International Development Association

Management’s Discussion & Analysis
andCondensed Quarterly Financial Statements
September 30, 2022
(Unaudited)I n t e r n a t i o n a l De v e l o p m e n t As s o c i a t i o n ( I D A )M a n a g e m e n t ’ s D i s c u s s i o n a n d An a l y s i s
September 30, 2022
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
7

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

17
17

Section VI: Governance

Senior Management Changes

23

List of Tables, Figures and Box

TablesFigures
Box

24
24
24

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 three-month period ended September 30, 2022 (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. Certain
reclassifications of prior years’ information have been made to conform with the current year’s presentation. For
information relating to IDA’s development operations’ results and corporate performance, refer to the World Bank
Corporate Scorecard and Sustainability Review.

Box 1: Selected Financial Data
In millions of U.S. dollars, except ratios which are in percentages
As of and for the three months
ended September 30,
2022

Lending Highlights (Section IV)

As of and for the fiscal
year ended June 30,

2021

2022

Loans, Grants and Guarantees
Net commitments a
Gross disbursements$a

Net disbursements a

6,326

$

2,630

$

37,727

3,988

3,423

21,214

2,311

1,893

14,477

Balance Sheet (Section IV)
Total assets$

214,935$

221,070$

220,014

Net investment portfolio b

38,97640,40539,561

Net loans outstanding

169,266

176,547

174,490

Borrowing portfolio c

35,74032,20435,032

Total equity

173,326

179,395

178,668

Income Statement (Section IV)
Interest revenue, net of borrowing expenses$

Transfers from affiliated organizations and others

529

$

468

$

1,901

-

-

274

Development grants(1,058)(343)(2,372)

Net (loss) income

(535)

(80)

12

Non-GAAP Measures
Adjusted Net Income (Section IV)
Deployable Strategic Capital Ratio (Section V)

$

87

$

26.1%

33
31.0%

$

260
26.4%

a. Commitments that have been approved by the Executive Directors (referred to as “the Board” in this document) and are net of fullcancellations / 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: September 30, 2022

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 (WBG 1). 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, and 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 achieve improvements in growth, job creation, poverty
reduction, governance, the environment, climate adaptation, mitigation and resilience, human capital, infrastructure,and debt transparency, among others. To meet its development goals, the WBG implements country programs to
improve growth and development outcomes. Further, new and ongoing challenges continue to influence the global
outlook. These include high inflation, the rise in food insecurity, growing inequality, global fragility, the coronavirus
disease (COVID-19) pandemic, the war in Ukraine and other geopolitical events, rising debt, climate change, andmacroeconomic imbalances. In response, IDA, as part of the WBG efforts, continues to work with 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. The activities all remain in compliance with IDA’s existing
financial, operational and risk management policies.
IDA’s Twentieth Replenishment (IDA20) commenced on July 1, 2022, with a financing envelope of $93.0 billion 2over the three-year replenishment period, FY23-FY25. The IDA20 operational and financing framework continues toleverage IDA’s strong equity base to help low-income countries respond to the multiple challenges in a post-COVID19 environment and build a greener, more resilient, and inclusive future.

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.
2
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: September 30, 2022 3

Management’s Discussion and Analysis

Section I: Executive Summary

Summary of Financial Results
Net Loss and Adjusted Net Income

In millions of U.S. dollars

Net Loss: IDA reported net loss of $535 million in FY23 YTD,
compared to a net loss of $80 million for the three-month period
ended September 30, 2021 (FY22 YTD). The increase in net loss
was primarily driven by the increase in development grant expenses,
partially offset by the increase in non-functional currency translation
gains. See Section IV: Financial Results.
Adjusted Net Income: IDA’s adjusted net income was $87 million
in FY23 YTD, compared to $33 million in FY22 YTD. The increase
was primarily due to higher interest revenue on investments andlower provision for losses on loans and other exposures, partially
offset by higher borrowing expenses and higher unrealized mark-tomarket losses on investments. See Section IV: Financial Results.

YTD Adjusted Net Income (Loss)YTD Net Income (Loss)

2,000
1,000
0
(1,000)(2,000)

FY19

FY20

FY21

FY22

FY23

Lending Operations
IDA’s net commitments in FY23 YTD were $6.3 billion, $3.7 billion higher than FY22 YTD. Out of the total net
commitments, $4.2 billion were loan commitments and $2.1 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 forthe approval of IDA19 operations.
IDA’s net loans outstanding decreased by $5.2 billion to $169.3 billion as of September 30, 2022 from $174.5 billion
as of June 30, 2022, primarily due to currency translation losses as the SDR depreciated against the U.S. dollar during
the period. See Section IV: Financial Results.
Development grant expenses were $1.1 billion in FY23 YTD compared to $0.3 billion in FY22 YTD due to anincrease in fast disbursing development policy grants in FY23 YTD.
In billions of U.S. dollars
YTD Net Commitments a
YTD Gross Disbursements
YTD Net Disbursements
10

Net Loans Outstanding
200

10

8

160

6

120

6

80

4

40

2

4
2
0

FY19 FY20 FY21 FY22 FY230YTD Net Grant Commitments
YTD Grant ExpenseYTD Net Grant Disbursements

8

Jun 19 Jun 20 Jun 21 Jun 22 Sep 22

0

FY19 FY20 FY21 FY22 FY23

a. Includes loans, grants, and guarantees.

Net Investment Portfolio

In billions of U.S. dollars

As of September 30, 2022, the net investment portfolio was $39.0
billion, compared with $39.6 billion as of June 30, 2022. See Section
IV: Financial Results. The primary objective of IDA’s investment
strategy is principal protection. As of September 30, 2022, 67% of
IDA’s investment portfolio was held in instruments rated AA or
above (see Table 16).

Net Investment Portfolio
50
40
30
20
10
0

4

IDA Management’s Discussion and Analysis: September 30, 2022

Jun 19 Jun 20 Jun 21 Jun 22 Sep 22

Management’s Discussion and Analysis

Section I: Executive Summary

Borrowing Portfolio

In billions of U.S. dollars

Market borrowings at fair value: As of September 30, 2022, themarket borrowings carried at fair value and the related derivatives
were $21.4 billion, a decrease of $0.5 billion from June 30, 2022. See
Section IV: Financial Results.
Market borrowings at amortized cost: As of September 30, 2022,
the market borrowings carried at amortized cost were $7.7 billion, an
increase of $1.5 billion from June 30, 2022.

Borrowing portfolio
50
40
30
20
10
0

Concessional Partner Loans at amortized cost: As of September
30, 2022, total borrowings from members - Concessional Partner
Loans (CPL) were $6.6 billion, a decrease of $0.4 billion from June30, 2022.

Equity and Capital AdequacyJun 19 Jun 20 Jun 21 Jun 22 Sep 22

In billions of U.S. dollars

As of September 30, 2022, IDA’s equity was $173.3 billion, adecrease of $5.3 billion from June 30, 2022. The decrease wasprimarily due to currency translation losses consistent with thedepreciation of the SDR against the U.S. dollar. See Section IV:
Financial Results.

Equity
200
150
100
50
0

The Deployable Strategic Capital (DSC) ratio, IDA’s main capital
adequacy measure, was 26.1% as of September 30, 2022, above thezero percent policy minimum and a decrease of 0.3 percentage points
from 26.4% as of June 30, 2022. IDA’s capital continues to beadequate to support its operations. See Section V: Risk Management.

Jun 19 Jun 20 Jun 21 Jun 22 Sep 22

Ratio in percentages
Deployable Strategic Capital Ratio
45%
30%
15%
0%

Policy Minimum Ratio= 0%
Jun 19 Jun 20 Jun 21 Jun 22 Sep 22

IDA Management’s Discussion and Analysis: September 30, 2022 5

Management’s Discussion and Analysis

Section II: Overview

Section II: Overview
Generally, every three years, representatives of IDA’s members 3 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 that are
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)
IDA20 recognizes the need to help address the profound challenges faced by IDA countries. While the IDA20
operational and financial framework was agreed in December 2021 before the global economic events wereexacerbated by the war in Ukraine, the scale and timing of IDA20 allow IDA to support IDA countries facing themultiple overlapping crises currently unfolding in a financially sustainable manner. IDA20 reaffirms the international
community’s commitment to scale up support to enable IDA countries to respond to the effects of the COVID-19
crisis, recoup their development losses, and resume progress toward the 2030 Sustainable Development goals. IDA20
supports the world’s poorest and 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 thecontinuation of climate change, fragility, conflict, and violence (FCV), gender and development, jobs, and economictransformation and the introduction 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), and technology. For the three-year funding cycle of IDA20 (FY23-FY25), the agreed
resource envelope totals $93 billion including $11 billion of IDA19 carry-over, supported by $23.5 billion of member
contributions. The remainder of the financing envelope will be covered by the Multilateral Debt Relief Initiative(MDRI), financing raised in the capital markets, internal resources (e.g., loan repayments) and transfers from IBRD.

