto electricity in poorer countries. This will require major
new investments in cleaner energy, energy efficiency,
and electricity grids and transmission. The fundamental
realignment of Europe’s energy sources away fromdependence on Russia requires major increases inelectricity generation from natural gas, hydropower,
geothermal, and nuclear power to provide a lesscarbon-intensive baseload to maintain and expand
electricity grids.
Climate change and extreme weather are steadily
increasing their pressure on economies and societies,
particularly in fragile settings. The World Bank Group’s
Climate Change Action Plan 2021–25 seeks to integrate
climate and development, identify and develop themost impactful projects to reduce greenhouse gas
emissions and adapt to climate change, increase
direct financing throughout the World Bank Group.
It will provide avenues for the global community toprovide the huge flow of new grant funding needed
for global public goods in poorer countries. Innovative
financial tools, such as green bonds and the Wildlife
Conservation Bond we launched in March 2022 —the first of its kind — will need to expand. The Climate
Change Action Plan has also introduced a new corediagnostic: Country Climate and Development Reports.
As of the end of July 2022, we had published the firstof these reports for Türkiye, Vietnam, and the G5 Sahelregion. I’m also pleased that, with this annual report,
we are introducing much greater transparency in theWorld Bank’s climate disclosures.
A major consequence of the current crises is the hugebuildup in government debt. For many of the poorest
countries, the debt burden is unsustainable or athigh risk. Deep debt reduction will be necessary toallow new investment and growth. We work closelywith the IMF and other partners to help countries
strengthen their transparency, governance, andaccountability — all key steps in debt sustainability.
We also continue to call on official and private sector
creditors to participate quickly and fully in efforts to
reduce debt stocks. Under current creditor-country
policies, expected debt payments by the poorest
countries to their creditors in 2022 and 2023 will
greatly exceed all the development assistance available
to these countries. Our World Development Report 2022
examines policies to mitigate interconnected financial
risks and steer the world toward a sustainable andequitable recovery.
I was pleased to welcome many colleagues back to ouroffices this year. We continue to adapt our work model
to protect staff health and well-being while recognizing
the value of physical interaction in delivering highquality results for clients and career development.
The World Bank Group’s anti-racism task force
continues our important work to fight racism and racial
discrimination within our institution and in countries
where we work. I remain committed to fostering aculture of openness and trust and improving diversity
and inclusion across the organization, also through ourtask force on workplace culture.
The crises affecting our client countries are deepseated, but I am confident we can make a difference.
To meet these challenges, we must draw on theinnovation and dedication of our staff, the strengthof our partnerships, and the resolve of the global
community. The World Bank Group remains committed
to helping countries overcome these challenges andwork toward a more resilient and sustainable future.

David Malpass
President of the World Bank Groupand Chairman of theBoard of Executive Directors

IFC ANNUAL REPORT 2022

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LETTER FROM MAKHTAR DIOPIFC Managing Director

Taken together, these challenges point toward asingular truth: there is no going back to where wewere before. We have entered a new normal, one thatwill require new partnerships and creative mindsets
to pave the way for a more sustainable, resilient, andinclusive future.
What does the new normal demand from IFC? This
topic has weighed heavily on my mind this year. I am
incredibly proud of what our team has accomplishedin the face of unprecedented uncertainty and growing
fragility around the world. Fiscal Year 2022 wasanother record-setting year, with total investmentcommitments of $32.8 billion. These investments
created regional manufacturing hubs that can produce
vaccines and other essential goods, helped commerce
flow in fragile and conflict-affected areas, and kept
climate projects on track amid economic anxiety that
could have derailed them.
When I step back and reflect on the totality of IFC’s
accomplishments, a common thread emerges: IFC’s
ability to defy uncertainty and drive outcomes thatchange lives. Our ability to step up in the mostchallenging circumstances and bring others along.
Our willingness to take risks and seize opportunities.

Stepping up in a time of uncertainty.
The title of our Annual Report reflects our determination to step forward,
with a sense of urgency, when the world needs us most.
In an environment fraught with uncertainties, confronting mounting
challenges with decisiveness and resolve is the only way forward.
Global Challenges
The slow vaccination rates in the developing world and the emergence of new variants prolonged theimpacts of the COVID-19 pandemic. The war in Ukraine unleashed a humanitarian crisis in the region,
triggered a global food crisis, and further disrupted global supply chains. Soaring inflation worsened poverty
and threatened essential investments in emerging markets. More frequent and intense climate events
provided an ominous glimpse at the consequences of a continued disregard for the planet.

