International Development Association

Management’s Discussion & Analysis
andCondensed Quarterly Financial Statements
March 31, 2023
(Unaudited)

International Development Association (IDA)
Management’s Discussion and Analysis
March 31, 2023
Contents
Section I: Executive Summary

Summary of Financial Results

4

Section II: Overview

Twentieth Replenishment of Resources (IDA20)
Financial Business Model
Basis of Reporting

6
6
6

Section III: IDA's Financial Resources

IDA20 Funding
Allocation of IDA20 Resources8
8

Section IV: Financial Results

Financial Results and Portfolio Performance

10

Section V: Risk Management

Risk GovernanceManagement of IDA's Risks

18
18

Section VI: Governance

Senior Management Changes

24

List of Tables, Figures and Boxes

TablesFigures
Box

25
25
25

Management’s Discussion and Analysis

Section I: Executive Summary

This Management’s Discussion & Analysis (MD&A) reflects the results of the International Development
Association’s (IDA) financial performance for the nine months ended March 31, 2023 (FY23 YTD). This document
should be read in conjunction with IDA’s financial statements and MD&A issued for the fiscal year ended June 30,
2022 (FY22). IDA undertakes no obligation to update any forward-looking statements. For information relating to
IDA’s development operations’ results and corporate performance, refer to the World Bank Corporate Scorecard andSustainability Review.

Box 1: Selected Financial Data
In millions of U.S. dollars, except ratios which are in percentages
As of and for the nine months
ended March 31,
2023
Lending Highlights (Section IV)
Loans, Grants and Guarantees
Net commitments a
Gross disbursements a
Net disbursements a
Balance Sheet (Section IV)
Total assets
Net investment portfolio b
Net loans outstanding
Borrowing portfolio c
Total equity
Income Statement (Section IV)
Interest revenue, net of borrowing expenses
Transfers from affiliated organizations and others
Development grants
Net (loss) income
Non-GAAP Measures
Adjusted Net Income (Section IV)
Deployable Strategic Capital Ratio (Section V)$

20,456
17,797

As of and for the fiscal
year ended June 30,

2022

$

12,291

20,152
12,525

2022

$

7,613

37,727
21,214
14,477$

228,52535,086
184,074
36,658184,359$

224,051
42,514
176,449
34,168
181,599$

220,014
39,561
174,490
35,032
178,668

$

1,704
117
(2,813)(2,190)

$

1,412
274
(1,396)
(307)

$

1,901
274
(2,372)
12

$

234
$
24.5 %

200$
29.4 %

260
26.4 %

a. Commitments that have been approved by the Executive Directors (referred to as “the Board” in this document) and are net offull cancellations and terminations approved in the same fiscal year. Commitments and disbursements exclude IDA-IFC-MIGA
Private Sector Window (PSW) activities.
b. For the composition of the net investment portfolio, see Notes to the Condensed Quarterly Financial Statements, Note C –Investments – Table C2.
c. Includes associated derivatives. For the composition of the Borrowing portfolio, see Notes to the Condensed Quarterly Financial
Statements, Note E – Borrowings.

2

IDA Management's Discussion and Analysis: March 31, 2023

Management’s Discussion and Analysis

Section I: Executive Summary

Section I: Executive Summary
IDA, an international organization owned by its 174 member countries, is one of the five institutions of the WorldBank Group (WBG1). Each WBG organization is legally and financially independent from IDA, with separate assets
and liabilities. IDA is not liable for the obligations of the other institutions.
IDA is rated triple-A by the major rating agencies and has been providing financing and knowledge services to manyof the world’s developing countries for 62 years. With its many years of experience and its depth of knowledge ininternational development, IDA plays a key role in achieving the WBG’s goal of helping countries achieve better
development outcomes. IDA contributes to the WBG’s twin goals of ending extreme poverty and promoting sharedprosperity by providing loans, grants, guarantees, and other financial products to the poorest and most vulnerable
countries to help meet their development needs, and by providing technical assistance and policy advice leveraging
its experience and expertise. It also supports countries with disaster risk financing and insurance against natural
disasters and health-related crises and facilitates financing through trust fund partnerships.
IDA and its affiliated organizations seek to help countries in reducing poverty and inequality, achieve improvements
in growth, job creation, governance, the environment, climate adaptation, mitigation and resilience, human capital,
infrastructure and debt transparency, among others. To meet its development goals, the WBG supports client
countries' efforts to implement programs to improve growth and development outcomes. Further, new and ongoingchallenges continue to influence the global outlook. These include high inflation, the rise in food insecurity, growing
inequality, global fragility, pandemic risk, Russia's invasion of Ukraine and other geopolitical events, rising debt,
climate change, and macroeconomic imbalances. In response, IDA, as part of the WBG efforts, continues to workwith partners at global and country levels to support its borrowing countries in addressing the impact of these
multiple crises, to enhance resilience, and lay the groundwork for rebuilding better. To further enhance these efforts,
the Board and Management have been discussing an Evolution Roadmap for the WBG to better address the scale ofdevelopment challenges by adapting the WBG's vision and mission, strengthening its operating model, andenhancing its financial capacity and model.

1

The other WBG institutions are the International Bank for Reconstruction and Development (IBRD), the International FinanceCorporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Centre for Settlement of Investment
Disputes (ICSID). The World Bank consists of IBRD and IDA.

IDA Management's Discussion and Analysis: March 31, 2023

3

Management’s Discussion and Analysis

Section I: Executive Summary

Summary of Financial Results
Net Loss and Adjusted Net Income
Net Loss: IDA reported a net loss of $2,190 million
in FY23 YTD, compared to a net loss of $307 million
for the nine months ended March 31, 2022 (FY22
YTD). The increase in net loss was primarily driven
by the increase in development grant expenses. See
Section IV: Financial Results.
Adjusted Net Income: IDA's adjusted net income
was $234 million in FY23 YTD, compared to $200
million in FY22 YTD. The increase was primarily
due to higher net interest revenue on investments andloans, partially offset by higher borrowing expenses
and provision for losses on loans and otherexposures. See Section IV: Financial Results.

In millions of U.S. dollars

YTD Adjusted Net Income (Loss)YTD Net Income (Loss)
4,000
2,000
0
(2,000)(4,000)
FY19

FY20

FY21

FY22

FY23

Lending Operations
IDA's net commitments in FY23 YTD were $20.5 billion, $0.3 billion higher than FY22 YTD, primarily due to theincrease in Development Policy Financing (DPF) and Program-for-Results (PforR) commitments, partially offset bylower Investment Project Financing (IPF) commitments. Out of the total net commitments, $15.6 billion were loan
commitments and $4.8 billion were grant commitments. FY23 YTD net loan commitments included $1.2 billion
approved under the IDA19 envelope due to the extension of the closing date for the approval of IDA19 operations.
IDA’s net loans outstanding increased by $9.6 billion to $184.1 billion as of March 31, 2023, from $174.5 billion asof June 30, 2022, primarily due to net loan disbursements and currency translation gains during the period. See
Section IV: Financial Results.
Development grant expenses were $2.8 billion in FY23 YTD compared to $1.4 billion in FY22 YTD due to theincrease in IPF grants in FY23 YTD.
In billions of U.S. dollars

YTD Net Commitments ᵃ
YTD Gross Disbursements
YTD Net Disbursements
25
20
15
10
5
0

Net Loans outstanding

YTD Net Grant Commitments
YTD Grant ExpenseYTD Net Grant Disbursements

200
160
120
80
40
0

FY19 FY20 FY21 FY22 FY23

Jun 19 Jun 20 Jun 21 Jun 22 Mar 23

25
20
15
10
5
0
FY19 FY20 FY21 FY22 FY23

a. Includes loans, grants and guarantees.

Net Investment Portfolio
As of March 31, 2023, the net investment portfolio
was $35.1 billion, compared with $39.6 billion as ofJune 30, 2022. The decrease was due to net cash
outflows from loan and grant disbursements. See
Section IV: Financial Results. The primary objectiveof IDA's investment strategy is principal protection.
As of March 31, 2023, 71% of IDA's investment
portfolio was held in instruments rated AA or above(see Table 15).

4

In billions of U.S. dollars
Net Investment Portfolio

50
40
30
20
10
0
Jun 19

IDA Management's Discussion and Analysis: March 31, 2023

Jun 20Jun 21

Jun 22

Mar 23

Management’s Discussion and Analysis

Section I: Executive Summary

Borrowing Portfolio
Market borrowings at fair value: As of March 31,
2023, the market borrowings carried at fair value andthe related derivatives were $20.7 billion, a decreaseof $1.2 billion from June 30, 2022 primarily due to
net maturities during the period.
Market borrowings at amortized cost: As of
March 31, 2023, the market borrowings carried atamortized cost were $8.6 billion, an increase of $2.4
billion from June 30, 2022 primarily due to newissuances during the period.

In billions of U.S. dollars
Borrowing Portfolio

50
40
30
20
10
0
Jun 19Jun 20Jun 21

Jun 22

Mar 23

Jun 22

Mar 23

Concessional Partner Loans at amortized cost: Asof March 31, 2023, total borrowings from members Concessional Partner Loans (CPL) were $7.3 billion,
a marginal increase from June 30, 2022.
See Section IV: Financial Results.

Equity and Capital Adequacy
As of March 31, 2023, IDA's equity was $184.4
billion, an increase of $5.7 billion from June 30,
2022. The increase was primarily due to the increasein subscriptions and contributions paid in. See
Section IV: Financial Results.

In billions of U.S. dollars
Equity

200
150
100
50
0
Jun 19The Deployable Strategic Capital (DSC) ratio, IDA's
main capital adequacy measure, was 24.5% as ofMarch 31, 2023, above the zero percent policy
minimum and a decrease of 1.9 percentage points
from 26.4% as of June 30, 2022. The decrease wasmainly due to the increase in total resources required.
IDA’s capital continues to be adequate to support its
operations. See Section V: Risk Management.

Jun 20Jun 21

Ratio in percentages
Deployable Strategic Capital Ratio

45%
30%
15%
0%
Jun 19Jun 20Jun 21

Jun 22

Mar 23

Policy Minimum Ratio = 0%

IDA Management's Discussion and Analysis: March 31, 2023

5

Management’s Discussion and Analysis

Section II: Overview

Section II: Overview
Generally, every three years, representatives of IDA’s members2 meet to assess IDA’s financial capacity and the
medium-term demand for new IDA financing. Members decide on the policy framework, agree on the amount offinancing to be made available for the replenishment period, and commit to additional contributions of equity thatare required to meet these goals. The meetings culminate in a replenishment agreement that determines the size,
sources (both internal and external), and uses of funds for the replenishment period.

Twentieth Replenishment of Resources (IDA20)
IDA’s Twentieth Replenishment (IDA20) commenced on July 1, 2022, with a financing envelope of $93.0 billion3,
including $11 billion of IDA19 carry over, supported by $23.5 billion of member contributions over the three-year
replenishment period, FY23-FY25. IDA20 recognizes the need to help address the profound challenges faced by
IDA countries. IDA20 reaffirms the international community’s commitment to scale up support to enable IDA
countries to respond to the effects of the coronavirus disease (COVID-19) pandemic crisis, recoup their development
losses, and resume progress toward the 2030 Sustainable Development goals. IDA20 supports the world’s poorestand most vulnerable countries to emerge on a development path in line with the Green, Resilient and Inclusive
Development (GRID) framework. IDA20 builds on the IDA19 special themes, with the continuation of climatechange, fragility, conflict, and violence (FCV), gender and development, jobs and economic transformation and theintroduction of human capital as a special theme. In addition, IDA20’s policy package incorporates four crosscutting
issues: crisis preparedness (introduced in IDA20), governance and institutions, debt (including transparency), andtechnology.
IDA20 became effective in December 2022. See Notes to the Financial Statements for the year ended June 30, 2022,
Note A – Summary of Significant Accounting and Related Policies, Members’ Subscriptions and Contributions.

Financial Business Model
IDA has financed its operations over the years with its own equity, including regular additions to equity provided bymember countries as part of the replenishment process. As a result of the strong support from member countries,
IDA has built up a substantial equity base of $184.4 billion as of March 31, 2023. Since FY18, IDA has shifted to a
hybrid financial model by introducing market debt into its business model. By prudently leveraging its equity andblending market debt with equity contributions from members, IDA has increased its financial efficiency, and scaled
up its financing to support the escalating demand for its resources to deliver on the following priorities:• Provide concessional financing on terms that respond to clients’ needs; and• Ensure long-term financial sustainability of IDA’s financial model through a prudent risk management
framework.
Currently, IDA's non-concessional and concessional lending, including grants, is primarily financed by IDA’sequity. As IDA’s funding program expands under the hybrid financing model, a larger portion of lending will befunded by market debt, together with member countries’ contributions (equity). Funds not deployed for lending are
maintained in IDA’s investment portfolio to supply liquidity for its operations.

Basis of Reporting
IDA prepares its financial statements in conformity with accounting principles generally accepted in the UnitedStates of America (U.S. GAAP). IDA’s reporting currency is the U.S. dollar. IDA’s functional currencies are theSDR and its component currencies of the U.S. dollar, euro, Japanese yen, pound sterling and Chinese renminbi.
Management uses net income as the basis for deriving adjusted net income, as discussed in Section IV: Financial
Results.

2

3

6

IDA’s members are owners and hold voting rights in IDA. Members do not, however, hold shares in IDA and are therefore notreferred to as shareholders. Payments for subscriptions and contributions from members increase IDA’s paid-in equity and arefinancially equivalent to paid-in capital in multilateral development organizations that issue shares.
U.S. dollar amounts are based on IDA20 reference rate of USD/SDR 1.42934. The U.S. dollar amounts are provided for reporting
purposed only, as IDA’s balance sheet is predominantly managed in Special Drawing Rights (SDR).

IDA Management's Discussion and Analysis: March 31, 2023

Management’s Discussion and Analysis

Section II: Overview

Adjusted Net Income
Adjusted Net Income (ANI), a non-GAAP measure, reflects the economic results of IDA’s operations and is used by
IDA’s management and the Board as a financial sustainability measure. ANI is defined as IDA’s net income,adjusted to exclude certain items. After the effects of these adjustments, the resulting ANI generally reflects amounts
which are realized, not restricted for specific uses, and not directly funded by members. For a detailed discussion of
the adjustments, see IDA’s MD&A for the fiscal year ended June 30, 2022, Section IV: Financial Results.

IDA Management's Discussion and Analysis: March 31, 2023

7

Management’s Discussion and Analysis

Section III: IDA's Financial Resources

Section III: IDA’s Financial Resources
IDA20 Funding
IDA’s financing resource envelope available for lending and grant commitments is based on the long-term outlookof IDA’s financial sustainability. This takes into account the amount of member contributions and theconcessionality of the proposed financing to borrowers, market conditions, and capital adequacy requirements.