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 $173.3 billion as of September 30, 2022. 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.
Non-concessional lending is financed by market debt. Concessional lending, including grants, is primarily financed
by IDA’s equity. As IDA’s funding program expands under the hybrid financing model, a larger portion ofconcessional lending will be funded 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.

GrantsEquityConcessional Lending and Investments
Borrowings

Non – Concessional Lending

Reflows and Operating
Results

Figure 1: IDA's Financial Business Model

3 IDA’s members are owners and hold voting rights in IDA. Members do not, however, hold shares in IDA and are therefore not referred

to as shareholders. Payments for subscriptions and contributions from members increase IDA’s paid-in equity and are financiallyequivalent to paid-in capital in multilateral development organizations that issue shares.

6

IDA Management’s Discussion and Analysis: September 30, 2022

Management’s Discussion and Analysis

Section II: Overview

Basis of Reporting
IDA prepares its financial statements in conformity with accounting principles generally accepted in the United Statesof America (U.S. GAAP). IDA’s reporting currency is the U.S. dollar. IDA’s functional currencies are the SDR 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.

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 theadjustments, see IDA’s MD&A for the fiscal year ended June 30, 2022, Section IV: Financial Results.

IDA Management’s Discussion and Analysis: September 30, 2022 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 outlook of
IDA’s financial sustainability. This takes into account the amount of member contributions and the concessionality ofthe 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 with high risk of debt distress, or in debt distress, will receive their
IDA assistance in grants. In addition, IDA-only Small States at moderate risk of debt distress will receive half of their
IDA20 allocation in grants. Gap and Blend countries are only eligible for grant financing via 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. Concessional Shorter-Maturity Loans (SMLs) are offered through the ScaleUp Window (SUW) and country allocations based on the PBA system. Additionally, 50-year loans are available for
IDA-only countries at moderate risk of debt distress in lieu of the previous financing terms of half grants and halfloans, with an exception for Small States.

8

IDA Management’s Discussion and Analysis: September 30, 2022

Management’s Discussion and Analysis

Section III: IDA’s Financial Resources

Table 1: Cumulative Net Commitments
In millions of U.S. dollars

Loans andGuarantees

As of September 30, 2022
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

$

2,613

Grants
$

1,771

$

100
8
97
200
3,018

IDA19 Commitments approved in July 2022
IDA Country Allocations$

Total Cumulative Net Commitments a

$

Total
$

4,384

$

230
7
100
2,108

$

330
15
100
97
200
5,126

1,200

$

-

$

1,200

4,218

$

2,108

$

6,326

a. Commitments are net of full cancellations/terminations approved in the same fiscal year. Commitments exclude IDA-IFC-MIGA
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 IDAonly countries and IDA-eligible Fragile and Conflict-affected Situations. Under IDA20, $2.5 billion has been allocatedto PSW.
As of September 30, 2022, $991 million had been utilized out of a combined total of $2.9 billion committed in IDA18
through IDA20. See Notes to the Condensed Quarterly Financial Statements for the period ended September 30, 2022,
Note G – Transactions with Affiliated Organizations – Table G4.
Table 2: Utilization of PSW Commitments
In millions of U.S. dollars
As of September 30, 2022
Allocation
Net Commitments
Of which utilized
Guarantees
Derivatives
Funding of IFC's PSW-related
equity investments
Loans
Total utilization of IDA PSW

IDA18 andIDA 19
$
2,950
2,947

IDA20
$

2,500
-

Total

Utilization measure

$

5,450
2,947

$

643
231

Face value of outstanding guarantees
Notional amount

61
56
991

Initial value of investment
Amortized cost$

IDA Management’s Discussion and Analysis: September 30, 2022 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 $535 million in FY23 YTD compared with a net loss of $80 million in FY22 YTD (See Table3). The increase in net loss was primarily driven by:••

An increase of $715 million in development grant expenses partly due to an increase in fast disbursing
development policy grants, partially offset by
An increase of $311 million in non-functional currency translation adjustment gains as the depreciation of the
majority of the non-functional currencies against the U.S. dollar was greater in FY23 YTD than in FY22 YTD.

Adjusted Net Income
IDA’s adjusted net income was $87 million in FY23 YTD compared with $33 million in FY22 YTD (See Table 3).
The increase was primarily driven by:•••

An increase of $124 million in net interest revenue on investments due to higher interest rates in FY23 YTD;
A decrease of $48 million in provision for losses on loans mainly due to changes in exposure, partially offset by
An increase of $102 million of borrowing expenses, excluding amortization of discount on CPL, as a result of thehigher average balance of debt and the increase in interest rates.

Table 3: Condensed Statements of Income
In millions of U.S. dollars
For the three months ended September 30,

2022

Interest revenue
Loans, net$
516 $Investments, net
157
Asset-liability management derivatives, net
2
Borrowing expenses, net(146)
Interest revenue, net of borrowing expenses$
529 $Provision for losses on loans and other exposures(52)
Other revenue (expenses), net (Table 13)
12
Net non-interest expenses (Table 12)(365)
Non-functional currency translation adjustment gains, net
479
Unrealized mark-to-market (losses) gains on investments-trading portfolio, net a(107)
Unrealized mark-to-market gains on non-trading portfolios, net
27
Development grants(1,058)Net Loss$ (535) $Adjustments to reconcile net (loss) income to adjusted net income:Expenses relating to development financing activities directly funded by contributions
from members
1,078
Non-functional currency translation adjustment gains, net(479)
Unrealized mark-to-market losses (gains) on non-trading portfolios, net b
14
Pension and other adjustments
9
Adjusted Net Income
$
87 $

2021

Negative
ImpactPositive
Impact

481
33
(46)
468
(100)
(5)
(345)
168
15
62
(343)
(80)

379
(168)
(64)
(34)
33

a. Includes IDA’s share of returns from Post-Employment Benefit Plan (PEBP) and Post-Retirement Contribution Reserve Fund(PCRF) assets – $36 million negative return (FY22 YTD– $17 million positive return).
b. Excludes $41 million of gains from revenue-related forward currency contracts (FY22 YTD - $2 million of losses).

10

IDA Management’s Discussion and Analysis: September 30, 2022

Management’s Discussion and Analysis

Section IV: Financial Results

As of September 30, 2022, total assets decreased compared to June 30, 2022. The decrease was primarily driven by
the decrease in net loans outstanding due to currency translation losses in FY23 YTD.
Table 4: Condensed Balance Sheets
In millions of U.S. dollars
As ofAssetsDue from banks
Investments
Net loans outstanding a
Derivative assets, net
Other assets
Total assets
Liabilities
Borrowings
Derivative liabilities, net
Other liabilities
EquityTotal liabilities and equity

September 30, 2022
$

$

$

$

June 30, 2022

617
39,779169,266353
4,920
214,935$

32,579948
8,082
173,326
214,935$$$

Decrease

Increase
(69)
(48)

686
39,827
174,490404
4,607
220,014(5,224)(51)313(5,079)(320)

32,899579
7,868
178,668
220,014369
214(5,342)(5,079)a. The fair value of net loans outstanding was $129,417 million as of September 30, 2022 ($141,193 million – June 30, 2022).

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
Change during the period:
Subscriptions and contributions paid-in a
Nonnegotiable, noninterest-bearing demand obligations
Change in Accumulated deficit
Change in Accumulated other comprehensive (loss) income
Change in Deferred amounts to maintain value of currency holdings
Total change
Equity as of September 30, 2022a.

$

178,668

$
$

(395)
1,010
(535)
(5,419)(3)(5,342)
173,326

Includes $621 million of translation adjustment losses (See Notes to the Condensed Quarterly Financial Statements, Note B –Members’ Subscriptions and Contributions).

Results from Lending Activities
Loan Portfolio and Grant Activity
As of September 30, 2022, the net loans outstanding were $169.3 billion, $5.2 billion lower compared with June 30,
2022. The decrease was mainly due to currency translation losses of $6.2 billion, consistent with the 3.6% depreciationof the SDR against the U.S. dollar during the period, partially offset by $0.9 billion in net loan disbursements.
As of September 30, 2022, 87% of IDA’s total loans outstanding were denominated in SDR. For the regionalpresentation of total loans outstanding, see Notes to the Condensed Quarterly Financial Statements for the period
ended September 30, 2022, Note D – Loans and Other Exposures – Table D5.
Provision for losses on loans and other exposures
In FY23 YTD, IDA recorded a $52 million provision for losses on loans and other exposures compared to $100 million
in FY22 YTD. The decrease in provision was primarily due to lower exposure in FY23 YTD compared to FY22 YTD.
See Table 6. For adjusted net income purposes, the provision for losses on loans and other exposures excludes theprovision for debt relief under Heavily Indebted Poor Countries (HIPC) / Multilateral Debt Relief Initiative (MDRI)
and the provision for grant advances as these are funded by contributions from members.