6 IFC ANNUAL REPORT 2022

Building Resilience
Countries around the world are carrying the weightof converging crises. They are feeling the pull to turninward, shore up resources, and focus on national
concerns. But strong nations and close global ties are
not and should not be mutually exclusive goals.
To keep trade flowing across borders in turbulent
times, IFC committed record amounts in tradefinancing support to emerging markets, especially
low-income countries.
Another example of what is possible is building
medical supply chains to address the pandemic.
Since March 2020, IFC has invested and mobilized
more than $2.2 billion to help get vaccines, personal
protective equipment, and medical supplies into
emerging markets, with a special focus on regional

facilities and distribution channels in Africa that canserve local populations long after the COVID-19 crisis
subsides.
The potential implications of this approach go far
beyond healthcare. We envision similar opportunities
to build resilient ecosystems in areas like agriculture —and therefore food security — and housing. In fact, weplan to use our Global Health Platform as a model for
addressing food insecurity and targeting assistance tofarmers, food processors, and fertilizer distributors indeveloping countries.
We will also continue to support opportunities thatconnect individuals with training, digital resources,
and capital to launch businesses. These investments
are key to driving the economic engines of emerging
markets and promoting the kinds of innovation thatcan reshape the world.

Multidimensional Development
Consider the energy crisis in the developing world,
where 600 million people in Africa alone still live
without access to electricity. The need to address thisissue is not up for debate. Yet the ever-worsening
impacts of climate change mean we cannot do it in
the same way we always have. We need to find a
new path forward: one that combines advancements
in sustainable technologies, massive investments in
adaptation with innovative trade agreements andfinancing tools. This is the only way we are going tosucceed in powering Africa — while decarbonizing an
industry that is one of the world’s largest contributors
to greenhouse gas emissions — and helping middle
income countries through their energy transition.
This is just one example of multidimensional
development, but there are countless others. We needto both expand capital access for small businesses
and invite in more women and underrepresented
minorities to take part. We need to both build
affordable housing and invest in more sustainablebuilding materials.

It is hard to understate the power of theseopportunities. They have the potential to create true
win-win scenarios that benefit businesses, nations,and the entire global community. But they will also
require sustained effort, new partnerships, and close
collaboration between the public and private sectors
and international development organizations like IFC.

Creating a Stronger IFC
In the new normal, we all have to get comfortabletaking on more challenges, which means taking
more risks and being willing to push the envelope.
We have to want more for the future of the world,
do more to achieve it, and be more like the best
versions of ourselves.
IFC has already taken so many important steps
forward to meet the demands of the moment.
We continue to increase our climate-related
commitments, and we are on track for all direct
investments to be aligned with the Paris Agreement
by 2025. We are also building on our legacy of setting
global standards, launching new green taxonomies forclimate-friendly projects or issuing guidelines for blue
finance to promote the blue economy and save
our oceans.
We continue to build out our capacity for taking
on bold risks in a prudent manner. We know how
important our willingness to push into challenging
markets is, and we remain committed to charting
paths that will encourage others to follow. We
intend to grow our use of blended finance tools to
help rebalance risks for private investors, and we willkeep taking chances on game-changing ideas andinnovations. We know not every investment is goingto pan out, but the potential impact of the ones that
do far outweigh the costs.

ideas into investments that move the needle andcreate new or expand existing markets including infragile countries.
But even with all these initiatives, there is still
more we can and must take on. That is why we areproactively improving how our organization works
around the world. We are implementing changes to
IFC’s organizational structure and decision-making
frameworks that will remove silos, foster greatercollaboration, and streamline decision-making so thatfrontline staff, who know on-the-ground conditions
best, can respond quickly and effectively to clients.
My hope is that these changes will help optimize IFC
for the future. I want us to be an organization thatembraces change and nurtures talent. I want us tohave a culture that is diverse, lively, and inclusive. Put
simply, I want us to be nothing short of the very bestin global development—for our clients, for the people
and communities we serve, and for ourselves.
The new normal is not something we should fear. It
is something that should inspire our work toward abetter, brighter tomorrow.

Makhtar Diop
Managing Director

I am especially excited about the growth of ourUpstream program, which has truly gone mainstream
and become a central part of our operations. Now
we’re shifting our focus to execute on a robust pipelineof commercially viable projects and convert these

IFC ANNUAL REPORT 2022

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IFC FY22: STEPPING UP, DELIVERING RESULTS$32.8 Bin total investment commitments,
as compared to $31.5B in FY21

CLIMATE$4.4 Bin climate
financing forour own account

8 IFC ANNUAL REPORT 2022

TRADE

$9.7 Bin trade finance-OUR HIGHEST
LEVEL EVER

75 %of this amount was invested
in IDA countries and fragile
and conflict-affected
situations