Allocation of IDA20 Resources
IDA financing is provided in the form of loans, grants, and guarantees. Most of IDA’s resources are allocated toeligible members through IDA Country Allocations that provide unearmarked support. The allocation framework is
agreed for each replenishment cycle. IDA Country Allocations are determined using the Performance Based
Allocation (PBA) system, which takes into account the country’s performance rating (CPR), population size and per
capita income, and complemented by the FCV envelope. The rest of IDA resources are provided through five IDA
Windows dedicated to addressing specific development priorities, and an Arrears Clearance framework that provides
exceptional support for countries to fully reengage with the World Bank.
IDA responds to specific needs of its members through the following five IDA Windows:

Eligibility and the percentage of allocation of grants for IDA-only countries are based on an assessment of thecountry’s risk of debt distress, where countries, including IDA-only Small States, with high risk of debt distress, orin debt distress, receive their IDA assistance in grants. IDA-only Small States at moderate risk of debt distresscontinue to receive half of their IDA20 allocation in grants and half in loans. Gap and Blend countries are only
eligible for grant financing through the Window for Host Communities and Refugees, if applicable. As part of
IDA’s balance sheet optimization measures, two new financing terms have been introduced in IDA20, both of whichcarry no interest or service charges: 1) Concessional Shorter-Maturity Loans (SMLs) are offered through the ScaleUp Window (SUW) and through country allocations based on the PBA system. These loans are offered to IDA-only
countries, including IDA-only Small States, at moderate or low risk of debt distress and to gap and blend countries;2) Additionally, 50-year loans are available for IDA-only countries at moderate risk of debt distress in lieu of theprevious financing terms of half grants and half loans, with an exception for Small States.

8

IDA Management's Discussion and Analysis: March 31, 2023

Management’s Discussion and Analysis

Section III: IDA's Financial Resources

Table 1: Cumulative Net Commitments since July 1, 2022
In millions of U.S. dollars
As of March 31, 2023
Concessional financing
IDA Country Allocations
IDA Concessional Windows
Regional Window
Window for Host Communities and Refugees
Crisis Response Window
Scale-up Window – Shorter Maturity Loans
Non-concessional financing – Scale-up Window
Cumulative Net Commitments under IDA20
IDA19 Commitments approved in July 2022
IDA Country Allocations
Total Cumulative Net Commitments a

Loans andGuarantees

GrantsTotal$

9,613 $

3,612 $

13,225

$

353
32
417
2,011
1,994
14,420 $

411
53
760
—
—
4,836 $

764
85
1,177
2,011
1,994
19,256$$

1,200 $
15,620 $— $4,836 $

1,200
20,456a. Commitments are net of full cancellations and terminations approved in the same fiscal year. Commitments exclude IDA-IFCMIGA Private Sector Window (PSW) activities.

Private Sector Window
The IDA-IFC-MIGA Private Sector Window was created under IDA18 to mobilize private sector investment in
IDA-only countries and IDA-eligible Fragile and Conflict-affected Situations. Under IDA20, $2.5 billion has been
allocated to PSW, bringing the cumulative total allocation to $5.5 billion.
As of March 31, 2023, $1.2 billion had been utilized out of the total $3.2 billion committed in IDA18 through
IDA20. See Notes to the Condensed Quarterly Financial Statements for the period ended March 31, 2023, Note G –Transactions with Affiliated Organizations – Table G4.
Table 2: Utilization of PSW Commitments
In millions of U.S. dollars
IDA18 and
IDA19
IDA20
$
2,950 $
2,500
2,947
206

As of March 31, 2023
Allocation
Net Commitments
Of which utilized
Guarantees
Derivatives$

Funding of IFC's PSW-related debt and equity
investments
Loans
Total utilization of IDA PSW

Total$ 5,450
3,153

Utilization measure

768
243

Face value of outstanding guarantees
Notional amount74

Initial value of investment75$ 1,160

Amortized cost

IDA Management's Discussion and Analysis: March 31, 2023

9

Management’s Discussion and Analysis

Section IV: Financial Results

Section IV: Financial Results
Financial Results and Portfolio Performance
Net Loss
IDA had a net loss of $2,190 million in FY23 YTD compared with a net loss of $307 million in FY22 YTD (SeeTable 3). The increase in net loss was primarily driven by an increase of $1.4 billion in development grant expenses
due to the increase in IPF grants in FY23 YTD.

Adjusted Net Income
IDA’s adjusted net income was $234 million in FY23 YTD compared with $200 million in FY22 YTD (See Table3). The increase was primarily driven by:• An increase of $599 million in net interest revenue on investments as a result of higher interest rates in
FY23 YTD;• An increase of $185 million in net interest revenue from loans due to the higher average balance and theincrease in interest rates on non-concessional loans in FY23 YTD; partially offset by

10•

An increase of $505 million in borrowing expenses, excluding amortization of discount on CPL, as a resultof the increase in interest rates and the higher average balances; and•An increase of $183 million in the provision for losses on loans and other exposures, excluding theprovision for Heavily Indebted Poor Countries (HIPC)/Multilateral Debt Relief Initiative (MDRI) and grant
advances, mainly due to the increase in exposure.

IDA Management's Discussion and Analysis: March 31, 2023

Management’s Discussion and Analysis

Section IV: Financial Results

Table 3: Condensed Statements of Income
In millions of U.S. dollars
For the nine months ended March 31,
Interest Revenue
Loans, net
Investments, net
Asset-liability management derivatives, net
Borrowing expenses, net
Interest revenue, net of borrowing expenses
Provision for losses on loans and other exposures
Other revenue (expenses), net (Table 12)
Net non-interest expenses (Table 11)
Transfers from affiliated organizations and others
Non-functional currency translation adjustment gains, net
Unrealized mark-to-market losses on investments-trading portfolio, net a
Unrealized mark-to-market gains on non-trading portfolios, net
Development grants
Net Loss
Adjustments to reconcile net (loss) income to adjusted net income:
Activities directly funded by member contributions
Contributions from affiliated organizations and others
Non-functional currency translation adjustment gains, net
Unrealized mark-to-market gains on non-trading portfolios, net b
Pension and other adjustments
Adjusted Net Income

2023

Negative
impact2022

Positive
impact182
1,643 $ 1,461
599
705
106
11
11
—
(500)
(655)
(155)
292
$ 1,704 $ 1,412
(169)
(379)
(210)
49
35
(14)
(1,077)(1,028)
(49)
117
274
(157)
94
223
(129)
(18)
(6)
(12)
147
438
(291)
(2,813)(1,396)(1,417)$ (2,190) $ (307) (1,883)$$$

2,863 $ 1,507
(117)
(274)
(94)
(223)
(66)
(420)
(162)
(83)
234 $
200

1,356
157
129
354
(79)
34

a. Includes IDA’s share of returns from Post-Employment Benefit Plan (PEBP) and Post-Retirement Contribution Reserve Fund(PCRF) assets – $69 million positive return (FY22 YTD – $24 million of positive return).
b. Excludes $81 million of gains from revenue-related forward currency contracts (FY22 YTD – $18 million of gains).
Table 4: Condensed Balance Sheets
In millions of U.S. dollars
As ofAssetsDue from banks

March 31, 2023 June 30, 2022$

813 $36,55739,827Net loans outstanding a

184,074

174,490

264

404

6,817

4,607

$

228,525 $

220,014$34,046 $
1,125
8,995
184,359
228,525 $32,899579
7,868
178,668
220,014

Other assets
Total assets
Liabilities
Borrowings
Derivative liabilities, net
Other liabilities
EquityTotal liabilities and equity

$

127

686

Investments
Derivative assets, net

Decrease Increase(3,270)
9,584
(140)
2,210
8,511
1,147
546
1,127
5,691
8,511

a. The fair value of net loans outstanding was $141,159 million as of March 31, 2023 ($141,193 million - June 30, 2022).

The main drivers for the movements in the Balance Sheets as of March 31, 2023 are as follows:• A decrease in investments due to funding for loan disbursements during the period;• An increase in net loans outstanding due to net loan disbursements during the period;• An increase in other assets due to higher grant advances;• An increase in borrowings due to net new issuances during the period;• A decrease in derivative assets and an increase in derivative liabilities primarily due to mark-to-market
losses on asset-liability management derivatives as a result of the increased interest rates.

IDA Management's Discussion and Analysis: March 31, 2023

11

Management’s Discussion and Analysis

Section IV: Financial Results

EquitySee Table 5 below for the change in IDA’s equity during FY23 YTD.
Table 5: Changes in Equity
In millions of U.S. dollars
Equity as of June 30, 2022
Changes during the period:
Subscriptions and contributions paid-in
Nonnegotiable, noninterest-bearing demand obligations
Change in Accumulated deficit
Change in Accumulated other comprehensive loss
Deferred amounts to maintain value of currency holdings
Total change
Equity as of March 31, 2023$

178,668$$

8,347(2,484)(2,190)
2,019
(1)
5,691
184,359

Results from Lending Activities
Loan Portfolio and Grant Activity
As of March 31, 2023, the net loans outstanding were $184.1 billion, $9.6 billion higher compared with June 30,
2022. The increase was mainly due to net disbursements of $7.2 billion during the period and currency translation
gains of $2.6 billion, consistent with the 1.3% appreciation of the SDR against the U.S. dollar during the period.
As of March 31, 2023, 85% of IDA’s loans outstanding were denominated in SDR. For the regional presentation ofloans outstanding, see Notes to the Condensed Quarterly Financial Statements for the period ended March 31, 2023,
Note D – Loans and Other Exposures – Table D5.
Figure 1: Net Loans Outstanding

Table 6: Net Loans Outstanding activity
In millions of U.S. dollars
Net Loans outstanding as of June 30, 2022$
Changes during the period due to:Gross disbursements
Principal repayments and prepayments
Change in accumulated provision for loan losses a
Translation adjustments
Other b
Total change$
Net Loans outstanding as of March 31, 2023$

In billions of U.S. dollars
174,490200
12,732(5,506)
(181)
2,563
(24)
9,584
184,074

177.8

174.5

Jun 21

Jun 22

184.1

150
100
50
0

a. See Notes to the Condensed Quarterly Financial Statements, Note
D – Loans and Other Exposures.

Mar 23b. Represents deferred loan income of $2 million and $22 million HIPC
debt relief and other.

During FY23 YTD, net loan commitments were higher by $2.9 billion compared with FY22 YTD. There were no
guarantee commitments in either FY23 YTD or FY22 YTD. Higher net loan commitments were mainly driven byhigher DPF and PforR commitments.

12

IDA Management's Discussion and Analysis: March 31, 2023

Section IV: Financial Results

Management’s Discussion and Analysis

Table 7: Net Commitments of Loans and Guarantees by Region
In millions of U.S. dollars
For the nine months ended March 31,
Eastern and Southern Africa
Western and Central Africa
East Asia and Pacific
Europe and Central Asia
Latin America and the Caribbean
Middle East and North Africa
South Asia
Total

$

$

2023

% of total

6,298
5,395
345
650
51
15
2,866
15,620

40 %
35
2
4
*
*
19
100 %

2023
3,088
967
—
200
50
527
4
4,836

% of total
64 %
20
—
4
1
11
*
100 %

$

$

2022

% of total

3,588
6,013
230
507
44
145
2,231
12,758

28 %
47
2
4
*
1
18
100 %

2022
3,874
2,310
228
210
297
475
—
7,394

% of total
52 %
31
3
3
4
7
—
100 %

Variance
$

2,710
(618)
115
143
7
(130)
635
2,862

$

* Indicates percentage less than 0.5%.
Table 8: Net Commitments of Grants by Region
In millions of U.S. dollars
For the nine months ended March 31,
Eastern and Southern Africa
Western and Central Africa
East Asia and Pacific
Europe and Central Asia
Latin America and the Caribbean
Middle East and North Africa
South Asia
Total

$

$

$

$

Variance(786)(1,343)
(228)
(10)
(247)
52
4
(2,558)$$* Indicates percentage less than 0.5%.

IDA’s loans generally disburse within five to ten years for Investment Project Financing (IPF) and one to three years
for Development Policy Financing (DPF). Therefore, each year’s disbursements also include amounts relating tocommitments made in earlier years (See Table 9).
Gross disbursements were 42% higher in FY23 YTD compared with the same period in FY22. IPF, PforR and DPF
disbursements all contributed to this increase.
Table 9: Gross Disbursements of Loans and Grants by Region
In millions of U.S. dollars
2023
Loans aFor the nine months ended March 31,
Eastern and Southern Africa
Western and Central Africa
East Asia and Pacific
Europe and Central Asia
Latin America and the Caribbean
Middle East and North Africa
South Asia
Total

$

3,618 $
4,057
799
1,712
162
27
2,331
$ 12,706 $Grants b

2022
Loans aTotal

2,840 $
6,458
1,316
5,373
116
915
195
1,907
56
218
459
486
109
2,440
5,091 $ 17,797$$

2,290 $
2,712
1,139
505
248
55
2,229
9,178 $

Grants b

Total

1,427 $
3,717
1,075
3,787
88
1,227
94
599
132
380
310
365
221
2,450
3,347 $ 12,525

Variance
$

$

2,741
1,586
(312)
1,308
(162)
121
(10)
5,272

a. Excludes PSW related disbursements - $26 million (FY22 YTD - $20 million).
b. Excludes Project Preparation Advances (PPA).

As of March 31, 2023, 57% of loans outstanding were on regular terms (75 basis points SDR equivalent service
charge). See Table 10. For a summary of financial terms for IDA’s lending products, refer to IDA’s MD&A for the
fiscal year ended June 30, 2022, Section V: Development Activities, Products and Programs.
The increase in IDA’s revenue on loans in FY23 YTD compared to FY22 YTD was primarily due to the higher
average balances of loans outstanding and the increase in interest rates on non-concessional loans.

IDA Management's Discussion and Analysis: March 31, 2023

13

Section IV: Financial Results

Management’s Discussion and Analysis

Table 10: Revenue and Loan Balances by Product Category
Interest revenue on loans a

In millions of U.S. dollars

For the nine months ended
March 31,

Balance as of March 31,
2023
2022

Category
Loans
Concessional
Regular
Blend
Hard b
SML
50-yearNon-concessional c
Others d
Total

$

$

107,208
68,824
1,301
1,465
465
8,567
75
187,9052023$ 107,491
65,272
1,377
—
—
5,986
29
$ 180,155

$

$

601
792
32
—
—
211
4
1,640

2022

$

$

625
721
36
—
—
80
1
1,463

a. Excludes interest rate swap income or expense from loan related derivatives - $3 million of income in FY23 YTD ($2 million of
expense in FY22 YTD).
b. Effective FY18, Hard-term loans are no longer offered.
c. In addition, $21 million of commitment charges were earned in FY23 YTD on undisbursed balances of non-concessional loans($18 million in FY22 YTD).
d. Represents loans under the PSW.

Provision for losses on loans and other exposures
In FY23 YTD, IDA recorded a $379 million provision for losses on loans and other exposures compared to $210
million in FY22 YTD. The increase in provision was primarily due to higher exposure in FY23 YTD compared to
FY22 YTD. Provision for losses on loans and other exposures in FY23 YTD also included $11 million release ofprovision for debt relief under HIPC/MDRI and $4 million release of provision for grant advances ($1 million
release of provision for debt relief under HIPC/MDRI for FY22 YTD). For adjusted net income purposes, theprovision for losses on loans and other exposures excludes the provision for debt relief under HIPC / MDRI and theprovision for grant advances as these are funded by contributions from members.