IDA Management’s Discussion and Analysis: September 30, 2022 11

Section IV: Financial Results

Management’s Discussion and Analysis

Table 6: Provision for losses on loans and other exposures
In millions of U.S. dollars
For the three months ended September 30,

2022

Provision for losses on loans and other exposures - GAAP basis (Table 3)
Adjustments to arrive at provision for losses on loans and other exposures Adjusted net income basis:
Provision for debt relief under HIPC/MDRI, release
Provision for grant advances, release
Provision for losses on loans and other exposures - Adjusted Net Income
basis

Table 7: Net Loans Outstanding activity

$

2021

(52)

$

(100)

(1)
$

Variance
$

48

(1)
-

(53)

$

(101)

1
(1)
$

48

Figure 2: Net Loans Outstanding

In millions of U.S. dollars
Net Loans outstanding as of June 30, 2022

In billions of U.S. dollars

Change during the period:
Gross loan disbursements
Loan repayments
Change in accumulated provision for loan losses a
Translation adjustments
Other b
Total change
Net Loans outstanding as of September 30, 2022$

174,490$$

2,553(1,677)111(6,204)(7)(5,224)
169,266

a. Includes translation adjustment. See Notes to the Condensed
Quarterly Financial Statements, Note D – Loans and Other Exposures.
b. Represents deferred loan income of $3 million, and HIPC debt relief
provided of $10 million.

200

177.8

174.5

169.3

Jun 21

Jun 22

Sep 22

150
100
50
0

During FY23 YTD, net loan commitments were higher by $2.7 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 Investment Project Financing (IPF) and Program-for-Results (PforR) commitments.
Table 8: Net Commitments of Loans and Guarantees by Region
In millions of U.S. dollars
For the three months ended September 30,
Eastern and Southern Africa
Western and Central Africa
East Asia and Pacific
Europe and Central Asia
Latin America and the Caribbean
South Asia
Total

2022
$

$

1,335
1,998
30
51
804
4,218

% of total
32 %
47
1
1
19
100 %

2021
$

30
1,219
25
56
4
200
1,534

$

% of total
2%
79
2
4
*
13
100 %

Variance
$

$

1,305
779
(25)
(26)
47
604
2,684

* Indicates percentage less than 0.5%.
Table 9: Net Commitments of Grants by Region
In millions of U.S. dollars
For the three months ended September 30,
Eastern and Southern Africa
Western and Central Africa
East Asia and Pacific
Latin America and the Caribbean
Middle East and North Africa
South Asia
Total

2022
$

$

1,728
225
150
5
2,108

% of total
82 %
11
7
*
100 %

2021
$

$

318
667
36
75
1,096

* Indicates percentage less than 0.5%.

12

IDA Management’s Discussion and Analysis: September 30, 2022

% of total
29 %
61
3
7
100 %

Variance
$

$

1,410
(442)
(36)
(75)
150
5
1,012

Section IV: Financial Results

Management’s Discussion and Analysis

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 10).
Gross disbursements were 17% higher in FY23 YTD compared with the same period in FY22. IPF, PforR and DPF
disbursements all contributed to this increase.
Table 10: Gross Disbursements of Loans and Grants by Region
In millions of U.S. dollars
For the three months ended September 30,
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

2022
Grants b

Loans a
$

$

718 $
559
221
247
47
7
748
2,547 $

812 $
366
46
25
11
129
52
1,441 $

Total
1,530
925
267
272
58
136
800
3,988

2021
Grants b

Loans a
$

$

685 $
546
287
55
113
6
800
2,492 $

344 $
192
13
33
49
130
170
931 $

Total
1,029
738
300
88
162
136
970
3,423

Variance
$

$

501
187
(33)
184
(104)
(170)
565

a. Excludes PSW related disbursements - $6 million (FY22 YTD - $1 million).
b. Excludes Project Preparation Advances (PPA).

As of September 30, 2022, 59% of loans outstanding were on regular terms (75 basis points SDR equivalent service
charge) see Table 11. 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 higher averagebalances of loans outstanding in FY23 YTD compared to FY22 YTD.
Table 11: Revenue and Loan Balances by Product Category
In millions of U.S. dollars

Category
Loans
Concessional
Regular
Blend
Hard b
Non-concessional c
Others d
Total

Interest revenue on loans a
For the three months ended
September 30,
2022
2021

Balance as of September 30,
2022
2021

$

$

101,235
63,634
1,263
6,565
56
172,753$$

108,692
64,634
1,383
5,516
10
180,235

$

$

200
254
12
50
1
517

$

$

208
236
12
26
*
482

a. Excludes interest rate swap expenses related to loan hedges - $1 million in FY23 YTD ($1 million - FY22 YTD).
b. Prior to July 1, 2017, IDA offered Hard-Term loans to Blend Countries (excluding Small Island Economies). Hard-term loans are nolonger offered.
c. In addition, $7 million of commitment charges were earned in FY23 YTD on undisbursed balances of non-concessional loans ($6million in FY22 YTD).
d. Represents loans under the PSW.
* Indicates amount less than $0.5 million.

Results from Investing Activities
Investment Portfolio
IDA’s net investment portfolio decreased to $39.0 billion as of September 30, 2022 from $39.6 billion as of June 30,
2022. The decrease was primarily due to currency translation adjustment losses.

IDA Management’s Discussion and Analysis: September 30, 2022 13

Management’s Discussion and Analysis

Section IV: Financial Results

Investment interest revenue, net of derivatives
During FY23 YTD, IDA’s net investment interest revenue was $157 million, an increase of $124 million comparedwith the same period in FY22. The increase in interest revenue was mainly driven by the higher interest rateenvironment in the current period.
Figure 3: Net Investment Portfolio

Figure 4: Net Investment Revenue - YTD

In billions of U.S. dollars

In millions of U.S. dollars

50
40

39.6

37.9

39.0

250
200

30

150

20

100

10

50

0

Jun 21

Jun 22

Sep 22

0

FY19

FY20

FY21

FY22

FY23

Results from Borrowing Activities
As of September 30, 2022, the market borrowing portfolio recorded at fair value was $21.4 billion, a decrease of $0.5
billion compared to June 30, 2022 ($21.9 billion). The decrease was mainly due to the translation gains arising fromthe depreciation of most major currencies against the U.S. dollar. See Notes to the Condensed Quarterly Financial
Statements for the period ended September 30, 2022, Note E – Borrowings.
As of September 30, 2022, the market borrowings at amortized cost were $7.7 billion, an increase of $1.5 billion from
June 30, 2022 ($6.2 billion). The increase was due to issuances of new long-term fixed rate market debt during theperiod. See Notes to the Condensed Quarterly Financial Statements for the period ended September 30, 2022, Note E– Borrowings.
Concessional partner loans from members, recorded at amortized cost, were $6.6 billion as of September 30, 2022($7.0 billion - June 30, 2022). The decrease was mainly due to translation adjustment gains.
Figure 5: Borrowing Portfolio
In billions of U.S. dollars
5040Concessional partner loans, at amortized costMarket borrowings, at amortized costMarket borrowings, at fair value
7.0

6.6

7.7

6.2

7.7

20.6

21.9

21.4

Jun 21

Jun 22

Sep 2230
20
10
0Transfers 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 12, 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 that

14

IDA Management’s Discussion and Analysis: September 30, 2022

Management’s Discussion and Analysis

Section IV: Financial Results

funds the combined work programs of IBRD and IDA. 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 GAAP basis and on an adjusted
net income basis, was primarily driven by higher staff costs and higher travel expenses due to the continued easing of
COVID-19 related travel restrictions and office closures.
Table 12: Net Non-Interest Expenses
In millions of U.S. dollars
For the three months ended September 30,

2022

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

$

$

302
20
83
41
23
33
29
531

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

$
$

(110)
(56)
(166)
365

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

$

27
392

2021

Variance
$

$

286
7
82
48
19
36
16
494

$

$

16
13
1
(7)
4
(3)
13
37

$
$

(102)
(47)
(149)
345

$
$

(8)
(9)
(17)
20

$

17
362

$

10
30

a. 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.

IDA’s net other revenue increased by $17 million in FY23 YTD compared to FY22 YTD as the PPA grant expenses,
net of cancellations and refinancing of PPA grants previously approved, were lower in the current year compared tothe same period in the previous year. Refinanced PPA grants are included in the loan provided to the borrower, andcorrespondingly, prior grant expenses are reversed.
Table 13: Other Revenue (Expenses), net
In millions of U.S. dollars
For the three months ended September 30,
PPA grants and others
Guarantee fees
Commitment charges
Other Revenue (Expenses), net (Table 3)

2022
$

$

(1)
6
7
12

$

$

2021

Variance

(15)
4
6
(5)

$

$

14
2
1
17

Unrealized mark-to-market gains (losses) on investments-trading portfolio, net
During FY23 YTD, IDA’s investments-trading portfolio, excluding the returns from PEBP, had unrealized mark-tomarket losses of $71 million, compared to $2 million of unrealized mark-to-market losses in FY22 YTD. The higher
losses were primarily driven by the increase in EUR denominated bond yields.

IDA Management’s Discussion and Analysis: September 30, 2022 15

Management’s Discussion and Analysis

Section IV: Financial Results

Unrealized mark-to-market gains (losses) on non-trading portfolios, net
During FY23 YTD, the non-trading portfolios had $27 million of net unrealized mark-to-market gains ($62 millionof net unrealized mark-to-market gains in FY22 YTD). In FY23 YTD, the unrealized mark-to-market gains werelower due to the unrealized mark-to-market losses from the currency forward contracts. This was partially offset by
an increase in unrealized mark-to-market gains from the derivatives held for the Capital Value Protection Program(CVP), managed as part of ALM, due to the increase in U.S. dollar and EUR interest rates for long tenors. (Section
V: Risk Management).
Table 14: Unrealized Mark-to-Market gains (losses) on non-trading portfolios, net
In millions of U.S. dollars
For the three months ended September 30,
Asset-liability management
Investment portfolio
Other a
Total

$

$

2022
27
(8)
8
27

$

$

2021
58
(2)
6
62

$

$

Variance
(31)
(6)
2
(35)

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

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 other assets
and liabilities held on IDA’s Balance Sheet, that are denominated in currencies other than the SDR and its component
currencies. The translation adjustment gains and losses 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 appreciation or depreciation of these currencies against the U.S.
dollar results in exchange rate losses or gains which are recorded in the income statement. Accordingly, the translation
adjustment gains on non-functional currencies were $479 million in FY23 YTD, as compared to translation adjustment
gains of $168 million in FY22 YTD. The increase in translation gains in FY23 YTD was driven by the depreciationof the major non-functional currencies against the U.S. dollar which was more prominent compared to FY22 YTD.

16

IDA Management’s Discussion and Analysis: September 30, 2022

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 Audit Committee members,
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 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 topeople, 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 fraudand corruption risks may impact IDA-financed projects, OPCS, the Regions and Practice Groups, and the 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 for its financial activities, which includelending, borrowing, and investing. The primary financial risk to IDA is the country credit risk inherent in its loan andguarantee portfolio. IDA is also exposed to risks in its liquid asset and derivative portfolios, where the major risks areinterest 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 acrossbusiness units.

Geopolitical events and Global Outlook
In response to geopolitical events and other ongoing challenges to the global outlook, including high inflation, the risein food insecurity, growing inequality, global fragility, COVID-19 pandemic, the war in Ukraine, rising debt, climatechange and macroeconomic imbalances, IDA continues to support its client needs in a financially sustainable manner.
As of September 30, 2022, 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 the necessary
liquidity resources. Management remains vigilant in assessing funding needs in the medium and longer-term tomanage 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 15).
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. Developmentsin the market continue to be closely monitored and managed.
IDA continues to monitor associated risks and will mitigate its exposures and risks in line with the existing risk
governance framework.

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 the DSC,
a non-GAAP measure, which is the capital available to support future commitments, over and above the current
portfolio. IDA is required, by the Board, to keep the DSC at levels greater than or equal to zero percent. The DSC is

IDA Management’s Discussion and Analysis: September 30, 2022 17

Management’s Discussion and Analysis

Section V: Risk Management

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 for loan losses andother 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’s concessional loan portfolio
in present value terms using market interest rates. This allowance is calculated using a stressed interest rate to accountfor a potential future rise in market interest rates. In addition, TRR includes capital requirements to account fordevelopment 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 September 30, 2022, the DSC was 26.1%, lower by 0.3 percentage points compared with June 30, 2022 (26.4%).
The decrease in the ratio was mainly due to the decrease in TRA exceeding the decrease in TRR. The decrease in TRA
was primarily driven by the decline in equity as a result of the currency translation adjustment losses as the SDR
depreciated against the U.S. dollar during the period. See Table 15.
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 and liquidity
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 15: 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$$

September 30, 2022
178.0
113.7
17.8
46.5
26.1%

June 30, 2022
183.5
116.7
18.4
$
48.4
26.4%
$

$

$

Variance
(5.5)
(3.0)
(0.6)
(1.9)
(0.3%)

Asset - Liability Management (ALM)In FY22, IDA implemented an interim ALM policy which, under specific criteria, allows funding fixed rate loans withlong-term fixed rate market debt and CPLs (both reported at amortized cost), as part of IDA’s interest rate risk
management to align the interest rate and maturities of the debt with those of the loan portfolio. For more details, seeNotes to the Condensed Quarterly Financial Statements for the period ended September 30, 2022, 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 theCondensed Quarterly Financial Statements for the period ended September 30, 2022, 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.
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.

18

IDA Management’s Discussion and Analysis: September 30, 2022

Section V: Risk Management

Management’s Discussion and Analysis

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 September 30, 2022, the ten countries with the highest exposures accounted for 66% of IDA’s total exposure(Figure 6). Monitoring these exposures relative to the SBL requires consideration of the repayment profiles of existingloans, as well as disbursement profiles and projected new loans and guarantees.
Figure 6: Country Exposures as of September 30, 2022
In billions of U.S. dollars

Top Ten Country Exposures
India
Bangladesh
Pakistan
Nigeria
Vietnam
Ethiopia
Kenya
Tanzania
Ghana
Uganda

18.8
17.4
15.5
12.6
12.4
10.7
10.2
8.3
5.5
4.3
0

2

4

6

8

10

12

14

16

18

20

22

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 September 30, 2022, one IDA borrowing country in the accrual portfolio had overdue payments beyond
90 days totaling $3 million.
As an exception to the practices set forth for treatment of overdue payments, IDA has provided financing to countries
with overdue payments in specific situations. For further details, refer to IDA’s MD&A for the fiscal year ended June30, 2022, Section IX: Risk Management.
Accumulated Provision for Losses on Loans and Other Exposures
As of September 30, 2022, IDA had $172.8 billion of loans outstanding, of which loans in nonaccrual status represent
0.5%. IDA’s total provision for losses on loans and other exposures was $4.7 billion, which represents a provisioning
rate of 1.9% of the underlying exposures as of September 30, 2022 ($4.8 billion as of June 30, 2022, 1.9% of theunderlying exposure). See Notes to the Condensed Quarterly Financial Statements for the period ended September 30,
2022, 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 management ofthese 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 16).

IDA Management’s Discussion and Analysis: September 30, 2022 19

Section V: Risk Management

Management’s Discussion and Analysis

As shown in Table 16, as of September 30, 2022, 67% of IDA’s investment portfolio is rated AA or above, and theremainder is predominantly rated A, reflecting IDA’s continued preference for highly-rated securities andcounterparties across all categories of financial instruments.
Total commercial counterparty credit exposure, net of collateral held, was $40.3 billion as of September 30, 2022. 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 September 30, 2022, Note F: Derivative Instruments.
Table 16: Commercial Credit Exposure, Net of Collateral Held, by Counterparty Rating
In millions of U.S. dollars, except rates in percentages
Counterparty Rating

As of September 30, 2022
NonNet Swap
Sovereigns
Exposure

SovereignsaTotal Exposure% of Total

AAA
AA
A

$

8,454
2,207
6,340

$

3,262
12,833
6,735

$

163
310

$

11,716
15,203
13,385

29 %
38
33

Total

$

17,001$

22,830$473$

40,304100 %Counterparty Rating
AAA
AA
A
Total

Sovereigns

a

$

$

10,5672,226
4,256
17,049$$As of June 30, 2022
NonNet Swap
Sovereigns
Exposure
5,038 $
- $11,949
155
5,901
284
22,888 $439 $Total Exposure% of Total

15,605
14,33010,44140,376

39 %
35
26
100 %

a. Average rating is calculated using available ratings for the three major rating agencies; however, if ratings are not available fromeach 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 tofund fixed rate loans. 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
profile, the duration of IDA’s loans is relatively long (11 years). This long duration, combined with volatility in market
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 witha duration of three months as of September 30, 2022.
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 Rates
In FY2021, 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, would cease to
be provided by any administrator or were no longer representative. FCA also announced that USD LIBOR rates will
no longer be available after June 30, 2023.

20

IDA Management’s Discussion and Analysis: September 30, 2022

Management’s Discussion and Analysis

Section V: Risk Management

In consideration of the regulatory guidance and in preparation for the global markets’ transition away from LIBOR,IDA took the necessary steps to facilitate a smooth and orderly transition of its financial instruments to alternativereference rates. This transition started on January 1, 2022. Effective this date, IDA started offering new nonconcessional loans with alternative reference rates and ceased to offer LIBOR based loans. The remaining loans, which
are USD fixed spread loans, will be transitioning beginning in July 2023, as the loans reset.
Out of the total loans outstanding as of September 30, 2022, less than 1% have transitioned and less than 2% are still
subject to transition to alternative reference rates. The remaining 98% are not subject to transition to alternativereference rates as they are on fixed-rate terms.
As of September 30, 2022, IDA’s borrowing portfolio before associated derivatives carries only fixed interest rates
and is not subject to transition to alternative reference rates.
Out of the total derivative portfolio notional as of September 30, 2022, approximately 4% have transitioned and 32%
are subject to transition to alternative reference rates. The remaining 64% of the total derivative portfolio notional are
not subject to transition to alternative reference rates. For the vast majority of the derivative portfolio subject totransition, IDA either has sufficient provisions in the derivative agreements with 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 to alternative 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 to which
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,
appreciation (depreciation) of the non-SDR currencies against the U.S. dollar results in exchange rate losses (gains),
which are reported in the Statement of Income. The translation adjustment on future inflows from members, eventhough they are not recorded in the balance sheet, is the economic offset to the translation adjustment on non-functional
currencies of currency forward contracts.
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 September 30, 2022, IDA’s liquid assets were $38.7 billion,
186% 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 physical security

IDA Management’s Discussion and Analysis: September 30, 2022 21

Management’s Discussion and Analysis

Section V: Risk Management

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 affectbusiness units and developing risk response and mitigating actions.