Results from Investing Activities
Investment Portfolio
IDA’s net investment portfolio decreased to $35.1 billion as of March 31, 2023, from $39.6 billion as of June 30,
2022. The decrease was primarily due to net cash outflows from net loan and grant disbursements. See Notes to theCondensed Quarterly Financial Statements for the period ended March 31, 2023, Note C – Investments.
Investment interest revenue, net of derivatives
During FY23 YTD, IDA’s net investment interest revenue was $705 million, an increase of $599 million comparedwith the same period in FY22. The increase in interest revenue was mainly driven by the higher interest rates in
FY23 YTD compared to FY22 YTD.
Figure 2: Net Investment Portfolio

Figure 3: Net Investment Revenue - YTD

In billions of U.S. dollars

In millions of U.S. dollars

50
40

37.9

39.6

800
35.1

30

400

20

200

10
0

0
Jun 21

14600

Jun 22

Mar 23

FY19

IDA Management's Discussion and Analysis: March 31, 2023

FY20

FY21

FY22

FY23

Section IV: Financial Results

Management’s Discussion and Analysis

Unrealized mark-to-market gains (losses) on investments-trading portfolio, net
During FY23 YTD, IDA's investments-trading portfolio, excluding the returns from PEBP and PCRF, had
unrealized mark-to-market losses of $87 million, compared to $30 million of unrealized mark-to-market losses in
FY22 YTD. The increase in losses was primarily driven by the increase in EUR denominated bond yields.

Results from Borrowing Activities
As of March 31, 2023, the fair value of the market borrowing portfolio was $20.7 billion, a decrease of $1.2 billion
compared to June 30, 2022 ($21.9 billion). The decrease was mainly due to the net maturities during the period.
As of March 31, 2023, the market borrowings recorded at amortized cost were $8.6 billion, an increase of $2.4
billion from June 30, 2022 ($6.2 billion). The increase was due to issuances of new long-term fixed rate market debt
during the period.
Concessional partner loans from members recorded at amortized cost were $7.3 billion as of March 31, 2023, a
marginal increase from June 30, 2022 ($7.0 billion).
See Notes to the Condensed Quarterly Financial Statements for the period ended March 31, 2023, Note E –Borrowings.
Figure 4: Borrowing Portfolio
In billions of U.S. dollars
Market borrowings, at fair valueMarket borrowings, at amortized cost
Concessional partner loans, at amortized cost

40
7.3

7.7

7.0
6.2

20.6

21.9

20.7

Jun 21

Jun 22

Mar 23

30
20
10

8.6

0

Transfers from Affiliated Organizations
Since 1964, IBRD has made transfers to IDA out of its net income upon approval by the Board of Governors. Undera formula-based approach for IBRD's income support to IDA, the amount of income transfer recommended for IDA
is a function of IBRD's financial results. On October 14, 2022, IBRD’s Board of Governors approved a transfer from
FY22 allocable income of $117 million to IDA which was received by IDA on October 20, 2022.

Net Non-Interest Expenses
As shown in Table 11, IDA’s net non-interest expenses are primarily comprised of administrative expenses, net ofrevenue from externally funded activities. IBRD and IDA's administrative budget is a single resource envelope thatfunds the combined work programs of both entities. The allocation of administrative expenses between IBRD and
IDA is based on an agreed cost and revenue sharing methodology, approved by their Boards. The allocation is
primarily driven by the relative level of activities relating to lending, knowledge services and other services between
the two institutions. The administrative expenses shown in the table below include costs related to IDA-executed
trust funds and other externally funded activities.
The increase in net non-interest expenses from FY22 YTD to FY23 YTD, on both a U.S. GAAP basis and on an
adjusted net income basis, was primarily driven by higher staff costs and higher travel expenses (See Table 11).
Travel expenses have been increasing since the easing of the COVID-19 related travel restrictions and officeclosures and are now approximately 80% of the pre-COVID levels for the World Bank.

IDA Management's Discussion and Analysis: March 31, 2023

15

Management’s Discussion and Analysis

Section IV: Financial Results

Table 11: Net Non-Interest Expense
In millions of U.S. dollars
For the nine months ended March 31,

2023

2022

927 $
107
351
122
69
104
25
1,705 $

883 $
31
345
146
60
105
23
1,593 $

44
76
6
(24)
9
(1)
2
112

20

17

3

$
$

(447)
(201)
(648) $
1,077 $

(405)
(177)
(582) $
1,028 $

(42)
(24)
(66)
49

Adjustments to arrive at Net non-interest expenses - Adjusted Net Income basis
Pension, RAMP and EFO adjustments b
Net non-interest expenses - Adjusted Net Income basis$

93
1,170 $

59
1,087 $

34
83

Administrative expenses:
Staff costs
TravelConsultant and contractual services
Pension and other post-retirement benefits
Communications and technology
Premises and equipment
Other expenses
Total administrative expenses$$

Contributions to special programs a
Revenue from externally funded activities:
Reimbursable revenue - IDA executed trust funds
Other revenue
Total revenue from externally funded activities
Total Net Non-Interest Expenses (Table 3) - GAAP basis

Variancea. Included in Non-interest expenses – Other in the Condensed Statements of Income.
b. Adjustments are included in the Pension and other adjustments line in Table 3. The Reserve Advisory and Management
Partnership (RAMP) adjustment was effective from June 30, 2022 and applied prospectively.

During FY23 YTD, IDA’s net other revenue was $35 million compared to $14 million net other expenses in FY22
YTD. The change was due to lower PPA grant expenses, net of cancellations and refinancing of PPA grants
previously approved. Refinanced PPA grants are included in the loan provided to the borrower, and correspondingly,
prior grant expenses are reversed.
Table 12: Other Revenue (Expenses), net
In millions of U.S. dollars
For the nine months ended March 31,
PPA grants and others a
Guarantee fees and others b
Commitment charges
Other Revenue (Expenses), net (Table 3)

2023
$

$

(8) $
22
21
35 $

2022
(49) $
17
18(14) $

Variance41
5
3
49

a. Included in Non-interest expenses – Other in the Condensed Statements of Income.
b. Included in Non-interest revenue – Other in the Condensed Statements of Income.

Unrealized mark-to-market gains (losses) on non-trading portfolios, net
During FY23 YTD, the non-trading portfolios had $147 million of net unrealized mark-to-market gains ($438
million of net unrealized mark-to-market gains in FY22 YTD). The decrease was mainly driven by lower unrealized
mark-to-market gains from the derivatives held for the Capital Value Protection Program (CVP), managed as part ofAsset -Liability management (ALM), as a result of a lower increase in U.S. dollar and EUR interest rates for longtenors in FY23 YTD compared to FY22 YTD. (Section V: Risk Management).

16

IDA Management's Discussion and Analysis: March 31, 2023

Management’s Discussion and Analysis

Section IV: Financial Results

Table 13: Unrealized Mark-to-Market gains (losses) on non-trading portfolios, net
In millions of U.S. dollars
For the nine months ended March 31,
Asset-liability management
Investment portfolio
Other a
Total

$

$

2023

2022

183 $
(4)
(32)
147 $

420 $
(19)
37
438 $

Variance
(237)
15
(69)
(291)

a. Other comprises mark-to-market gains (losses) on borrowings, loan related derivatives and on PSW associated instruments.

Non-functional currency translation adjustment gains (losses), net
Non-functional currency translation adjustment gains or losses represent unrealized exchange rate gains or losses
resulting from the hedging of exchange rate risk related to future donor contributions, borrowings, and all otherassets and liabilities held on IDA’s Balance Sheets, that are denominated in currencies other than the SDR and its
component currencies. The translation adjustment gains in FY23 YTD and FY22 YTD were primarily driven by thehedging of exchange rate risk related to future donor contributions. Certain members pledge their future equity
contributions in non-SDR currencies. These future cash flows are economically hedged using currency forwards.
The economic offset is inherent in the future contribution inflows. The payable portion of the currency forward
contracts are denominated in non-functional currencies. The depreciation or appreciation of these currencies against
the U.S. dollar results in exchange rate gains or losses which are recorded in the income statements. Accordingly,
the translation adjustment gains on non-functional currencies were $94 million in FY23 YTD, compared totranslation adjustment gains of $223 million in FY22 YTD. The decrease in translation gains in FY23 YTD wasprimarily driven by less depreciation of certain non-functional currencies against the U.S. dollar when compared to
FY22 YTD.

IDA Management's Discussion and Analysis: March 31, 2023

17

Management’s Discussion and Analysis

Section V: Risk Management

Section V: Risk Management
Risk Governance
IDA’s risk management processes and practices continually evolve to reflect changes in activities in response tomarket, credit, product, operational, and other developments. The Board, particularly the Audit Committee,
periodically reviews trends in IDA’s risk profiles and performance, and any major developments in risk management
policies and controls.
Management believes that effective risk management is critical for IDA’s overall operations. Accordingly, the risk
management governance structure is designed to manage the principal risks IDA assumes in its activities.

Risk Oversight and Coverage
The Vice President and WBG Chief Risk Officer (CRO) oversees both financial and operational risks. These risks
include (i) country credit risks in the core sovereign lending business, (ii) market and counterparty risks including
liquidity risk, and (iii) operational risks relating to people, processes, and systems, or from external events.
The risk of IDA’s operations not meeting the expected development outcomes (development outcome risks) in
IDA’s lending activities is monitored at the corporate level by Operations Policy and Country Services (OPCS).
Where fraud and corruption risks may impact IDA-financed projects, OPCS, the Regions and Practice Groups, andthe Integrity Vice Presidency jointly address such issues.
For a detailed discussion of the risk governance and risk oversight and coverage, see IDA's MD&A for the fiscal
year ended June 30, 2022, Section IX: Risk Management.

Management of IDA’s Risks
IDA assumes financial risks in order to achieve its development and strategic objectives. IDA’s financial risk
management framework is designed to enable and support the institution in achieving its goals in a financiallysustainable manner. IDA manages credit, market, and operational risks in its financial activities, which includelending, borrowing, and investing. The primary financial risk to IDA is the country credit risk inherent in its loan
and guarantee portfolio. IDA is also exposed to risks in its liquid asset and derivative portfolios, where the majorrisks are interest rate, exchange rate, commercial counterparty, and liquidity risks. IDA’s operational risk
management framework is based on a structured and uniform approach to identify, assess, and monitor key
operational risks across business units.

Geopolitical events and Global Outlook
In response to geopolitical events and other ongoing challenges to the global outlook, including high inflation, therise in food insecurity, growing inequality, global fragility, pandemic risk, Russia's invasion of Ukraine, rising debt,
climate change and macroeconomic imbalances, IDA continues to support its client needs in a financiallysustainable manner.
As of March 31, 2023, IDA had sufficient resources to meet its liquidity requirements and continues to have accessto capital market resources. IDA continues to maintain a robust liquidity position and flexibility to access thenecessary liquidity resources. Management remains vigilant in assessing funding needs in the medium and longerterm to manage the effect of possible severe market movements.
IDA’s capital remains adequate and above the zero percent policy minimum as indicated by the DSC ratio (Table
14).
As of the reporting date, country credit risk and counterparty credit risk remain in line with the existing governanceframework and established credit limits. The loan loss provisions include IDA’s current assessment of country credit
risk. The fair values of related financial instruments reflect counterparty credit risk in IDA’s portfolios.
Developments in the market continue to be closely monitored and managed.
IDA continues to monitor associated risks and mitigates its exposures and risks in line with the risk governanceframework.

18

IDA Management's Discussion and Analysis: March 31, 2023

Management’s Discussion and Analysis

Section V: Risk Management

Capital Adequacy
IDA uses a solvency-based capital adequacy model, which mandates that IDA hold capital for credit risk, market
risk and operational risk covering all activities and assets on its books. The main measure of capital adequacy is theDSC, a non-GAAP measure, which is the capital available to support future commitments, over and above thecurrent portfolio. IDA is required, by the Board, to keep the DSC at levels greater than or equal to zero percent. The
DSC is calculated as the amount by which Total Resources Available (TRA) exceed Total Resources Required(TRR), plus a Conservation Buffer (CB). The TRA consists of IDA’s existing equity plus accumulated provision forloan losses and other exposures. The TRR is the minimum capital required to cover expected and unexpected losses,(under a stressed but still plausible downside scenario), in connection with all of IDA’s currently existing operations
and assets. Within the TRR, there is also a capital allowance to reflect losses that result from valuing IDA’sconcessional loan portfolio in present value terms using market interest rates. This allowance is calculated using a
stressed interest rate to account for a potential future rise in market interest rates. In addition, TRR includes capitalrequirements to account for development grants which are approved but not yet expensed. It also takes into
consideration the capital adequacy protection provided by long-term fixed rate borrowings against changes in market
interest rates. The CB is an extra buffer in the amount of 10 percent of TRA.
As of March 31, 2023, the DSC was 24.5%, lower by 1.9 percentage points compared with June 30, 2022 (26.4%).
The decrease in the ratio was mainly due to the increase in TRR exceeding the increase in TRA. The increase in
TRR was primarily driven by higher capital requirements for the increase in total exposure and the increase inconditional development grants approved but not yet expensed. The increase in TRA was primarily due to theincrease in equity from subscriptions and contributions paid in. See Table 14.
In addition to the DSC framework, IDA has policies in place to ensure alignment of its lending and borrowing
activities. Included in these policies are asset coverage requirements, where management monitors asset andliquidity levels to ensure IDA’s ability to satisfy all its borrowing and commitment obligations. See IDA’s MD&A
for the fiscal year ended June 30, 2022, Section IX: Risk Management.
Table 14: Deployable Strategic Capital Ratio
In billions of U.S. dollars except ratios in percentage
As ofTotal Resources Available (TRA)
Total Resources Required (TRR)
Conservation Buffer (CB)
Deployable Strategic Capital (DSC = TRA-TRR-CB)
Deployable Strategic Capital as a percentage of TRA$$

March 31, 2023
189.6
124.2
19.0
46.4
24.5%

$

$

June 30, 2022
183.5
116.7
18.4
48.4
26.4%

$

$

Variance
6.1
7.5
0.6
(2.0)
(1.9)%

Asset - Liability Management (ALM)
Since FY22, IDA’s interim ALM policy allows, under specific criteria, funding fixed rate loans with long-term fixed
rate market debt and CPLs (both reported at amortized cost), as part of IDA’s interest rate risk management to alignthe interest rate and maturities of the debt with those of the loan portfolio. For more details, see Notes to theCondensed Quarterly Financial Statements for the period ended March 31, 2023, Note E: Borrowings.
Capital Value Protection Program
In FY20, as part of IDA’s ALM policies, IDA executed pay fixed, receive floating forward-starting swaps with anotional of $15.0 billion under a Board-approved Capital Value Protection Program. The objective of the program is
to partially reduce the sensitivity of IDA’s capital adequacy model to changes in long-term interest rates and allow
for more resources to be available for lending under the capital adequacy framework. For more details, see Notes to
the Condensed Quarterly Financial Statements for the period ended March 31, 2023, Note F: Derivative Instruments.