22

IDA Management’s Discussion and Analysis: September 30, 2022

Management’s Discussion and Analysis

Section VI: Governance

Section VI: Governance
Senior Management Changes
There were no senior management changes during the first three months of FY23.

IDA Management’s Discussion and Analysis: September 30, 2022 23

Management’s Discussion and Analysis

List of Tables, Figures and Box

List of Tables, Figures and Box
TablesTable 1: Cumulative Net Commitments
Table 2: Utilization of PSW Commitments
Table 3: Condensed Statements of Income
Table 4: Condensed Balance Sheets
Table 5: Changes in Equity
Table 6: Provision for losses on loans and other exposures
Table 7: Net Loans Outstanding activity
Table 8: Net Commitments of Loans and Guarantees by Region
Table 9: Net Commitments of Grants by Region
Table 10: Gross Disbursements of Loans and Grants by Region
Table 11: Revenue and Loan Balances by Product Category
Table 12: Net Non-Interest Expenses
Table 13: Other Revenue (Expenses), net
Table 14: Unrealized Mark-to-Market gains (losses) on non-trading portfolios, net
Table 15: Deployable Strategic Capital Ratio
Table 16: Commercial Credit Exposure, Net of Collateral Held, by Counterparty Rating

9
9
10
11
11
12
12
12
12
13
13
15
15
16
18
20

FiguresFigure 1: IDA's Financial Business Model
Figure 2: Net Loans Outstanding
Figure 3: Net Investment Portfolio
Figure 4: Net Investment Revenue - YTD
Figure 5: Borrowing Portfolio
Figure 6: Country Exposures as of September 30, 2022

6
12
14
14
14
19

Box
Box 1: Selected Financial Data

24

IDA Management’s Discussion and Analysis: September 30, 2022

2

INTERNATIONAL DEVELOPMENT ASSOCIATION (IDA)
CONTENTS

September 30, 2022

CONDENSED QUARTERLY FINANCIAL STATEMENTS (UNAUDITED)CONDENSED BALANCE SHEETS

26

CONDENSED STATEMENTS OF INCOME

28

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

29

CONDENSED STATEMENTS OF CHANGES IN ACCUMULATED DEFICIT

29

CONDENSED STATEMENTS OF CASH FLOWS

30

NOTES TO CONDENSED QUARTERLY FINANCIAL STATEMENTS

31

INDEPENDENT AUDITORS’ REVIEW REPORT52

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)25

CONDENSED BALANCE SHEETS
Expressed in millions of U.S. dollars
September 30, 2022
(Unaudited)
AssetsDue from banks—Notes C and J
Unrestricted cash
Restricted cash$

Investments (including securities transferred under repurchase or
securities lending agreements of Nil—September 30, 2022; Nil—June
30, 2022) —Notes C, G and J
Derivative assets, net—Notes C, F, G and J
Receivable from affiliated organization—Note G

594
23

June 30, 2022
(Unaudited)

$

662
24

617

686

39,77939,827

353

404

1,017

1,006

243,554

250,300(70,801)
172,753(3,472)(15)
169,266(72,209)
178,091(3,583)(18)
174,490

3,903

3,601

Loans outstanding—Notes D, G and J
Total loans approved
Less: Undisbursed balance (including signed loan commitments of$61,234 million—September 30, 2022; $61,812 million—June
30, 2022)
Loans outstanding
Less: Accumulated provision for loan losses
Deferred loan income
Net loans outstanding
Other assets—Notes C, D, G and H
Total assets

26$

214,935

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)$

220,014

September 30, 2022
(Unaudited)
Liabilities
Borrowings—Notes E and J
Market borrowings, at fair valueMarket borrowings, at amortized cost
Concessional partner loans, at amortized cost$

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

18,212
7,758
6,609
32,579June 30, 2022
(Unaudited)$

19,7186,201
6,980
32,899948

579

Payable for development grants—Note H

4,179

4,615

Payable to affiliated organization—Note G

510

578

Other liabilities—Notes C and D

3,393

2,675

Total liabilities

41,60941,346EquityMembers' 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

290,405

289,536(29,165)(3,858)257,382(27,902)(3,857)257,777

Nonnegotiable, noninterest-bearing demand obligations on account ofmembers' subscriptions and contributions(9,157)(10,167)

(249)

(246)

Accumulated deficit (Statements of Changes in Accumulated Deficit)(60,079)(59,544)

Accumulated other comprehensive loss—Note I(14,571)(9,152)

Total equity

173,326

178,668

Deferred amounts to maintain value of currency holdings

Total liabilities and equity$

214,935$

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

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)27

CONDENSED STATEMENTS OF INCOME
Expressed in millions of U.S. dollars

Interest revenue
Loans, net—Note D
Investments, net—Notes C and G
Asset-liability management derivatives, net—Notes F and J

Three Months Ended
September 30,(Unaudited)
2022
2021

$

516
157
2

$

481
33
-

Borrowing expenses, net—Note E

(146)

(46)

Interest revenue, net of borrowing expenses

529

468

Provision for losses on loans and other exposures—Note D

(52)

(100)

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

166
7
6
179

149
6
4
159

Non-interest expenses
Administrative—Note G
Other
Total

(531)
(1)
(532)

(494)
(15)
(509)

(1,058)(343)

Non-functional currency translation adjustment gains, net

479

168

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

(107)

15

27

62

Development grants—Note H

Unrealized mark-to-market gains on non-trading portfolios, net—Note J
Net loss

$

(535)

$

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

28

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)(80)CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
Expressed in millions of U.S. dollars
Three Months Ended
September 30,(Unaudited)
2022
2021
Net loss
Other comprehensive loss—Note I
Currency translation adjustments on functional currencies
Net Change in Debit Valuation Adjustment (DVA) on Fair Value option
elected liabilities
Comprehensive loss

$

$

(535)

$

(80)

(5,419)(1,842)(5,954)(31)(1,953)$

CONDENSED STATEMENTS OF CHANGES IN ACCUMULATED DEFICIT
Expressed in millions of U.S. dollars
Three Months Ended
September 30,(Unaudited)
2022
2021
Accumulated Deficit at beginning of the fiscal year
Net loss
Accumulated deficit at end of the period$$(59,544)(535)(60,079)$$(59,556)(80)(59,636)

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

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)29

CONDENSED STATEMENTS OF CASH FLOWS
Expressed in millions of U.S. dollars

Cash flows from investing activities
Loans
Disbursements
Principal repayments
Non-trading securities—Investments
Repayments
Net cash used in investing activities

Three Months Ended
September 30,(Unaudited)
2022
2021
$

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(2,553)
1,677$(2,493)
1,531

53
(823)

61
(901)

614

473

1,989
(25)

4,432
(25)

2,875
(1,220)(1,649)
(2)
2,582

1,732
(1,619)
(293)
2
4,702

(535)

(80)

Cash flows from operating activities
Net loss
Adjustments to reconcile net loss to net cash used in operating activities
Provision for losses on loans and other exposures
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 used in operating activities

52
(479)
(27)
1
35

100
(168)
(62)
15
25

(680)
(184)
(1,817)(2,861)(654)(3,685)

Effect of exchange rate changes on unrestricted and restricted cash
Net (decrease) 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

(11)
(69)
686
617

(2)
114
496
610

Supplemental disclosure(Decrease) Increase 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$$(6,204)(1,176)(1,587)
262
846
10
83

$

$

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

30

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)(2,222)
(340)
(495)
95
393
9
35

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 Statesof America (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 three months of the current
fiscal year are not necessarily indicative of the results 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 November [ ], 2022 which was also the date through which IDA’s
management evaluated subsequent events.
Accounting and Reporting Developments
Accounting Standards Under Evaluation:
In March 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (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 ofcurrent-period gross write-offs by year of origination. This ASU will be effective from the quarter ending September
30, 2023 (fiscal year 2024), with early adoption permitted. IDA is currently evaluating the impact of the ASU on its
financial statements.
In November 2021, the FASB issued ASU 2021-10, Disclosure by Business Entities about Government Assistance,
which requires entities to make certain annual disclosures about government assistance transactions. This ASU will
be effective from the fiscal year ending June 30, 2023 (annual statements of fiscal year 2023), with early adoption
permitted. IDA is currently evaluating the impact of the ASU on its financial statements.
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$$

September 30, 2022
257,777
226(621)
257,382$$

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

During the three months ended September 30, 2022, IDA encashed demand obligations totaling $388 million.

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)31

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 September 30, 2022, IDA’s Investments were mainly comprised of government and agency obligations (53%)
and time deposits (46%), with all of the instruments classified as either Level 1 or Level 2 within the fair value
hierarchy. As of September 30, 2022, the largest holding of investments with a single counterparty was Japanese
government instruments (14%).
A summary of IDA’s Investments is as follows:
Table C1: Investments-composition
In millions of U.S. dollars
September 30, 2022
Trading
Government and agency obligations
Time deposits
Asset-backed securities (ABS)
Non-trading
Debt securities
Total

32

$

$

21,222
18,143
131
39,496$283
39,779June 30, 2022$$

23,902
15,411
168
39,481$

346
39,827

IDA Condensed Quarterly Financial Statements: September 30, 2022 (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
September 30, 2022
Investments
Trading
Non-trading
Total

$

June 30, 2022

39,496283
39,779$39,481
346
39,827

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

(844)

(772)

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

350
4
354

306
2
308

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

(36)
(36)

(50)
(1)
(51)

544
10
(831)
38,976583
9(343)
39,561

Cash held in investment portfolio b
Receivable from investment securities traded and other assets c
Payable for investment securities purchased d
Net Investment Portfolio$$a. This amount represents cash collateral of $844 million received from counterparties under derivative agreements as of
September 30, 2022 ($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.

The maturity structure of IDA’s non-trading investment portfolio (principal amount due) was as follows:
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

$

September 30, 2022
86

$

68
55
13
12
71
305

June 30, 2022
$

96

$

77
62
34
12
77
358

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.
IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)33

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
September 30, 2022
Collateral received
Cash
Securities a
Total collateral received
Collateral permitted to be repledged
Amount of collateral repledged
Amount of cash collateral invested

$
$
$

844
59
903
903
655

June 30, 2022
$
$
$

772
772
772
659

a. Includes $56 million of excess collateral received as of September 30, 2022 (Nil – June 30, 2022).

As of September 30, 2022, and June 30, 2022, there were no liabilities relating to securities transferred under
repurchase or securities lending agreements and no securities purchased under resale agreements.
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 $568 million as of September 30, 2022($521 million—June 30, 2022) are presented in Other assets on the Condensed Balance Sheets.
As of September 30, 2022, 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 of
September 30, 2022.
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 takes into account Environmental, Social andGovernance factors. For the purpose of analyzing their risk characteristics, these exposures are grouped into threeclasses in accordance with assigned borrower risk ratings, which relate to the likelihood of loss: Low, Medium andHigh risk classes, as well as exposures in nonaccrual status.

34

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)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 September 30, 2022, 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.
The following tables provide an aging analysis of loans outstanding:
Table D1: Loans-Aging structure
In millions of U.S. dollars
September 30, 2022
Days past due
Risk Class
Low
MediumHigh
Loans in accrual status
Loans in nonaccrual status
Total

Up to 45
$

$

46-60

- $
10
10
5
15 $

61-90
1
1

$

91-180
1
1

$

$

$

2
2
10
12

Over 180

Total Past
Due

$

$

$

401
401

$

12
12
418
430

Current

Total

$

311 $
311
19,493
19,493
152,101 a
152,113
171,905
171,917418
836$ 172,323 $ 172,753

Table D1.1:

In millions of U.S. dollars
June 30, 2022
Days past due
Risk Class
Low
MediumHigh
Loans in accrual status
Loans in nonaccrual status
Total

Up to 45
$

$

- $
7
7
7
14 $

46-60

61-90
*
*
*
*

$

$

91-180
6
6
3
9

$

$

11
11
8
19

Over 180

Total Past
Due

$

$

$

408
408

$

24
24
426
450

Current

Total

$

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 $56 million ($50 million-June 30, 2022).
* Includes amount less than $0.5 million.

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)

35

The table below discloses the outstanding balances of IDA’s loan portfolio as of September 30, 2022, classified by
the year the loan agreement was signed. IDA considers the signature date of a loan as the best indicator of thedecision point in the origination process, rather than the disbursement date.
Table D2: Loan portfolio vintage disclosure
In millions of U.S. dollars
September 30, 2022
Fiscal Year of origination

Risk Class
Low
MediumHigh
Loans in accrual
statusLoans innonaccrual status
Total

2023
$

$

2022

2021

2020

2019

Loans
CAT DDOs
Outstanding
as ofdisbursed CAT DDOs
andConverted to September 30,
Prior Years revolving Term Loans
2022

- $
242

- $
111
3,946

- $
- $
- $
311 $
390
531
238
18,223
7,687
7,338
9,245
123,308

- $
176

- $
171

311
19,493
152,113

242

4,057

8,077

176

171

171,917242 $

4,057 $

836
8,077 $ 7,869 $ 9,483 $ 142,678 $

176 $

171 $

836
172,753

7,869

9,483

141,842

Table D2.1:

In millions of U.S. dollars
June 30, 2022
Fiscal Year of origination
Risk Class
Low
MediumHigh
Loans in accrual
statusLoans innonaccrual status
Total

2022
$

$

2021

2020

2019

2018

CAT DDOs
Loans
disbursed CAT DDOs OutstandingandConverted to as of June 30,
Prior Years revolving Term Loans
2022

- $
111
3,678

- $
394
7,509

- $
- $
- $
374 $
542
243
77
19,1247,233
9,365 10,042
118,173

- $
182

- $
177

374
20,491
156,359

3,789

7,903

7,775

182

177

177,224

3,789 $

7,903 $

867
7,775 $ 9,608 $ 10,119 $ 138,538 $

182 $

177 $

867
178,091

9,608

10,119137,671

The amount of Catastrophe Deferred Drawdown Option (CAT DDO) outstanding and revolving converted to termloans during the three months ended September 30, 2022 was $5 million.
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 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 isforgiven 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 three months ended September 30, 2022, and the fiscal year ended June 30, 2022, there were no loans
written off under the MDRI.

36

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)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
Loans
outstanding
Accumulated provision, beginning of the fiscal year $Provision, net - charge
Loans written off under:
HIPC/MDRITranslation adjustment
Accumulated provision, end of the period$
Including accumulated provision for losses on:
Loans in accrual status
Loans in nonaccrual status
Total

$
$

2,876
14
(100)
2,790

September 30, 2022
Debt relief
Loan
under
Other acommitments
HIPC/MDRI$
1,082 $
707 $
155
31
7

$

(41)
1,072

2,564
226
2,790

$
$
$

(10) b
(15)
682 $

(2)
160

413
269
682

Total
$

4,820
52
(10)
(158)
4,704

$
$

2,977
495
3,472

$

Loans:
Loans in accrual status
Loans in nonaccrual status
Loans outstanding$$

171,917836
172,753

Table D3.1:

In millions of U.S. dollars
Loans
outstanding
Accumulated provision, beginning of the fiscal year $Provision, net - charge (release)
Loans written off under:
HIPC/MDRITranslation adjustment
Accumulated provision, end of the period$
Including accumulated provision for losses on:
Loans in accrual status
Loans in nonaccrual status
Total

$
$

Loans:
Loans in accrual status
Loans in nonaccrual status
Loans outstanding

2,946
135
(205)
2,876
2,641
235
2,876

June 30, 2022
Debt relief
Loan
under
Other acommitments
HIPC/MDRI$
1,054 $
772 $
120
109
(5)
39

$

(81)
1,082

$
$
$

(30) b
(30)
707 $
433
274
707

(4)
155

Total
$

4,892
278
(30)
(320)
4,820

$
$

3,074
509
3,583

$
$
$

177,224867
178,091

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

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)37

Accumulated Provision forLosses on:
Loans outstanding
Debt Relief under
HIPC/MDRI
Loan commitments and Other
Exposures

Condensed Balance Sheets

Reported as Follows
Condensed Statements of Income

Accumulated provision for loan losses

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

Accumulated provision for loan losses
Other liabilities

Overdue Amounts
As of September 30, 2022, principal of $2 million and charges of $1 million from one borrower in accrual status
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
Nonaccrual
Borrowersince
EritreaMarch 2012
Syrian Arab
Republic
June 2012
Zimbabwe
October 2000
Total - September 30, 2022

Recorded
investment a$
400

Total - June 30, 2022

$

14
422
836

$

867

Average
Provision
recordedPrincipal
for debt
investment Outstanding
relief
$
407 $
400 $
269

Overdue amounts

Provision
for loanlosses b$
14

Principal$
110

Charges
$
34

$

13
295
418

$

1
64
99

$

426

$

101

$

14
430
851 $

14
422
836 $

269

$

1
211
226

$

907 $

867 $

274

$

235

a. A loan loss provision has been recorded against each of the loans in nonaccrual status.
b. Loan loss provisions are determined after taking into account accumulated provision for debt relief.