Management of Credit and Market Risks
Credit Risk
IDA faces two types of credit risk: country credit risk and counterparty credit risk. Country credit risk is the risk ofloss due to a country not meeting its contractual obligations, and counterparty credit risk is the risk of loss
attributable to a counterparty not honoring its contractual obligations. IDA is exposed to commercial as well as
noncommercial counterparty credit risk.

IDA Management's Discussion and Analysis: March 31, 2023

19

Management’s Discussion and Analysis

Section V: Risk Management

Country Credit Risk
IDA’s lending management framework encompasses the long-standing PBA mechanism and allocation frameworkagreed at each replenishment, complemented by additional considerations required when accessing debt markets toensure adherence to risk management (capital adequacy) requirements.
IDA regularly assesses the country credit risk of all its borrowers. IDA produces credit risk ratings for all its
borrowing countries, which reflect country economic, financial, and political circumstances, and also considers
environmental, social and governance (ESG) risk factors. Based on these risk ratings, to manage overall portfolio
risk, the allocation outcomes of the PBA and other mechanisms are reviewed to ensure that they are compatible with
the Deployable Strategic Capital Framework and Single Borrower Limit (SBL).
For FY23, the SBL has been set at $45 billion (25% of $178.7 billion of equity as of June 30, 2022). Currently, themaximum country exposure levels compatible with IDA’s overall capital adequacy target are lower than the SBL for
all IDA-borrowing countries. As a consequence, the SBL is not currently a constraining factor.
As of March 31, 2023, the ten countries with the highest exposures accounted for 64% of IDA’s total exposure(Figure 5). Monitoring these exposures relative to the SBL requires consideration of the repayment profiles ofexisting loans, as well as disbursement profiles and projected new loans and guarantees.
Figure 5: Country Exposures as of March 31, 2023
In billions of U.S. dollars

Top Ten Country Exposures
India

18.7

Bangladesh

18.7

Pakistan

16.5

Nigeria

14.2
12.9

Vietnam
Ethiopia

11.5

Kenya

10.8

Tanzania

9.6

Ghana

5.9

Uganda

4.5
0

2

4

6

8

10

12

14

16

18

20

22

In April 2023, IDA’s partial guarantee of certain Eurobonds that had been issued by the Republic of Ghana (Ghana)
was called, and in accordance with the terms of the guarantee, IDA made a payment of $50 million to the guaranteedbondholders. Pursuant to the terms of the related indemnity agreement between IDA and Ghana, Ghana is obligatedto reimburse IDA for the guarantee payment on terms determined by IDA.
Expected Losses, Overdue Payments, and Non-Performing Loans
When a borrower fails to make payments on any principal, interest, or other charges due to IDA, IDA may suspend
disbursements immediately on all loans and grants to that borrower. IDA’s current practice is to exercise this option
using a graduated approach. These practices also apply to member countries eligible to borrow from both IDA and
IBRD, and whose payments on IBRD loans may become overdue. It is IDA’s practice not to reschedule service
charges, interest or principal payments on its loans or participate in debt rescheduling agreements with respect to its
loans. As of March 31, 2023, there were no IDA borrowing countries in the accrual portfolio with overdue payments
beyond 90 days.
As an exception to the practices set forth for treatment of overdue payments, IDA has provided financing tocountries with overdue payments in specific situations. For further details, refer to IDA’s MD&A for the fiscal year
ended June 30, 2022, Section IX: Risk Management.

20

IDA Management's Discussion and Analysis: March 31, 2023

Section V: Risk Management

Management’s Discussion and Analysis

Accumulated Provision for Losses on Loans and Other Exposures
As of March 31, 2023, IDA had $187.9 billion of loans outstanding, of which loans in nonaccrual status represent
0.5% of the total loans outstanding. IDA’s total provision for losses on loans and other exposures was $5.2 billion,
which represents a provisioning rate of 1.9% of the underlying exposures as of March 31, 2023 ($4.8 billion as ofJune 30, 2022, 1.9% of the underlying exposure). See Notes to the Condensed Quarterly Financial Statements for theperiod ended March 31, 2023, Note D – Loans and Other Exposures.
Commercial Counterparty Credit Risk Exposure
Commercial counterparty credit risk is the risk that counterparties fail to meet their payment obligations under theterms of the contract or other financial instruments. Effective management of counterparty credit risk is vital to thesuccess of IDA’s funding, investment, and asset/ liability management activities. The monitoring and managementof these risks is continuous as the market environment evolves.
As a result of IDA’s use of mark-to-market collateral arrangements for swap transactions, its residual commercial
counterparty credit risk exposure is concentrated in the investment portfolio, in instruments issued by sovereign
governments and non-sovereign holdings (including Agencies, Asset-backed securities, Corporates, and Time
Deposits) (See Table 15).
As shown in Table 15, as of March 31, 2023, 71% of IDA’s investment portfolio is rated AA or above, and theremainder is rated A, reflecting IDA’s continued preference for highly rated securities and counterparties across all
categories of financial instruments.
Total commercial counterparty credit exposure, net of collateral held, was $37.1 billion as of March 31, 2023. For
the contractual value, notional amounts and related credit risk exposure amounts by instrument, see Notes to theCondensed Quarterly Financial Statements for the period ended March 31, 2023, Note F: Derivative Instruments.
Table 15: Commercial Credit Exposure, Net of Collateral Held, by Counterparty Rating
In millions of U.S. dollars, except rates in percentages

Counterparty Rating a
AAA
AA
A
Total

Counterparty Rating a
AAA
AA
A
Total

As of March 31, 2023
Sovereigns Non-Sovereigns Net Swap Exposure Total Exposure % of Total$$

9,125 $
2,786
5,008
16,919 $3,377 $
10,9395,653
19,969 $

— $
73
177
250 $

12,502
13,798
10,83837,138

34 %
37
29
100 %

As of June 30, 2022
Sovereigns Non-Sovereigns Net Swap Exposure Total Exposure % of Total$$

10,567 $
2,226
4,256
17,049 $5,038 $
11,9495,901
22,888 $

— $
155
284
439 $

15,605
14,33010,44140,376

39 %
35
26
100 %

a. Average rating is calculated using available ratings from the three major rating agencies; however, if ratings are not available
from each of the three rating agencies, IDA uses the average of the ratings available from any of such rating agencies or a single
rating to the extent that an instrument or issuer (as applicable) is rated by only one rating agency.

Market Risk
IDA is exposed to changes in interest and exchange rates and uses derivatives to manage its exposure to market
risks. Derivatives are used to align the interest and currency composition of its assets (loan and investment trading
portfolios) with that of its liabilities (borrowing portfolio) and equity. In addition, IDA also issues long-term fixed
rate debt to fund fixed rate loans. The loan, investment and borrowing portfolios are largely maintained in SDR and
its component currencies.
Interest Rate Risk
IDA is exposed to interest rate risk due to mismatches between its assets (loan and investment portfolios) and its
liabilities (borrowing portfolio) both in terms of maturity and instrument type. With IDA’s lengthy disbursement

IDA Management's Discussion and Analysis: March 31, 2023

21

Management’s Discussion and Analysis

Section V: Risk Management

profile, the duration of IDA’s loans is relatively long (11 years). This long duration, combined with volatility inmarket interest rates, results in significant year-on-year variability in the fair value of loans. However, since the loan
portfolio is not reported at fair value under U.S. GAAP, the impact of this variability on IDA’s Balance Sheet is not
fully evident. IDA’s investment-trading portfolio (liquid asset portfolio) has a relatively low sensitivity to interest
rates with a duration of four months as of March 31, 2023.
Under its integrated financing model, IDA employs the following strategies to manage interest rate risk:• The capital adequacy policies factor in the sensitivity to interest rates.
• Matching interest rates between assets and related funding to minimize open interest rate positions.
• The funding risk related to the mismatch between the maturity profile of the debt funding and the related assets ismonitored through duration measurements and adjustments to capital requirements to cover this risk.
Alternative Reference Rate
The Financial Conduct Authority (FCA), the regulator of London Interbank Offered Rate (LIBOR), confirmed that
effective December 31, 2021, all the LIBOR settings, except for certain USD LIBOR, which will be available until
June 30, 2023, would cease to be provided by any administrator or were no longer representative. In consideration of
the regulatory guidance and in preparation for the global markets’ transition away from LIBOR, IDA took thenecessary steps to facilitate a smooth and orderly transition of its financial instruments to alternative reference rates.
This transition started on January 1, 2022.
Out of the total loans outstanding as of March 31, 2023, 98% are not subject to transition to alternative reference
rates as they are on fixed-rate terms. Of the remaining, less than 1% have transitioned and less than 2% are still
subject to transition to alternative reference rates.The USD fixed spread loans will begin transitioning in July 2023,
as the loans reset.
As of March 31, 2023, IDA’s borrowing portfolio before associated derivatives carries only fixed interest rates andis not subject to transition to alternative reference rates. Out of the total derivative portfolio notional as of March 31,
2023, 61% of the total derivative portfolio notional are not subject to transition to alternative reference rates, 34%
are subject to transition and approximately 5% have transitioned to alternative reference rates. For the vast majorityof the derivative portfolio subject to transition, IDA either has sufficient provisions in the derivative agreementswith its counterparties or has adhered to the International Swaps and Derivatives Association (ISDA) 2020 IBOR
Fallbacks Protocol (IBOR Protocol) or works bilaterally with counterparties to ensure smooth transition toalternative reference rates.
IDA will continue to work with key stakeholders, including internal subject matter experts, senior management,
borrowers, industry groups and other market participants, to mitigate potential financial and operational risks towhich IDA is exposed and to ensure an orderly transition to alternative reference rates.
Exchange Rate Risk
Changes in exchange rates affect the capital adequacy of IDA when the currency of the equity supporting the loan
portfolio and other assets is different from that of the risk exposure. Accordingly, the primary objective of IDA’s
currency risk management is to protect IDA’s financial capacity from exchange rate movements, as measured by thecapital adequacy framework. To achieve this, IDA’s balance sheet is managed in multiple currencies: SDR and thecurrencies comprising the SDR basket. The exchange rate risk management methodology encompasses the hedging
of currency risk arising from the various inflows and outflows inherent in IDA’s business model.
IDA uses currency forward contracts to convert future inflows from members’ receivables provided in national
currencies into the five currencies of the SDR basket, thereby aligning the currency composition of member
contributions with the net cash outflows relating to loans and grants, which are primarily denominated in the SDR.
The payable leg of the currency forward contracts economically hedging member equity contribution pledges isdenominated in non-functional currencies. IDA pays the market counterparty in a non-SDR currency. Accordingly,(depreciation) appreciation of the non-SDR currencies against the U.S. dollar results in exchange rate gains orlosses, which are reported in the Statements of Income. The translation adjustment on future inflows from members,
even though they are not recorded in the balance sheet, is the economic offset to the translation adjustment on nonfunctional currencies of currency forward contracts.

22

IDA Management's Discussion and Analysis: March 31, 2023

Management’s Discussion and Analysis

Section V: Risk Management

Liquidity Risk
Liquidity risk arises in the general funding of IDA’s activities and in managing its financial position. It includes therisk of IDA being unable to fund its portfolio of assets at appropriate maturities and rates, and the risk of being
unable to liquidate a position in a timely manner at a reasonable price.
IDA’s aggregate liquid asset holdings are kept above a specified prudential minimum to safeguard against cash flowinterruptions. The prudential minimum is equal to 80% of 24 months of projected net outflows. For FY23, theprudential minimum has been set at $20.8 billion. As of March 31, 2023, IDA’s liquid assets were $34.8 billion,
167% of the FY23 prudential minimum.
IDA will hold liquidity above the prudential minimum to ensure sufficient liquidity under a wide range of shock
scenarios as well as to give it flexibility in timing its borrowing transactions and to meet working capital needs.
Operational Risk
Operational risk is defined as the risk of financial loss, or damage to IDA’s reputation resulting from inadequate or
failed internal processes, people, and systems, or from external events.
IDA recognizes the importance of operational risk management activities, which are embedded in its financial
operations. As part of its business activities, IDA is exposed to a range of operational risks including physicalsecurity and staff health and safety, data and cyber security, business continuity, and third-party vendor risks. IDA’s
approach to identifying and managing operational risk includes a dedicated program for these risks and a robust
process that includes identifying, assessing, and prioritizing operational risks, monitoring, and reporting relevant key
risk indicators, aggregating, and analyzing internal and external events, and identifying emerging risks that may
affect business units and developing risk response and mitigating actions.

IDA Management's Discussion and Analysis: March 31, 2023

23

Management’s Discussion and Analysis

Section VI: Governance

Section VI: Governance
Senior Management Changes
On April 11, 2023, David Malpass informed the Board that he would resign as World Bank Group President,
effective at the close of business on June 1, 2023. Ajay Banga was appointed as President of the World Bank Groupeffective June 2, 2023.
On March 1, 2023, Mari Pangestu retired as Managing Director for Development Policy and Partnerships.
Effective April 3, 2023, Axel van Trotsenburg became the Senior Managing Director for the World Bank's
Development Policy and Partnerships and Anna Bjerde was appointed Managing Director for Operations,
succeeding Axel van Trotsenburg in that role.