During the three months ended September 30, 2022 and 2021, no new loans were placed into nonaccrual status.
During the three months ended September 30, 2022, service charge revenue not recognized as a result of loans being
in nonaccrual status was $1 million ($2 million – three months ended September 30, 2021).
During the three months ended September 30, 2022, service charge revenue recognized on loans in nonaccrual status
was less than $1 million (Nil – three months ended September 30, 2021).
Guarantees
Guarantees of $2,486 million were outstanding as of September 30, 2022 ($2,507 million—June 30, 2022). This
amount includes $643 million relating to the PSW ($638 million—June 30, 2022). The outstanding amount ofguarantees represents the maximum potential undiscounted future payments that IDA could be required to makeunder these guarantees and are not included on the Condensed Balance Sheets. The guarantees issued by IDA haveoriginal maturities ranging between 3 and 22 years and expire in decreasing amounts through 2043.
As of September 30, 2022, liabilities related to IDA’s obligations under guarantees included the obligation to standready of $141 million ($145 million—June 30, 2022), and the accumulated provision for guarantee losses of $132
million ($126 million—June 30, 2022). These have been included in Other liabilities on the Condensed Balance
Sheets.
During the three months ended September 30, 2022 and 2021, no guarantees provided by IDA to sovereign or subsovereign borrowers were called. During the three months ended September 30, 2022, 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 International Finance Corporation (IFC) were called (Nil – three months ended
September 30, 2021).

38

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)

Concentration Risk
Loan revenue comprises service charges, interest charges and commitment charges, net of waivers. For the threemonths ended September 30, 2022, loan revenue of $68 million and $59 million from two countries, were each inexcess of 10% 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 three months ended September 30,
2022
2021
Loans
Loans
Loan Revenue b
Outstanding
Loan Revenue b
Outstanding$
196$
59,012$
180$
63,524
117
47,689110
48,434
104
35,106
94
34,65457
18,18859
20,201
30
7,330
28
7,659
14
3,253
12
3,314
5
2,119
5
2,439
1
56
10
$
524
$
172,753$488$
180,235

a. Represents loans under the PSW.
b. Excludes $1 million of interest rate swap expenses related to loan hedges for the three months ended September 30, 2022 ($1million-three months ended September 30, 2021). Includes net commitment charges of $7 million for the three months ended
September 30, 2022 ($6 million – three months ended September 30, 2021).

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 September 30, 2022, and June 30, 2022, the instruments in IDA’s borrowing portfolio measured at fair value
were classified as Level 2 within the fair value hierarchy. A summary of IDA’s borrowings are as follows (fordetails on principal due upon maturity, see Note J—Fair Value Disclosures):
Table E1: Market borrowings outstanding, at fair value, after derivatives
In millions of U.S. dollars
September 30, 2022$
18,212967
2,194$
21,373Market borrowings
Currency swaps, net
Interest rate swaps, net
Total at fair value

June 30, 2022$
19,718547
1,586$
21,851

Table E2: Market borrowings outstanding, at amortized cost
In millions of U.S dollars

September 30, 2022
June 30, 2022

Principal at face value
$
7,810
$
6,240

Net unamortized premium(discount)
$
(52)
$
(39)

$
$

Total

7,758
6,201

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)39

Table E3: Concessional partner loans outstanding, at amortized cost
In millions of U.S dollars
Principal at face value
$
8,017
$
8,508

September 30, 2022
June 30, 2022$$

Net unamortized discount(1,408)(1,528)

Total
$
$

6,609
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:

Derivative instruments used

Purpose/Risk being managed

Investments—Trading

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

Other assets/liabilities
management

Currency forward contracts, currency swaps andinterest rate swaps

Manage currency and interest rate risks.

Loans

Interest rate swaps

Manage interest rate risk.

Borrowings

Interest rate swaps and currency swaps

Manage currency and interest rate risks.

Structured swaps

Assist clients in managing risks.

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.

40

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)Table F2: Derivative assets and liabilities before and after netting adjustments
In millions of U.S. dollars

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 d
Net derivative exposure after
collateral

September 30, 2022
Derivative Assets
Derivative Liabilities
Gross
Gross
Gross
Amounts
Net
Gross
Amounts
Net
Amounts
OffsetAmounts
Amounts
OffsetAmounts$
3,209 $
(1,510) $1,699$
2,964 $
(771) $
2,193
23,540(21,638)
1,902
5,966
(4,887)
1,079$
26,749 $(23,148) $3,601$
8,930 $
(5,658) $3,272$

2,404 b844$

2,324 c

$

353

$

948

3
$

350

Table F2.1:

In millions of U.S. dollars

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

June 30, 2022
Derivative Assets
Derivative Liabilities
Gross
Gross
Gross
Amounts
Net
Gross
Amounts
Net
Amounts
OffsetAmounts
Amounts
OffsetAmounts$
3,267 $
(1,678) $1,589$
2,321 $
(727) $
1,594
16,624(15,355)
1,269
6,569
(5,918)651$
19,891 $(17,033) $2,858$
8,890 $
(6,645) $2,245$

1,682 b772$

1,666 c

$

404

$

579

$

404

a. Includes currency forward contracts.
b. Includes $123 million Credit Value Adjustment (CVA) ($35 million-June 30, 2022).
c. Includes $43 million Debit Value Adjustment (DVA) ($19 million-June 30, 2022).
d. Excludes $56 million of excess collateral received as of September 30, 2022.

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)

41

The following table provides information about the credit risk exposures, at the instrument level, of IDA’s derivative
instruments.
Table F3: Credit risk exposure of the derivative instruments
In millions of U.S. dollars

Investments - Trading
Asset/liability management
Borrowings
Other aTotal Exposure$$

Interest rate
swaps
4
1,596
99
1,699

September 30, 2022
Currency swaps (including
currency forward contracts)
$
350
1,552
$
1,902

Interest rate
swaps
2
1,513
2
72
1,589

June 30, 2022
Currency swaps (including
currency forward contracts)
$
306
963
$
1,269

Total
$

354
3,148
99
3,601

$

Table F3.1
In millions of U.S. dollars

Investments - Trading
Asset/liability management
Borrowings
Other aTotal Exposure

$

$

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 September 30, 2022, the notional amounts of IDA’s derivative contracts
outstanding were as follows: interest rate swaps $32,296 million ($33,267 million as of June 30, 2022) and, currency
swaps $30,468 million ($23,120 million as of June 30, 2022). There were no long or short positions of otherderivatives as of September 30, 2022 (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 September 30, 2022 is $946 million ($586 million —June 30, 2022). As of September
30, 2022, 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 September 30, 2022, the amount of collateral that would need to be posted
would be $310 million ($41 million—June 30, 2022). Subsequent triggers of contingent features would requireposting of additional collateral, up to a maximum of $946 million as of September 30, 2022 ($586 million—June 30,2022).

42

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)

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

Type of instrument

Three Months Ended
September 30,
2022
2021

Reported as

Interest rate swaps
Currency swaps and currency forward contracts
Total

Unrealized mark-to-market
losses on non-trading
portfolios, net

$

(480)

$

(57)

$

(306)
(786)

$

(27)
(84)

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 in 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
September 30,
2022
2021

Reported as

Fixed income (including related derivatives)

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

$

(107)

$

15

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 September 30, 2022 were $20,476 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

Beginning of the
fiscal year$
20,476

Transfers during
the period$-

End of period$
20,476

16,361
3,885
230

-

16,361
3,885
230

Subsequent Event
On October 14, 2022, IBRD’s Board of Governors approved a transfer of $117 million to IDA. This transfer wasreceived on October 20, 2022.
IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)

43

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
September 30, 2022
IBRD
IFC
Total
Administrative Services
$
(510)
$
$
(510)
Post-Retirement Contribution Reserve Fund a
438
438
Pension and Other Postretirement Benefits
579
579
Derivative (liabilities)/assets, net
(7)
(44)
(51)
PSW- Blended Finance Facility b
57
57
Investments
283
283
Total
$
500
$
296
$
796

June 30, 2022
IBRD
IFC
Total
$
(578) $
- $
(578)
404
404
602
602
(8)
(9)
(17)
54
54
346
346
420 $
391 $
$
811

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. 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:Reported as:

Receivable for pension and other postretirement benefits

Receivable from affiliated organization

Receivable for PCRF

Receivable from affiliated organization

Net receivables (payables) for derivative transactions

Derivative assets/liabilities, net

Payable for administrative services

Payable to affiliated organization

Receivable for PSW – Blended Finance Facility

Other Assets

Receivable for Investments

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 months ended September 30, 2022, IDA’s share of joint administrative expenses and contributions to
special programs totaled $421 million ($392 million - three months ended September 30, 2021).
Other revenue: Includes IDA’s share of other revenue jointly earned with IBRD during the three months ended
September 30, 2022 totaling $56 million ($47 million—three months ended September 30, 2021).
The amount of fee revenue associated with services provided to other affiliated organizations are included in Other
revenue in 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 September 30,
2022
2021
20
$
17
1
1

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 aparticipating 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 months ended September 30, 2022, IDA’s share of IBRD’s benefit costs relating to all three plans
totaled $41 million ($48 million—three months ended September 30, 2021).
44

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)