24

IDA Management's Discussion and Analysis: March 31, 2023

Management’s Discussion and Analysis

List of Tables, Figures and Box

List of Tables, Figures and Box
TablesTable 1: Cumulative Net Commitments since July 1, 2022
Table 2: Utilization of PSW Commitments
Table 3: Condensed Statements of Income
Table 4: Condensed Balance Sheets
Table 5: Changes in Equity
Table 6: Net Loans Outstanding activity
Table 7: Net Commitments of Loans and Guarantees by Region
Table 8: Net Commitments of Grants by Region
Table 9: Gross Disbursements of Loans and Grants by Region
Table 10: Revenue and Loan Balances by Product Category
Table 11: Net Non-Interest Expense
Table 12: Other Revenue (Expenses), net
Table 13: Unrealized Mark-to-Market gains (losses) on non-trading portfolios, net
Table 14: Deployable Strategic Capital Ratio
Table 15: Commercial Credit Exposure, Net of Collateral Held, by Counterparty Rating

9
9
11
11
12
12
13
13
13
14
16
16
17
19
21

FiguresFigure 1: Net Loans Outstanding
Figure 2: Net Investment Portfolio
Figure 3: Net Investment Revenue - YTD
Figure 4: Borrowing Portfolio
Figure 5: Country Exposures as of March 31, 2023

12
14
14
15
20

Box
Box 1: Selected Financial Data

2

IDA Management's Discussion and Analysis: March 31, 2023

25

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26

IDA Management's Discussion and Analysis: March 31, 2023

INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA)
CONTENTS
March 31, 2023

CONDENSED QUARTERLY FINANCIAL STATEMENTSCONDENSED BALANCE SHEETS

28

CONDENSED STATEMENTS OF INCOME

30

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

31

CONDENSED STATEMENTS OF CHANGES IN ACCUMULATED DEFICIT

31

CONDENSED STATEMENTS OF CASH FLOWS

32

NOTES TO CONDENSED QUARTERLY FINANCIAL STATEMENTS

33

INDEPENDENT AUDITOR'S REVIEW REPORT52

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)27

CONDENSED BALANCE SHEETS

Expressed in millions of U.S. dollars
March 31, 2023
(Unaudited)
AssetsDue from banks—Notes C and J
Unrestricted cash
Restricted cash$

Investments (including securities transferred under repurchase or
securities lending agreements of $894 million—March 31, 2023; Nil—
June 30, 2022) —Notes C, G and J

789
24
813

June 30, 2022
(Unaudited)

$

662
24
686

36,55739,827

264

404

1,228

1,006

Loans outstanding—Notes D, G and J
Total loans approved

263,488

250,300

Less: Undisbursed balance (including signed loan commitments of$66,922 million—March 31, 2023; $61,812 million—June 30,
2022)
Loans outstanding
Less: Accumulated provision for loan losses
Deferred loan income
Net loans outstanding(75,583)
187,905(3,811)(20)
184,074(72,209)
178,091(3,583)(18)
174,490

5,589

3,601

Derivative assets, net—Notes C, F, G and J
Receivable from affiliated organization—Note G

Other assets—Notes C, D, G and H
Total assets

28$

228,525$

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)

220,014

March 31, 2023
(Unaudited)
Liabilities
Borrowings—Notes E and J
Market borrowings, at fair valueMarket borrowings, at amortized cost
Concessional partner loans, at amortized cost$

Securities sold under repurchase agreements, securities lent under
securities lending agreements, and payable for cash collateral received—Notes C and J

18,0688,640
7,338
34,046

June 30, 2022
(Unaudited)$

19,7186,201
6,980
32,899961—

Derivative liabilities, net—Notes C, F, G and J

1,125

579

Payable for development grants—Note H

3,625

4,615

Payable to affiliated organization—Note G

538

578

3,871
44,166

2,675
41,346306,214289,536(36,076)(4,014)
266,124(27,902)(3,857)257,777(12,651)(10,167)

(247)

(246)

Accumulated deficit (Statements of Changes in Accumulated Deficit)(61,734)(59,544)

Accumulated other comprehensive loss—Note I(7,133)(9,152)

184,359

178,668

Other liabilities—Notes C and D
Total liabilities
EquityMembers' subscriptions and contributions—Note B
Subscriptions and contributions committed
Less:
Subscriptions and contributions receivable
Cumulative discounts/credits on subscriptions and contributions, net
Subscriptions and contributions paid-in
Nonnegotiable, non interest-bearing demand obligations on account ofmembers' subscriptions and contributions
Deferred amounts to maintain value of currency holdings

Total equity
Total liabilities and equity$

228,525$

220,014The Notes to Condensed Quarterly Financial Statements are an integral part of these Statements.

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)29

CONDENSED STATEMENTS OF INCOME
Expressed in millions of U.S. dollars
Three Months Ended
March 31,
(Unaudited)
2023
2022
Interest revenue
Loans, net—Note D
Investments, net—Notes C and G
Asset-liability management derivatives, net—Notes F and J

$

592
300
5

$

494
40
—

Nine Months Ended
March 31,
(Unaudited)
2023
2022

$

1,643
705
11

$

1,461
106
—

Borrowing expenses, net—Note E

(288)

(59)

(655)

(155)

Interest revenue, net of borrowing expenses

609

475

1,704

1,412

Provision for losses on loans and other exposures—Note D

(144)

(76)

(379)

(210)

Non-interest revenue
Revenue from externally funded activities—Note G
Commitment charges—Note D
Other
Total

242
7
8
257

221
6
5
232

648
21
22
691

582
18
17
617

Non-interest expenses
Administrative—Note G
Other
Total

(581)
(4)
(585)

(544)
(10)
(554)

(1,705)(28)(1,733)(1,593)(66)(1,659)

—

—

117

274

(672)

(410)

(2,813)(1,396)

Non-functional currency translation adjustment gains, net

61

16

94

223

Unrealized mark-to-market gains (losses) on InvestmentsTrading portfolio, net—Notes F and J

60

(85)

(18)

(6)

Unrealized mark-to-market (losses) gains on non-trading
portfolios, net—Note J

(27)

525

147

438

(441) $

123

(2,190) $(307)

Transfers from affiliated organizations and others—Note G
Development grants—Note H

Net (loss) income$$

The Notes to Condensed Quarterly Financial Statements are an integral part of these Statements.

30

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
Expressed in millions of U.S. dollars

Three Months Ended
March 31,
(Unaudited)
2023
2022

Net (loss) income$(441) $

Nine Months Ended
March 31,
(Unaudited)
2023
2022

123

$

(2,190) $(307)

Other comprehensive income (loss)—Note I
Currency translation adjustments on functional currencies
Net Change in Debit Valuation Adjustment (DVA) on Fair
Value option elected liabilities
Comprehensive income (loss)

$

1,700

(1,803)

2,014(4,693)

(10)

48

5

(1)

(1,632) $(171) $

1,249$

(5,001)CONDENSED STATEMENTS OF CHANGES IN ACCUMULATED DEFICIT
Expressed in millions of U.S. dollars
Nine Months Ended
March 31,
(Unaudited)
2023
2022
Accumulated deficit at beginning of the fiscal year$

Net loss
Accumulated deficit at end of the period$(59,544) $(59,556)(2,190)(307)(61,734) $(59,863)

The Notes to Condensed Quarterly Financial Statements are an integral part of these Statements.

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)31

CONDENSED STATEMENTS OF CASH FLOWS
Expressed in millions of U.S. dollars
Nine Months Ended
March 31,
(Unaudited)
2023
2022
Cash flows from investing activities
Loans
Disbursements
Principal repayments
Non-trading securities—Investments
Repayments
Net cash used in investing activities$ (12,732) $ (9,198)
5,506
4,913

Cash flows from financing activities
Members' subscriptions and contributions
Medium and long-term borrowings
New issues
Retirements
Short-term borrowings (original maturities greater than 90 days)
New issues
Retirements
Net short-term borrowings (original maturities less than 90 days)
Net derivatives-borrowings
Net cash provided by financing activities
Cash flows from operating activities
Net loss
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Provision for losses on loans and other exposures, charge
Non-functional currency translation adjustment gains, net
Unrealized mark-to-market gains on non-trading portfolios, net
Other non-interest expenses, net
Amortization of borrowing costs
Changes in:
Net Investment portfolio
Other assets and liabilities
Net cash provided by (used in) operating activities

96(7,130)114(4,171)

5,862

5,724

2,217
(77)

7,205
(72)

5,079
(4,958)(1,766)
(6)
6,351

4,884
(4,906)(191)
112,645(2,190)

(307)

379
(94)
(147)
8
123

210
(223)
(438)
49
76

5,025
(2,202)902(5,468)(2,190)(8,291)

4
127
686
813

(16)
167
496
663

Effect of exchange rate changes on unrestricted and restricted cash
Net increase in unrestricted and restricted cash
Unrestricted and restricted cash at beginning of the fiscal year
Unrestricted and restricted cash at end of the period$

Supplemental disclosure
Increase (Decrease) in ending balances resulting from exchange rate fluctuations:
Loans outstanding
Investment portfolio
Borrowings
Derivatives—Borrowings
Derivatives—Asset-liability management
Principal repayments written off under Heavily Indebted Poor Countries Debt Initiative
Interest paid on borrowing portfolio$ 2,610 $ (5,609)
481
(946)
930
(1,339)
(14)
190
77
654
19
25
429
81

$

The Notes to Condensed Quarterly Financial Statements are an integral part of these Statements.

32

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)NOTES TO CONDENSED QUARTERLY FINANCIAL STATEMENTSNOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING AND RELATED POLICIESBasis of Preparation
These unaudited condensed quarterly financial statements and notes should be read in conjunction with the June 30,
2022 audited financial statements and notes included therein. The condensed comparative information that has been
derived from the June 30, 2022 audited financial statements has not been audited. In the opinion of management, thecondensed quarterly financial statements reflect all adjustments necessary for a fair presentation of IDA’s financial
position and results of operations in accordance with accounting principles generally accepted in the United States ofAmerica (U.S. GAAP).
Management makes estimates and assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the condensed quarterly financial statements and thereported amounts of revenue and expenses during the reporting periods. Due to the inherent uncertainty involved in
making those estimates, actual results could differ from those estimates. Areas in which significant estimates havebeen made include, but are not limited to, the provision for losses on loans and other exposures and valuation ofcertain financial instruments carried at fair value. The results of operations for the first nine months of the current
fiscal year are not necessarily indicative of the results that may be expected for the full year.
Certain reclassifications of the prior year’s information have been made to conform with the current year’s
presentation.
These financial statements were issued on May 12, 2023, which was also the date through which IDA’s management
evaluated subsequent events.
Accounting and Reporting Developments
Evaluated Accounting Standards:
In December 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU)
2022-06 - Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. The ASU extended thetimeline for temporary relief to certain contract modification guidance provided by ASU 2020-04 - Reference Rate
Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting from December
31, 2022 to December 31, 2024. ASU 2022-06 was effective upon issuance, and the adoption did not have a material
impact on IDA’s financial statements.
In November 2021, the FASB issued the ASU 2021-10, Disclosure by Business Entities about Government
Assistance, which requires entities to make certain annual disclosure about government assistance transactions. This
will be effective for IDA from the fiscal year ending June 30, 2023 (annual statements of fiscal year 2023). IDA has
evaluated the ASU and determined no additional disclosures are required on its financial statements.
Accounting Standards under evaluation:
In March 2022, the FASB issued the ASU 2022-02, Troubled Debt Restructurings and Vintage Disclosures, which
eliminates the accounting guidance on troubled debt restructurings for creditors and amends the guidance on“vintage disclosures” to require disclosure of current-period gross write-offs by year of origination. This ASU will
be effective for IDA from the quarter ending September 30, 2023 (fiscal year 2024). IDA is currently evaluating theimpact of the ASU on its financial statements.

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)33

NOTE B—MEMBERS’ SUBSCRIPTIONS AND CONTRIBUTIONS
The movement in Subscriptions and Contributions paid-in is summarized below:
Table B1: Subscriptions and contributions paid-in
In millions of U.S. dollars
Beginning of the fiscal year
Cash contributions received
Demand obligations received
Translation adjustment
End of the period/fiscal year

March 31, 2023
257,777
1,810
6,526
11
$
266,124$

June 30, 2022
250,452
3,937
4,668(1,280)257,777$$

During the nine months ended March 31, 2023, IDA encashed demand obligations totaling $4,052 million.

NOTE C—INVESTMENTS
The investment securities held by IDA are designated as either trading or non-trading. All securities are carried andreported at fair value, or at face value, which approximates fair value.
As of March 31, 2023, IDA’s Investments were mainly comprised of government and agency obligations (57%) andtime deposits (42%), with all of the instruments classified as either Level 1 or Level 2 within the fair value
hierarchy. As of March 31, 2023, the largest holding of investments with a single counterparty was Japanese
government instruments (10%).
A summary of IDA’s Investments is as follows:
Table C1: Investments-composition
In millions of U.S. dollars
March 31, 2023
Trading
Government and agency obligations
Time deposits
Asset-backed securities (ABS)
Non-trading
Debt securities
Total

34

$

$

20,666
15,527
119
36,312$245
36,557

June 30, 2022$$

23,902
15,411
168
39,481$

346
39,827

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)IDA manages its investments on a net portfolio basis. IDA uses derivative instruments to manage currency andinterest rate risk in the investment portfolio. For details regarding these instruments, see Note F—Derivative
Instruments. The following table summarizes IDA’s net portfolio position:
Table C2: Net investment portfolio position
In millions of U.S. dollars
March 31, 2023
Investments
Trading
Non-trading
Total

$

June 30, 2022

36,312245
36,557

Securities sold under repurchase agreements, securities lent under
securities lending agreements, and payable for cash collateral received a$39,481
346
39,827(1,434)(772)

Derivative Assets
Currency swaps and currency forward contracts
Interest rate swaps
Total

76
3
79

306
2
308

Derivative Liabilities
Currency swaps and currency forward contracts
Interest rate swaps
Total

(124)
—
(124)

(50)
(1)
(51)

Cash held in investment portfolio b
Receivable from investment securities traded and other assets c
Payable for investment securities purchased d
Net Investment Portfolio

757
427(1,176)35,086 $

$

583
9
(343)
39,561a. Includes $473 million of cash collateral received from counterparties under derivative agreements ($772 million - June 30,2022).
b. These amounts are included in Unrestricted cash under Due from Banks on the Condensed Balance Sheets.
c. These amounts are included in Other assets on the Condensed Balance Sheets.
d. These amounts are included in Other liabilities on the Condensed Balance Sheets. As of March 31, 2023 there were no shortsales (Nil - June 30, 2022).