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 September 30, 2022, the principal amount due on the debt security was$305 million ($358 million—June 30, 2022), with a fair value of $283 million ($346 million—June 30, 2022). The
investment is reported under Investments on the Condensed Balance Sheets. During the three months ended
September 30, 2022, IDA recognized interest income of $2 million from this investment ($2 million - three months
ended September 30, 2021).
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 set at $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.
The following tables provide a summary of all PSW related transactions under which IDA has an exposure as of
September 30, 2022:
G4: Summary of PSW-related transactions
In millions of U.S. dollars
Facility

Notional

Local Currency Facility $231

Net Asset/
Description(Liability) position$(44)
Currency swaps with IFC to support
local currency denominated loans

In millions of U.S. dollars
Facility

Accumulated
Provision

Exposure

MIGA Guarantee
Facility

$

269

$

36

Blended Finance
Facility

$

374

$

62

57

Not applicable

56

8

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

Location on the Condensed
Balance Sheets
Accumulated
Exposure
Provision
Expanding the coverage of MIGA
Off Balance
Other
Political Risk Insurance (PRI) products Sheet item
liabilities
through shared first-loss or risk
participation similar to reinsurance
Sharing the coverage of IFC
Off Balance
Other
programs through shared first loss
Sheet item
liabilities
Description

Funding for IFC's PSW equity
investments recorded at fair value

Other assets

Concessional senior and subordinated Loans
loans to support medium term projects outstanding

Accumulated
Provision for
Loan Losses

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)45

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
September 30, 2022
4,615
(267)
(8)
(161)
$
4,179

Balance, beginning of the fiscal year
Disbursements (including PPA grant activity)aCancellations
Translation adjustment
Balance, end of the period/ fiscal year$

June 30, 2022
6,820
(1,659)
(149)
(397)
$
4,615
$

a. Project Preparation Advances (PPA)

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

Conditional Development grants disbursed a
Cancellation of unconditional grants
Disbursement of grant advances not yet expensed b
Grant advances meeting expense condition c
Grant Expenses$

Grants Approved$

Three Months Ended September 30,
2022
2021
1,174
$
552
(8)
(16)
(358)
(302)
250
109
1,058
$
343

$

2,049

$

1,088

a. Disbursements of conditional grants approved on or after July 1, 2019.
b. Disbursements made over the period for which the expense recognition criteria has not yet been met.
c. Prior disbursement of grant advances meeting the criteria to be expensed over the period.

As of September 30, 2022, the cumulative amount of conditional grants approved but not yet expensed since all of
the conditions have not been met was $24,548 million. Out of which, the outstanding amount of conditional grant
advances disbursed but not yet expensed, totaling $2,297 million as of September 30, 2022 ($2,189 million – June30, 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

Balance, beginning of the fiscal year
Currency translation adjustments on functional currencies
DVA on fair value option elected liabilities
Balance, end of the period

46

$

$

Three Months Ended September 30,
2022
2021
(9,152)$
1,656(5,419)(1,842)(31)(14,571)$(217)

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)NOTE J— FAIR VALUE DISCLOSURES
Valuation Methods and Assumptions
As of September 30, 2022, 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 September 30, 2022 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.
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 September 30, 2022, and June 30, 2022, borrowings measured at amortized cost would be classified as Level 2
within the fair value hierarchy.
Derivative instruments
Derivative contracts include currency forward contracts, TBA securities, swaptions, exchange traded options andfutures contracts, currency swaps and interest rate swaps.
Where available, quoted market prices are used to determine the fair value of trading securities. Examples include
exchange traded 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: September 30, 2022 (Unaudited)

47

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 cost
Concessional partner loans
Derivative liabilities, net

September 30, 2022
Carrying Value
Fair Value

June 30, 2022
Carrying Value
Fair Value

$

$

617

$

617

686

$

686

39,779169,266
353

39,779129,417353

39,827
174,490404

39,827141,193404

18,212
7,758
6,609
948

18,212
6,186
6,211
948

19,718
6,201
6,980
579

19,718
5,073
7,123
579

As of September 30, 2022, IDA’s signed loan commitments were $61.2 billion ($61.8 billion – June 30, 2022) andhad a fair value of $(8.9) billion ($(8.2) billion – June 30, 2022).

48

IDA Condensed Quarterly Financial Statements: September 30, 2022 (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 September 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

$

$

$
$

10,329806
11,135
11,135

$

-

$

$

$

10,893
17,337
131
28,361283
28,644

$

1,902
1,699
3,601

$

$

$

-

$

-

$

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

$

1,902
1,699
3,601

$

2,404
844
353

$

-

$

18,212$-$

18,212

$

-

$

1,079
2,193
3,272

$

-

$
$

1,079
2,193
3,272

$

2,324
948

$
Less:
Amounts subject to legally enforceable master netting agreements b
Derivative liabilities, net$

21,222
18,143
131
39,496283
39,779$$a. Includes $123 million CVA.
b. Includes $43 million DVA.

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)49

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
September 30, 2022
June 30, 2022$$

Fair value283
346

Principal amount due
$
$

305
358

$
$

Difference
(22)
(12)

Presented below is the difference between the aggregate fair value and aggregate contractual principal balance ofmarket borrowings:
Table J4: Market Borrowings-Fair value and contractual principal balance
In millions of U.S. dollars
September 30, 2022
June 30, 2022

50

Fair Value$
18,212$
19,718Principal Due Upon
Maturity$
20,728$21,506

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)$$

Difference(2,516)(1,788)

Valuation adjustments on fair value option elected liabilities
During the three months ended September 30, 2022, IDA recorded unrealized mark-to-market gains of less than $0.5
million ($31 million loss – three months ended September 30, 2021) 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 $13 million cumulative loss as of September 30, 2022 ($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 table reflects 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 bTotal

Realized
gains(losses)
$
55

$

-

Three Months Ended September 30,
2022
2021
Unrealized
Unrealized
gains
gains
(losses)(losses)
excludingexcluding
Unrealized
Realized
realized
realized
gains
gains
amounts a(losses)(losses)amounts a
$
(162)
$
(107)
$
63
$
(48)

$

27
(8)
1
7
27

$

27
(8)
1
7
27

$

-

$

58
(2)
11
(5)
62

Unrealized
gains(losses)
$
15

$

58
(2)
11
(5)
62

a. Adjusted to exclude amounts reclassified to realized gains (losses).
b. Other comprises 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 three months ended September 30, 2022, is not expected to have a material adverse
effect on IDA's financial position, results of operations or cash flows.

IDA Condensed Quarterly Financial Statements: September 30, 2022 (Unaudited)51

INDEPENDENT AUDITORS’ REVIEW REPORT
Independent Auditors’ Review Report

Deloitte & Touche LLP
7900 Tysons One Place
Suite 800
McLean, VA 22102
USA
Tel.: +1 703 251 1000
Fax: +1 703 251 3400
www.deloitte.com

INDEPENDENT AUDITOR’S REVIEW REPORT
President and Board of Executive Directors
International Development Association:
Results of Review of Interim Financial Information
We have reviewed the accompanying condensed balance sheet of the International Development
Association (“IDA”) as of September 30, 2022, and the related condensed statements of income,comprehensive income, changes in accumulated deficit, and cash flows for the three‐month periods ended
September 30, 2022 and 2021, and the related notes (collectively referred to as the “interim financial
information”).
Based on our reviews, we are not aware of any material modifications that should be made to theaccompanying interim financial information for it to be in accordance with accounting principles generally
accepted in the United States of America.
Basis for Review Results
We conducted our reviews in accordance with auditing standards generally accepted in the United Statesof America (GAAS) applicable to reviews of interim financial information. A review of interim financial
information consists principally of applying analytical procedures and making inquiries of persons
responsible for financial and accounting matters. A review of interim financial information is substantiallyless in scope than an audit conducted in accordance with GAAS, the objective of which is an expression ofan opinion regarding the financial information as a whole, and accordingly, we do not express such an
opinion. We are required to be independent of IDA and to meet our other ethical responsibilities inaccordance with the relevant ethical requirements relating to our review. We believe that the results of
the review procedures provide a reasonable basis for our conclusion.
Responsibilities of Management for the Interim Financial Information
Management is responsible for the preparation and fair presentation of the interim financial informationin accordance with accounting principles generally accepted in the United States of America and for thedesign, implementation, and maintenance of internal control relevant to the preparation and fairpresentation of interim financial information that is free from material misstatement, whether due to fraud
or error.
Report on Condensed Balance Sheet as of June 30, 2022
We have previously audited, in accordance with auditing standards generally accepted in the United Statesof America, the balance sheet as of June 30, 2022, and the related statements of income, comprehensive
income, changes in accumulated deficit, and cash flows for the year then ended (not presented herein);
and we expressed an unmodified audit opinion on those audited financial statements in our report dated
52

INDEPENDENT AUDITORS’ REVIEW REPORT

August 5, 2022. In our opinion, the accompanying condensed balance sheet of IDA as of June 30, 2022, isconsistent, in all material respects, with the audited financial statements from which it has been derived.

November 11, 2022

53