The maturity structure of IDA’s non-trading investment portfolio (principal amount due on a debt security with IFC)
was as follows. For details regarding this instrument, see Note G - Transactions With Affiliated Organizations.
Table C3: Maturity structure of non-trading investment portfolio
In millions of U.S dollars
MaturityLess than 1 year
Between1 - 2 years
2 - 3 years
3 - 4 years
4 - 5 years
Thereafter (through 2039)
Total

March 31, 2023
$

77

$

62
34
12
11
66
262

$

June 30, 2022
96

$

77
62
34
12
77
358

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)35

Commercial Credit Risk
For the purposes of risk management, IDA is party to a variety of financial transactions, certain of which involve
elements of credit risk. Credit risk exposure represents the maximum potential loss due to possible nonperformanceby obligors and counterparties under the terms of the contracts. For all securities, IDA limits trading to a list of
authorized dealers and counterparties. In addition, credit limits have been established for counterparties by type of
instrument and maturity category.
Swap Agreements: Credit risk is mitigated through a credit approval process, volume limits, monitoring procedures
and the use of mark-to-market collateral arrangements. IDA may require collateral in the form of cash or otherapproved liquid securities from individual counterparties to mitigate its credit exposure.
IDA has entered into master derivative agreements, which contain legally enforceable close-out netting provisions.
These agreements may further reduce the gross credit risk exposure related to the swaps. Credit risk with financial
assets subject to a master derivatives arrangement is further reduced under these agreements to the extent thatpayments and receipts with the counterparty are netted at settlement. The reduction in exposure as a result of these
netting provisions can vary due to the impact of changes in market conditions on existing and new transactions. The
extent of the reduction in exposure may therefore change substantially within a short period of time following thebalance sheet date. For more information on netting and offsetting provisions, see Note F—Derivative Instruments.
The following is a summary of the collateral received by IDA in relation to swap transactions.
Table C4: Collateral received
In millions of U.S. dollars
March 31, 2023
Collateral received
Cash
Securities
Total collateral received
Collateral permitted to be repledged
Amount of collateral repledged
Amount of cash collateral invested

$
$
$

473
122
595
595
—
369

June 30, 2022
$
$
$

772
—
772
772
—
659

Securities Lending: IDA may engage in securities lending and repurchases, against adequate collateral, as well as
securities borrowing and reverse repurchases (resales) of government and agency obligations, mortgage-backed
securities and ABS. These transactions, if any, are conducted under legally enforceable master netting
arrangements, which allow IDA to reduce its gross credit exposure related to these transactions. IDA presents its
securities lending and repurchases, as well as resales, on a gross basis on the Condensed Balance Sheets. As of
March 31, 2023 and June 30, 2022, there were no amounts that could potentially be offset as a result of legally
enforceable master netting arrangements.
Securities lending agreements and repurchase agreements expose IDA to several risks, including counterparty risk,
reinvestment risk, and risk of a collateral gap (increase or decrease in the fair value of collateral pledged). IDA has
procedures in place to ensure that trading activity and balances under these agreements are below predefinedcounterparty and maturity limits, and to actively monitor net counterparty exposure, after collateral, using daily
market values. Whenever the collateral pledged by IDA related to its borrowings under securities lending
agreements and repurchase agreements declines in value, the transaction is re-priced as appropriate by returning
cash or pledging additional collateral.
As of March 31, 2023, liabilities relating to securities transferred under repurchase or securities lending agreements
amounted to $961 million (Nil— June 30, 2022). Of the liabilities relating to securities transferred under repurchaseor securities lending agreements, $54 million had not been settled as of March 31, 2023. There were no replacement
trades entered into in anticipation of maturing trades of a similar amount (Nil—June 30, 2022). The remaining
contractual maturity of these agreements as of March 31, 2023 were overnight and continuous, or less than 30 days.
The securities transferred were mainly comprised of government and agency obligations.
As of March 31, 2023, and June 30, 2022, there were no securities purchased under resale agreements.
36

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)NOTE D—LOANS AND OTHER EXPOSURESIDA’s loans and other exposures are generally made to, or guaranteed by, member countries of IDA. Loans arecarried at amortized cost. Other exposures include Deferred Drawdown Options (DDO), Irrevocable Commitments
and Guarantees. Based on IDA’s internal credit quality indicators, the majority of the loans outstanding are in theMedium and High-risk classes.
IDA excludes the interest and service charges receivable balance from the amortized cost basis and the related
disclosures as permitted by U.S. GAAP. Accrued interest income on loans of $718 million as of March 31, 2023($521 million—June 30, 2022) are presented in Other assets on the Condensed Balance Sheets.
As of March 31, 2023, 0.5% of IDA’s loans were in nonaccrual status and related to three borrowers. The total
accumulated provision for losses on loans in accrual status and nonaccrual status was 2% of total loans as ofMarch 31, 2023.
Credit Quality of Sovereign Loans
Based on an evaluation of IDA’s exposures, management has determined that IDA has one portfolio segment –Sovereign Exposures. IDA’s loans constitute the majority of the Sovereign Exposures portfolio segment.
IDA’s country risk ratings are an assessment of its borrowers’ ability and willingness to repay IDA on time and in
full. These ratings are internal credit quality indicators. Individual country risk ratings are derived on the basis ofboth quantitative and qualitative analyses. The components considered in the analysis can be grouped broadly into
eight categories: political risk, external debt and liquidity, fiscal policy and public debt burden, balance of payments
risks, economic structure and growth prospects, monetary and exchange rate policy, financial sector risks, andcorporate sector debt and vulnerabilities. The analysis also considers Environmental, Social and Governance factors.
For the purpose of analyzing their risk characteristics, these exposures are grouped into three classes in accordancewith assigned borrower risk ratings, which relate to the likelihood of loss: Low, Medium and High risk classes, aswell as exposures in nonaccrual status.
IDA’s borrower country risk ratings are key determinants in the provision for loan losses. Country risk ratings ofborrowers in accrual status are grouped in pools with similar credit ratings for the purpose of the calculation of the
expected credit losses. Exposure for certain countries in accrual status may be individually assessed on the basis thatthey do not share common risk characteristics with an existing pool of exposures. All exposures for countries innonaccrual status are individually assessed. Country risk ratings are determined in review meetings that take place
several times a year. All countries are reviewed at least once a year, or more frequently if circumstances warrant, todetermine the appropriate ratings.
An assessment was also performed to determine whether a qualitative adjustment was needed on the loan loss
provision as of March 31, 2023, including consideration of global and macroeconomic events. Management
concluded that a qualitative adjustment beyond the regular application of IDA’s loan loss provision framework was
not warranted.
IDA considers loans to be past due when a borrower fails to make payment on any principal, interest or othercharges due to IDA on the dates provided in the contractual loan agreement.

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)

37

The following tables provide an aging analysis of loans outstanding:
Table D1: Loans-Aging structure
In millions of U.S. dollars
March 31, 2023
Days past due
Up to 45
Risk Class
Low$—
Medium—High
30
Loans in accrual status
30
Loans in nonaccrual status
6
Total
$
36

46-60
$

$

—
—
—
—
*
*

61-90
$

$

—
—
*
*
2
2

91-180
$

$

—
—
—
—
10
10

Over 180

Total Past
Due

$

$

$

—
—
—
—
440
440

$

—
—
30
30
458
488

Current

Total

$

— $
—
19,571
19,571
167,426 a 167,456
186,997
187,027420878$ 187,417 $ 187,905

Table D1.1:
In millions of U.S. dollars
June 30, 2022
Days past due
Up to 45
Risk Class
Low$—
Medium—High
7
Loans in accrual status
7
Loans in nonaccrual status
7
Total
$
14

46-60
$

$

—
—
*
*
*
*

61-90
$

$

—
—
6
6
3
9

91-180
$

$

—
—
11
11
8
19

Over 180

Total Past
Due

$

$

$

—
—
—
—
408
408

$

—
—
24
24
426
450

Current
$

374 $
374
20,491
20,491
156,335 a 156,359
177,200
177,224441
867$ 177,641 $ 178,091

a. Includes Private Sector Window (PSW) related loans of $75 million ($50 million-June 30, 2022).
* Indicates amount less than $0.5 million

38

Total

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)

The table below discloses the outstanding balances of IDA’s loan portfolio as of March 31, 2023 classified by theyear the loan agreement was signed. IDA considers the signature date of a loan as the best indicator of the decision
point in the origination process, rather than the disbursement date.
Table D2: Loan portfolio vintage disclosure
In millions of U.S. dollars
March 31, 2023
Fiscal Year of origination
Risk Class

2023

Low
Medium
High

$

—
83
3,729

2022
$

2021

—
112
6,191

$

—
395
9,415

2020
$

—
546
8,458

Prior
Years

2019
$

—
245
10,551$—
18,190128,744

CAT DDOs
disbursed
andrevolving

CAT DDOs
Converted
to Term
Loans

Loans
Outstanding
as ofMarch 31,
2023

$

$

$

—
—
178

Loans in accrual
status

3,812

6,303

9,810

9,004

10,796

146,934

178

Loans innonaccrual status
Total—$ 3,812—$ 6,303—$ 9,810—$ 9,004—$ 10,796

878$147,812 $

—
178

—
—
190
190

$

—
190

—
19,571
167,456
187,027$878
187,905

Table D2.1:
In millions of U.S. dollars
June 30, 2022
Fiscal Year of origination
Risk Class

2022

Low
Medium
High

$

—
111
3,678

2021
$

—
394
7,509

2020
$

—
542
7,233

2019
$

—
243
9,365

Prior
Years

2018
$

—
77
10,042$374
19,124
118,173

CAT DDOs
disbursed
andrevolving

CAT DDOs
Converted
to Term
Loans

Loans
Outstanding
as ofJune 30,
2022

$

$

$

—
—
182

Loans in accrual
status

3,789

7,903

7,775

9,608

10,119137,671

182

Loans innonaccrual status
Total—$ 3,789—$ 7,903—$ 7,775—$ 9,608—$ 10,119867$138,538 $

—
182

—
—
177
177

$

—
177

374
20,491
156,359
177,224$867
178,091

The amount of Catastrophe Deferred Drawdown Option (CAT DDO) outstanding and revolving converted to termloans during the three and nine months ended March 31, 2023 was nil and $5 million, respectively.
Accumulated Provision for Losses on Loans and Other Exposures
Management determines the appropriate level of accumulated provisions for losses, which reflects the expected
losses inherent in IDA’s exposures. Management reassesses the adequacy of the accumulated provision on aquarterly basis and adjustments to the accumulated provision are recorded as a charge to or release of provision in
the Statements of Income. In addition, the reasonableness of the inputs and assumptions used is reassessed at least
annually.
The provision for Heavily Indebted Poor Countries (HIPC) Debt Initiative and Multilateral Debt Relief Initiative(MDRI) is based on a quantitative and qualitative analyses of various factors, including estimates of Decision Point
and Completion Point dates. These factors are reviewed periodically as part of the reassessment of the adequacy of
the accumulated provision for loan losses. Provisions are released as qualifying debt service becomes due and is

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)39

forgiven under the HIPC Debt Initiative. The provision is reduced by the amount of the eligible loans written off
when a country reaches Completion Point and becomes eligible for MDRI debt relief.
During the nine months ended March 31, 2023, and the fiscal year ended June 30, 2022, there were no loans written
off under the MDRI.
Changes to the accumulated provision for losses on loans and other exposures are summarized below.
Table D3: Accumulated provisions
In millions of U.S. dollars
March 31, 2023
Loans
Loan
outstanding
commitments
Accumulated provision, beginning of the fiscal year $2,876 $
1,082
Provision, net - charge (release)214
129
Loans written off under:
HIPC/MDRI and other(3)—
Translation adjustment
42
23
Accumulated provision, end of the period$
3,129 $
1,234
Including accumulated provision for losses on:
Loans in accrual status$
2,891
Loans in nonaccrual status
238
Total
$
3,129
Loans:
Loans in accrual status
Loans in nonaccrual status
Loans outstanding

Debt relief
under
HIPC/MDRI
$
707
(11)

$
$
$

Other a
$
155
47

(19)ᵇ
5
682
$

—
2
204

407
275
682

$
$

Total
4,820
379

$

(22)
72
5,249

$
$
$
$

3,298
513
3,811
187,027878
187,905

Table D3.1:
In millions of U.S. dollars
June 30, 2022
Loans
Loan
outstanding
commitments
Accumulated provision, beginning of the fiscal year $2,946 $
1,054
Provision, net - charge (release)135
109
Loans written off under:
HIPC/MDRI——Translation adjustment
(205)
(81)
Accumulated provision, end of the period$
2,876 $
1,082
Including accumulated provision for losses on:
Loans in accrual status$
2,641
Loans in nonaccrual status
235
Total
$
2,876
Loans:
Loans in accrual status
Loans in nonaccrual status
Loans outstanding

Debt relief
under
HIPC/MDRI
$
772
(5)

$
$
$

Other a
$
120
39

(30)ᵇ
(30)
707
$

$

Total
4,892
278

—
(4)
155 $

(30)
(320)
4,820

$

3,074
509
3,583

433
274
707

a. These amounts primarily relate to outstanding guarantees.
b. Represents debt service reduction under HIPC.

40

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)$$$

177,224867
178,091

Reported as Follows
Condensed Statements of Income

Condensed Balance Sheets
Accumulated Provision forLosses on:
Loans outstanding

Accumulated provision for loan losses

Provision for losses on loans and otherexposures, release (charge)

Debt Relief under
HIPC/MDRI

Accumulated provision for loan losses

Provision for losses on loans and otherexposures, release (charge)

Loan commitments and Other
Exposures

Other liabilities

Provision for losses on loans and otherexposures, release (charge)

Overdue Amounts
As of March 31, 2023, there were no principal or charges under sovereign loans in accrual status which were
overdue by more than three months.
The following tables provide a summary of selected financial information related to loans in nonaccrual status:
Table D4: Loans in nonaccrual status
In millions of U.S. dollars

Borrower
Eritrea

Nonaccrual
sinceRecorded
investment

Averagerecorded
investment

Principal
Outstanding

Provisionfor debt
reliefProvision
for loanlosses a

March 2012

$

420

$

412

$

420

$

275

$

15

$
$

14
444
878
867

$
$

14
435
861
907

$
$

14
444
878
867

$
$

—
—
275
274

$
$

1
222
238
235

Syrian Arab
Republic
June 2012
Zimbabwe
October 2000
Total - March 31, 2023
Total - June 30, 2022

Overdue amounts
Principal

Charges

$

124

$

37

$
$

13
321
458
426

$
$

1
69
107
101

a. Loan loss provisions are determined after taking into account accumulated provision for debt relief.

During the nine months ended March 31, 2023 and 2022, no new loans were placed into nonaccrual status.
During the three and nine months ended March 31, 2023, service charge revenue not recognized as a result of loans
being in nonaccrual status was $1 million and $4 million, respectively ($2 million and $5 million – three and ninemonths ended March 31, 2022, respectively).
During the three and nine months ended March 31, 2023, service charge revenue recognized on loans in nonaccrual
status was less than $0.5 million (less than $0.5 million – three and nine months ended March 31, 2022).
Guarantees
Guarantees of $2,597 million were outstanding as of March 31, 2023 ($2,507 million—June 30, 2022). This amountincludes $768 million relating to the PSW ($638 million—June 30, 2022). The outstanding amount of guarantees
represents the maximum potential undiscounted future payments that IDA could be required to make under theseguarantees and are not included on the Condensed Balance Sheets. The guarantees issued by IDA have original
maturities ranging between 3 and 22 years and expire in decreasing amounts through 2043.
As of March 31, 2023, liabilities related to IDA’s obligations under guarantees included the obligation to standready of $133 million ($145 million—June 30, 2022), and the accumulated provision for guarantee losses of $177
million ($126 million—June 30, 2022). These have been included in Other liabilities on the Condensed Balance
Sheets.
During the nine months ended March 31, 2023 and 2022, no guarantees provided by IDA to sovereign or subsovereign borrowers were called. During the nine months ended March 31, 2023, less than $0.5 million of IDAPSW Blended Finance Facility guarantees under the Small Loan Guarantee Program pursuant to the risk-sharing
agreement between IDA and IFC were called (less than $0.5 million – nine months ended March 31, 2022).

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)41

Subsequent EventIn April 2023, IDA's partial guarantee of certain Eurobonds that had been issued by the Republic of Ghana (Ghana)
was called, and in accordance with the terms of the guarantee, IDA made a payment of $50 million to the guaranteedbondholders. Pursuant to the terms of the related indemnity agreement between IDA and Ghana, Ghana is obligatedto reimburse IDA for the guarantee payment on terms determined by IDA.
Concentration Risk
Loan revenue comprises service charges, interest and commitment charges, net of waivers. For the nine months
ended March 31, 2023, loan revenue of $222 million and $191 million from two countries, both in the South Asia
region, were each in excess of 10% percent of total loan revenue.
The following table presents IDA’s loans outstanding and associated loan revenue by geographic region:
Table D5: Loan revenue and outstanding loan balances by geographic region
In millions of U.S. dollars

RegionSouth Asia
Eastern and Southern Africa
Western and Central Africa
East Asia and Pacific
Europe and Central Asia
Latin America and the Caribbean
Middle East and North Africa
Others a
Total

As of and for the nine months ended March 31,
2023
2022
Loan Revenue b
$
615
370
335
175
105
43
13
5
$
1,661

Loans
Outstanding$
61,621
52,40240,50718,920
8,842
3,403
2,135
75
$
187,905

Loan Revenue b
$
547
332
287
177
86
36
15
1
$
1,481

Loans
Outstanding$
62,40048,72135,71019,914
7,699
3,339
2,343
29
$
180,155

a. Represents loans under the PSW.
b. Excludes $3 million of interest rate swap income related to loan related derivatives for the nine months ended March 31, 2023($2 million of interest rate swap expense - nine months ended March 31, 2022). Includes net commitment charges of $21 million
for the nine months ended March 31, 2023 ($18 million – nine months ended March 31, 2022).

NOTE E—BORROWINGS
IDA’s borrowings comprise market borrowings (carried at amortized cost or fair value) and concessional partner
loans made by IDA members (carried at amortized cost).
IDA uses derivative contracts to manage the currency risk and the interest rate risk in the market borrowings carriedat fair value. For details regarding the derivatives used, see Note F—Derivative Instruments.
As of March 31, 2023, and June 30, 2022, the instruments in IDA’s borrowing portfolio measured at fair value wereclassified as Level 2 within the fair value hierarchy. A summary of IDA’s borrowings are as follows (for details on
principal due upon maturity, see Note J—Fair Value Disclosures):
Table E1: Market borrowings and borrowing-related derivatives, at fair value
In millions of U.S. dollars
Market borrowings
Currency swaps, net
Interest rate swaps, net
Total

42

March 31, 2023
18,068603
2,009$
20,680$June 30, 2022
19,718547
1,586$
21,851$IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)Table E2: Market borrowings outstanding, at amortized cost
In millions of U.S dollars

March 31, 2023
June 30, 2022$$

Principal at face value
8,696
6,240

Net unamortized premium(discount)$(56) $$(39) $

Total
8,640
6,201

Table E3: Concessional partner loans outstanding, at amortized cost
In millions of U.S dollars
March 31, 2023
June 30, 2022$$

Principal at face value
8,901
8,508

$
$

Net unamortized discount(1,563) $(1,528) $

Total
7,338
6,980

NOTE F—DERIVATIVE INSTRUMENTS
IDA uses derivative instruments in its investment, loan and borrowing portfolios, for asset/liability management
purposes, and to assist clients in managing risks.
The following table summarizes IDA’s use of derivatives in its various financial portfolios.
Table F1: Use of derivatives in various financial portfolios
Portfolio
Risk management purposes:
Investments—Trading

Derivative instruments used

Purpose/Risk being managed

Interest rate swaps, currency forward contracts,
currency swaps, options, swaptions, futurescontracts, and to-be-announced (TBA) securities

Manage currency and interest rate risks

Other assets/liabilities
management

Currency forward contracts, currency swaps andinterest rate swaps

Manage currency and interest rate risks

LoansInterest rate swaps

Manage interest rate risk

Interest rate swaps and currency swaps

Manage currency and interest rate risks

Structured swaps

Assist clients in managing risks

Borrowings
Other purposes:
Client operations

The derivatives in the related tables of Note F are presented on a net basis by instrument. A reconciliation to theCondensed Balance Sheet presentation is shown in table F2.
Offsetting assets and liabilities
IDA enters into International Swaps and Derivatives Association, Inc. (ISDA) master netting agreements with
substantially all of its derivative counterparties. These legally enforceable master netting agreements give IDA theright to liquidate securities held as collateral and to offset receivables and payables with the same counterparty, inthe event of default by the counterparty.
The following tables summarize the gross and net derivative positions by instrument type. Instruments that are in a
net asset position are included in the Derivative Assets columns and instruments that are in a net liability position
are included in the Derivative Liabilities columns. The gross columns represent the fair value of the instrument leg
that is in an asset or liability position that are then netted with the other leg of the instrument in the gross offset
columns. The effects of the master netting agreements are applied on an aggregate basis to the total derivative asset
and liability positions and are presented net of any cash collateral received on the Condensed Balance Sheets. The
net derivative asset positions in the tables below have been further reduced by any securities received as collateral todisclose IDA’s net exposure on its derivative asset positions.
IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)43

Table F2: Derivatives assets and liabilities before and after netting adjustments
In millions of U.S. dollars
March 31, 2023
Derivative Assets

Interest rate swaps
Currency swaps a
Total
Less:

Gross
Amounts$
3,488
11,639$15,127Gross
Amounts
Offset$(1,646)(10,908)$ (12,554)

Amounts subject to legally
enforceable master netting
agreements
Cash collateral received
Net derivative positions on
the Balance Sheet
Less:
Securities collateral received

Derivative Liabilities
Net
Amounts
$
1,842
731
$
2,573

Gross
Amounts$
2,669
13,964$
16,633Gross
Amounts
Offset$(658)(13,085)$ (13,743)

Net
Amounts
$
2,011
879
$
2,890

$

1,836 ᵇ473$

1,765 ᶜ

$

264

$

1,125

122

Net derivative exposure after
collateral$

142

Table F2.1:
In millions of U.S. dollars
June 30, 2022
Derivative Assets

Interest rate swaps
Currency swaps a
Total
Less:
Amounts subject to legally
enforceable master netting
agreements
Cash collateral received
Net derivative positions on
the Balance Sheet
Less:
Securities collateral received
Net derivative exposure after
collateral

Gross
Amounts$
3,267
16,624$
19,891Gross
Amounts
Offset$(1,678)(15,355)$ (17,033)

Derivative Liabilities
Net
Amounts
$
1,589
1,269
$
2,858

Gross
Amounts
$
2,321
6,569
$
8,890

Gross
Amounts
Offset$(727)(5,918)$(6,645)$

1,682 ᵇ772$

1,666 ᶜ

$

404

$

579

$

—

$

404

a. Includes currency forward contracts.
b. Includes $107 million Credit Value Adjustment (CVA) ($35 million-June 30, 2022).
c. Includes $36 million Debit Value Adjustment (DVA) ($19 million-June 30, 2022).

44

Net
Amounts
$
1,594
651
$
2,245

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)

The following table provides information about the credit risk exposures at fair value, at the instrument level, of
IDA’s derivative instruments.
Table F3: Credit risk exposure of the derivative instruments
In millions of U.S. dollars
Interest rate swaps
Investments - Trading
Asset/liability management
Borrowings
Other aTotal Exposure

$

$

3
1,735
2
102
1,842

March 31, 2023
Currency swaps (including
currency forward contracts)
$

$

76
655
—
—
731

Total
$

79
2,390
2
102
2,573

$

Table F3.1
In millions of U.S. dollars
Interest rate swaps
Investments - Trading
Asset/liability management
Borrowings
Other aTotal Exposure

$

$

2
1,513
2
72
1,589

June 30, 2022
Currency swaps (including
currency forward contracts)
$

$

306
963
—
—
1,269

Total
$

$

308
2,476
2
72
2,858

a. Includes derivatives related to loans and PSW.

The volume of derivative contracts is measured using the U.S. dollar equivalent notional balance. The notionalbalance represents the face value or reference value on which the calculations of payments on the derivative
instrument are determined. As of March 31, 2023, the notional amounts of IDA's derivative contracts outstanding
were as follows: interest rate swaps $33,768 million ($33,267 million as of June 30, 2022) and currency swaps$26,197 million ($23,120 million as of June 30, 2022). There were no long or short positions of other derivatives asof March 31, 2023 (Nil — June 30, 2022).
Collateral: IDA is not required to post collateral under its derivative agreements as long as it maintains a triple-A
credit rating. The aggregate fair value of all derivative instruments with credit-risk related contingent features thatare in a liability position as of March 31, 2023 is $1,107 million ($586 million —June 30, 2022). As of March 31,
2023, IDA was not required to post any collateral in accordance with the relevant agreements.
If the credit-risk related contingent features underlying these agreements were triggered to the extent that IDA would
be required to post collateral as of March 31, 2023, the amount of collateral that would need to be posted would be$301 million ($41 million—June 30, 2022). Subsequent triggers of contingent features would require posting ofadditional collateral, up to a maximum of $1,107 million as of March 31, 2023 ($586 million—June 30, 2022).

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)

45

The gains or losses on the non-trading derivatives, by instrument type and their location in the Condensed
Statements of Income are as follows:
Table F4: Unrealized mark-to-market gains or losses on non-trading derivatives
In millions of U.S. dollars
Three Months Ended
March 31,
2023
2022

Type of instrument

Reported as

Interest rate swaps

Unrealized mark-to-market
gains (losses) on nontrading portfolios, net

Currency swaps and currency forward contracts
Total

$

177
97
274

$

$

Nine Months Ended
March 31,
2023
2022

(140) $
(175) $
(315) $$

(68) $(72)(140) $

(477)
(240)
(717)

The majority of the instruments in IDA’s investment portfolio are held for trading purposes. Within the trading
portfolio, IDA holds highly rated fixed income instruments as well as derivatives. The trading portfolio is primarily
held to ensure the availability of funds to meet future cash flow requirements and for liquidity management
purposes.
The following table provides information on the amount of gains or losses on IDA’s investment trading portfolio(derivative and non-derivative instruments), and their location on the Condensed Statements of Income:Table F5: Unrealized mark-to-market gains or losses on investment trading portfolio
In millions of U.S. dollars

Type of instrument

Three Months Ended
March 31,
2023
2022

Nine Months Ended
March 31,
2023
2022

$

$

Reported as

Fixed income (including related derivatives)

Unrealized mark-to-market gains(losses) on Investment-Trading
portfolios, net

60

$

(85)

(18)

$

(6)

NOTE G—TRANSACTIONS WITH AFFILIATED ORGANIZATIONSIDA transacts with affiliated organizations as a recipient of transfers and grants, administrative and derivativeintermediation services and through cost sharing of IBRD’s sponsored pension and other postretirement benefit
plans.
Transfers and Grants
Cumulative transfers and grants made to IDA as of March 31, 2023 were $20,593 million ($20,476 million—
June 30, 2022). Details by transferor are as follows:
Table G1: Cumulative transfers and grants
In millions of U.S dollars
Transfers from
Total
Of which transfers from:
IBRD
IFC
Nonaffiliated organizations

46

Beginning of theTransfers during
fiscal year
the period
End of period$
20,476 $117 $20,593
16,361
3,885
230

117
—
—

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)

16,4783,885
230

Receivables and Payables
The total amounts receivable from (payable to) affiliated organizations is comprised of the following:
Table G2: IDA’s receivables and payables with affiliated organizations
In millions of U.S. dollars
March 31, 2023
June 30, 2022
IBRD
IFC
Total
IBRD
IFC
Total
$ (538) $— $ (538) $ (578) $
— $
(578)
540
—
540
404
—
404
688
—
688
602
—
602
—
(45) b
(45)
(8)
(9)
(17)
—
72
72
—
54
54
—
245
245
—
346
346
$ 690 $
272 $
962 $
420 $
391 $
811

Administrative Services
Post-Retirement Contribution Reserve Fund a
Pension and Other Postretirement Benefits
Derivative (liabilities)/assets, net
PSW- Blended Finance Facility c
Investments
Total

a. Receivable from IBRD for IDA's share of investments associated with Post-Retirement Contribution Reserve Fund (PCRF),
which is a fund established to stabilize contributions made to the pension plans.
b. Includes other receivable of $8 million related to unsettled Local Currency Facility trades that is included in Other assets on theCondensed Balance Sheet.
c. Refer to Table G4: Summary of PSW-related transactions.

The receivables from (payables to) these affiliated organizations are reported on the Condensed Balance Sheets asfollows:
Receivables / Payables related to:
Receivable for pension and other postretirement benefits
Receivable for PCRF
Net receivables (payables) for derivative transactions
Payable for administrative services
Receivable for PSW – Blended Finance Facility
Receivable for Investments

Reported as:
Receivable from affiliated organization
Receivable from affiliated organization
Derivative assets/liabilities, net
Payable to affiliated organization
Other Assets
Investments

Administrative Services: The payable to IBRD represents IDA’s share of joint administrative expenses including
contributions to special programs, net of other revenue jointly earned. The allocation of expenses is based upon anagreed cost sharing formula, and amounts are settled quarterly.
For the three and nine months ended March 31, 2023, IDA’s share of joint administrative expenses and contributions
to special programs totaled $415 million and $1,278 million, respectively ($392 million and $1,205 million—threeand nine months ended March 31, 2022, respectively).
Other revenue: Includes IDA’s share of other revenue jointly earned with IBRD during the three and nine months
ended March 31, 2023 totaling $73 million and $201 million, respectively ($69 million and $177 million—three andnine months ended March 31, 2022, respectively).
The amount of fee revenue associated with services provided to other affiliated organizations is included in Other
revenue on the Condensed Statements of Income, as follows:
Table G3: Fee revenue from affiliated organizations
In millions of U.S dollars

Fees charged to IFC
Fees charged to MIGA

Three Months Ended March 31,
2023
2022
$
23 $
23
1
2

Nine Months Ended March 31,
2023
2022
$
67 $
61
4
4

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)47

Pension and Other Post-Retirement Benefits: IBRD, along with IFC and Multilateral Investment Guarantee
Agency (MIGA), sponsors a defined benefit Staff Retirement Plan and Trust, a Retired Staff Benefits Plan and Trustand a Post-Employment Benefits Plan (PEBP) that cover substantially all of their staff members.
While IDA is not a participating entity to these benefit plans, IDA shares in the costs and reimburses IBRD for its
proportionate share of any contributions made to these plans by IBRD based on an agreed cost sharing ratio.
During the three and nine months ended March 31, 2023, IDA’s share of IBRD’s benefit costs relating to all threeplans totaled $40 million and $122 million ($48 million and $146 million—three and nine months ended March 31,
2022, respectively).
The cost of any potential future liability arising from these plans would be shared by IBRD and IDA using theapplicable cost sharing ratio.
The receivable from IBRD represents IDA’s net share of prepaid costs for pension and other postretirement benefit
plans and PEBP assets. These will be realized over the lives of the plan participants.
Derivative transactions: IDA enters into currency forward contracts with IBRD acting as the intermediary with themarket, primarily to convert donors’ expected contributions in national currencies into the five currencies of theSpecial Drawing Rights (SDR) basket.
Investments – Non-trading
During the fiscal year ended June 30, 2015, IDA purchased a debt security issued by IFC for a principal amount of$1,179 million, amortizing over a period of 25 years. The investment carries a fixed interest rate of 1.84% and has aweighted average maturity of 4 years. As of March 31, 2023, the principal amount due on the debt security was $262
million ($358 million—June 30, 2022), with a fair value of $245 million ($346 million—June 30, 2022). The
investment is reported under Investments in the Condensed Balance Sheets. During the three and nine months ended
March 31, 2023, IDA recognized interest income of $1 million and $4 million, respectively, from this investment($2 million and $6 million — three and nine months ended March 31, 2022, respectively).
Private Sector Window (PSW)The PSW was created under the Eighteenth Replenishment of IDA’s Resources (IDA18) to mobilize private sector
investment in IDA-only countries and IDA-eligible Fragile and Conflict-affected Situations. The PSW continued
under IDA’s Twentieth Replenishment of Resources (IDA20), which commenced on July 1, 2022 with an initial
allocation of $2.5 billion. Under the fee arrangement for the PSW, IDA receives fee income for transactions
executed under this window and reimburses IFC and MIGA for the related costs incurred in administering thesetransactions.

48

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)

The following tables provide a summary of all PSW related transactions under which IDA has an exposure as ofMarch 31, 2023:
Table G4: Summary of PSW-related transactions
In millions of U.S. dollars
Facility

Notional

Local Currency Facility $243

Net Asset/(Liability) position$(53)

Location on the Condensed
Balance Sheets
Derivative assets/ liabilities,
net

Description
Currency swaps with IFC to support
local currency denominated loans

In millions of U.S. dollars
Facility

Accumulated
Provision

Exposure

Location on the Condensed
Balance Sheets

Description

MIGA Guarantee
Facility

$

348

$

79

Expanding the coverage of MIGA
Political Risk Insurance products
through shared first-loss or risk
participation similar to reinsurance

Off Balance
Sheet item

Accumulated
Provision
Otherliabilities

Blended Finance
Facility

$

420

$

62

Sharing the coverage of IFC
programs through shared first loss

Off Balance
Sheet item

Otherliabilities

72

Not applicable

Funding for IFC's PSW debt andequity investments recorded at fairvalue

Other assets

Not applicable75

13Concessional senior andsubordinated loans to support
medium term projects

Loansoutstanding

Accumulated
Provision for
Loan Losses

Exposure

NOTE H—DEVELOPMENT GRANTS
A summary of changes to the amounts payable for development grants is presented below:
Table H1: Grants payable
In millions of U.S dollars
Beginning of the fiscal year
Disbursements (including PPA grant activity)aCancellations
Translation adjustment
End of the period/ fiscal year$$

March 31, 2023
4,615
(945)
(86)
41
3,625

$

June 30, 2022
6,820
(1,659)
(149)

$

(397)
4,615

a. Project Preparation Advances (PPA)IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)49

A summary of the development grant expenses is presented below:
Table H2: Grant activity
In millions of U.S dollars

Disbursements for conditional grants a
Disbursements not meeting expense condition b
Cancellations
Grant Expenses for the period$

Grants Approved$$

Three Months Ended March 31,
2023
2022
1,228 $
665 $
(526)
(232)
(30)
(23)
672 $
410 $
778

$

2,650

Nine Months Ended March 31,
2023
2022
4,146 $
2,250
(1,247)
(743)
(86)
(111)
2,813 $
1,396

$

4,828

$

7,332

a. Disbursements of conditional grants approved on or after July 1, 2019.
b. Disbursements of conditional grants for which the expense recognition criteria has not yet been met.

As of March 31, 2023, the cumulative amount of conditional grants approved but not yet expensed since all of theconditions have not been met was $26,578 million. Out of which, the outstanding amount of conditional grant
advances disbursed but not yet expensed, totaling $3,436 million as of March 31, 2023 ($2,189 million – June 30,2022), are included in Other assets on the Condensed Balance Sheets.

NOTE I—ACCUMULATED OTHER COMPREHENSIVE INCOME
Comprehensive income consists of net income (loss) and other gains or losses affecting equity that, under U.S.
GAAP, are excluded from net income (loss). For IDA, other comprehensive income (loss) is comprised of currencytranslation adjustments on functional currencies and DVA on fair value option elected liabilities. These items arepresented in the Condensed Statements of Comprehensive Income.
The following table presents the changes in Accumulated Other Comprehensive (Loss) Income (AOCI) balances.
Table I1: Changes in AOCI
In millions of U.S dollars

Beginning of the fiscal year
Currency translation adjustments on functional currencies
DVA on Fair Value option elected liabilities
End of the period$$

Nine Months Ended March 31,
2023
2022
(9,152) $
1,656
2,014
(4,693)5(1)(7,133) $(3,038)NOTE J— FAIR VALUE DISCLOSURES
Valuation Methods and Assumptions
As of March 31, 2023 and June 30, 2022, IDA had no financial assets or liabilities measured at fair value on a non–recurring basis.
Due from Banks
The carrying amount of unrestricted and restricted cash is considered a reasonable estimate of the fair value of these
positions.
Loans and Loan commitments
There were no loans carried at fair value as of March 31, 2023 and June 30, 2022. IDA’s loans and loan
commitments would be classified as Level 3 within the fair value hierarchy.
Summarized below are the techniques applied in determining the fair values of IDA’s financial instruments.
50

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)Investment securities
Where available, quoted market prices are used to determine the fair value of trading securities. Examples include
most government and agency securities and futures contracts.
For instruments for which market quotations are not available, fair values are determined using model-based
valuation techniques, whether internally-generated or vendor-supplied, that include the standard discounted cash
flow method using observable market inputs such as yield curves, credit spreads, and constant prepayment spreads.
Where applicable, unobservable inputs such as conditional prepayment rates, probability of default, and loss severity
are used.
Unless quoted prices are available, time deposits are reported at face value, which approximates fair value, as they
are short term in nature.
Securities purchased under resale agreements, securities sold under repurchase agreements, and securities lent
under securities lending agreements
These securities are of a short-term nature and are reported at face value, which approximates fair value.
Borrowings
The fair value of IDA’s borrowings carried at fair value is calculated using a discounted cash flow method which
relies on observable market inputs such as yield curves, foreign exchange rates, basis spreads and funding spreads.
As of March 31, 2023 and June 30, 2022, the fair value of borrowings measured at amortized cost would be
calculated using the same methodology as described above for borrowings at fair value and classified as Level 2
within the fair value hierarchy.
Derivative instruments
Derivative contracts include currency forward contracts, TBA securities, swaptions, options and futures contracts,
currency swaps and interest rate swaps.
Where available, quoted market prices are used to determine the fair value of trading securities. Examples include
options and futures contracts.
For instruments for which market quotations are not available, fair values are determined using model-based
valuation techniques, whether internally-generated or vendor-supplied, that include the standard discounted cash
flow method using observable market inputs such as yield curves, foreign exchange rates, credit spreads, basis
spreads, funding spreads and constant prepayment spreads. Where applicable, unobservable inputs such as constantprepayment rates, probability of default, and loss severity are used.
Valuation adjustments on fair value option elected liabilities
The DVA on fair value option elected liabilities (market borrowings carried at fair value) is measured by revaluingeach liability to determine the changes in fair value of that liability arising from changes in IDA’s cost of funding
applicable to the relevant reference rates.

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)

51

The table below presents IDA’s estimates of fair value of its financial assets and liabilities along with theirrespective carrying amounts.
Table J1: Fair value and carrying amounts of financial assets and liabilities
In millions of U.S dollars

AssetsDue from banks
Investments (including securities transferred under
repurchase or securities lending agreements)
Net loans outstanding
Derivative assets, net
Liabilities
Borrowings
Market borrowings, at fair valueMarket borrowings, at amortized value
Concessional partner loans
Securities sold under repurchase agreements, securities
lent under securities lending agreements, and payable
for cash collateral received
Derivative liabilities, net

March 31, 2023
Carrying Value
Fair Value

June 30, 2022
Carrying Value
Fair Value

$

$

813

$

813

686

$

686

36,557
184,074
264

36,557141,159
264

39,827
174,490404

39,827141,193404

18,0688,640
7,338

18,068
6,906
6,954

19,7186,201
6,980

19,718
5,073
7,123

961
1,125

961
1,125

—
579

—
579

As of March 31, 2023, IDA’s signed loan commitments were $66.9 billion ($61.8 billion — June 30, 2022) and hada fair value of $(9.2) billion ($(8.2) billion—June 30, 2022).

52

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)

The following tables present IDA’s fair value hierarchy for assets and liabilities measured at fair value on arecurring basis.
Table J2: Fair value hierarchy of IDA’s assets and liabilities
In millions of U.S. dollars
Fair Value Measurements on a Recurring Basis
As of March 31, 2023
Level 1
Level 2
Level 3
Total
Assets:Investments—Trading
Government and agency obligations
Time deposits
ABS
Total Investments—Trading
Investments—Non-trading (at fair value)
Total Investments
Derivative assets:
Currency swaps and currency forward contracts
Interest rate swaps

$

$

$
$

11,257918—
12,175—
12,175

$

—
—
—

$

$

$

9,409
14,609119
24,137245
24,382

$

731
1,842
2,573

$

$

$

—
—
—
—
—
—

$

—
—
—

$

$

20,666
15,527
119
36,312245
36,557

$

731
1,842
2,573

$

1,836
473
264

Less:
Amounts subject to legally enforceable master netting
agreements a
Cash collateral received
Derivative assets, net
Liabilities:
Market Borrowings, at fair value

$

—

$

18,068$—$18,068

Securities sold under repurchase agreements, securities lent
under securities lending agreements, and payable for cash
collateral received c
$

—

$

961

$

—

$

961

—
—
—

$

879
2,011
2,890

$

—
—
—

$
$

879
2,011
2,890

$

1,765
1,125

Derivative liabilities:
Currency swaps and currency forward contracts
Interest rate swaps

$
$

$

$

Less:
Amounts subject to legally enforceable master netting
agreements b
Derivative liabilities, net
a. Includes $107 million CVA.
b. Includes $36 million DVA.
c. Excludes amount payable for cash collateral received of $473 million.

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)53

Table J2.1
In millions of U.S. dollars
Fair Value Measurements on a Recurring Basis
As of June 30, 2022
Level 1
Level 2
Level 3
Total
Assets:Investments—Trading
Government and agency obligations
Time deposits
ABS
Total Investments—Trading
Investments—Non-trading (at fair value)
Total Investments$$

Derivative assets:
Currency swaps and currency forward contracts
Interest rate swaps

7,699
569
—
8,268
—
8,268

$

—
—
—

$

$
$

$

$

16,203
14,842
168
31,213346
31,559

$

1,269
1,589
2,858

$

$

$

—
—
—
—
—
—

$

—
—
—

$

$

Less:
Amounts subject to legally enforceable master netting
agreements a
Cash collateral received
Derivative assets, net
Liabilities:
Market Borrowings, at fair value
Derivative liabilities:
Currency swaps and currency forward contracts
Interest rate swaps

23,902
15,411
168
39,481
346
39,827

$

1,269
1,589
2,858

$

1,682
772
404

$

—

$

19,718$—$19,718

$

—
—
—

$

651
1,594
2,245

$

—
—
—

$
$

651
1,594
2,245

$

1,666
579

$

$

$

Less:
Amounts subject to legally enforceable master netting
agreements b
Derivative liabilities, net
a. Includes $35 million CVA.
b. Includes $19 million DVA.

Presented below is the difference between the aggregate fair value and aggregate contractual principal balance of
non-trading securities in the investment portfolio:
Table J3: Investment portfolio-Non-trading securities
In millions of U.S dollars
Fair value
March 31, 2023
June 30, 2022

54

$
$

245
346

$
$

Principal amount due
262
358

Difference$$

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)

(17)
(12)

Presented below is the difference between the aggregate fair value and aggregate contractual principal balance ofmarket borrowings:
Table J4: Market Borrowings at fair value and contractual principal balance
In millions of U.S. dollars

March 31, 2023
June 30, 2022$$

Fair Value
18,06819,718Principal Due Upon
Maturity$
20,234$21,506

Difference(2,166)(1,788)$$Valuation adjustments on fair value option elected liabilities
During the nine months ended March 31, 2023, IDA recorded unrealized mark-to-market gains of $5 million ($1million losses – nine months ended March 31, 2022) in Other Comprehensive Income, in relation to the changes in
its own credit (DVA) on fair value option elected liabilities (market borrowings).
IDA’s Condensed Balance Sheets included a DVA of $8 million cumulative loss as of March 31, 2023 ($13 million
cumulative loss—June 30, 2022) in Accumulated other comprehensive income, associated with the changes in
IDA’s own credit for its market borrowings reported at fair value.
The following tables reflect the components of the unrealized mark-to-market gains or losses on IDA’s trading andnon-trading portfolios, net.
Table J5: Unrealized mark-to-market gains (losses) on trading and non-trading portfolios, net
In millions of U.S. dollars

Investments, Trading—Note F
Non-trading portfolios, net
Asset-liability management—Note F
Investment portfolio—Note C
Borrowing portfolio—Note E
Other b
Total

Three Months Ended March 31, 2023
Unrealized
gains(losses)
Realized
Unrealized
excluding
gains
gains
realizeda(losses)amounts(losses)$(218) $
278 $
60

$

—
—
—
—
—

$

28
4
(45)
(14)
(27) $

Nine Months Ended March 31, 2023
Unrealized
gains(losses)
Realized
Unrealized
excluding
gains
gains
realizeda(losses)amounts(losses)$(138) $
120 $
(18)

28
4
(45)
(14)
(27) $

—
—
—
(1)
(1) $

183
(4)
(23)
(8)
148 $

183
(4)
(23)
(9)
147

a. Adjusted to exclude amounts reclassified to realized gains/losses.
b. Other comprise mark-to-market gains or losses on the loan portfolio and on PSW.

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)55

Table J5.1
In millions of U.S. dollars

Investments, Trading—Note F
Non-trading portfolios, net
Asset-liability management—Note F
Investment portfolio—Note C
Borrowing portfolio—Note E
Other b
Total

Three Months Ended March 31, 2022
Nine Months Ended March 31, 2022
Unrealized
Unrealized
gains
gains
(losses)(losses)
Realized
Unrealized
Realized
Unrealized
excludingexcluding
gains
gains
gains
gains
realized
realized(losses)amounts a(losses)(losses)amounts a(losses)$
77 $(162) $
(85) $
250 $(256) $
(6)

$

—
—
—
—
—

$

508
(14)
(2)
33
525 $

508
(14)
(2)
33
525 $

—
—
—
—
—

$

420
(19)
8
29
438 $

420
(19)
8
29
438

a. Adjusted to exclude amounts reclassified to realized gains/losses.
b. Other comprise mark-to-market gains or losses on the loan portfolio and on PSW.

NOTE K—CONTINGENCIES
From time to time, IDA may be named as a defendant or co-defendant in legal actions on different grounds invarious jurisdictions. The outcome of any existing legal action, in which IDA has been named as a defendant or codefendant, as of and for the nine months ended March 31, 2023, is not expected to have a material adverse effect on
IDA's financial position, results of operations or cash flows.

56

IDA Condensed Quarterly Financial Statements: March 31, 2023 (Unaudited)INDEPENDENT AUDITOR'S REVIEW REPORT

57

INDEPENDENT AUDITOR'S REVIEW REPORT58