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[Senate Report 111-50]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 112
111th Congress                                                   Report
                                 SENATE
 1st Session                                                     111-50

======================================================================

 
 WORLD BANK INTERNATIONAL DEVELOPMENT ASSOCIATION REPLENISHMENT ACT OF 
                                  2009

                                _______
                                

                 July 16, 2009.--Ordered to be printed

          Mr. Kerry, from the Committee on Foreign Relations,
                        submitted the following

                                 REPORT

                         [To accompany S. 954]

    The Committee on Foreign Relations, having had under 
consideration the bill (S. 954), to authorize United States 
participation in the replenishment of resources of the 
International Development Association, and for other purposes, 
reports favorably thereon with amendments, and recommends that 
the bill, as amended, do pass.

                                CONTENTS

                                                                   Page

  I. Purpose..........................................................1
 II. Committee Action.................................................1
III. Discussion.......................................................1
 IV. Cost Estimate....................................................3
  V. Evaluation of Regulatory Impact..................................6
 VI. Changes in Existing Law..........................................6

                               I. PURPOSE

    The purpose of S. 954 is to authorize United States 
participation in the fifteenth replenishment of resources of 
the International Development Association (IDA) of the 
International Bank for Reconstruction and Development.

                          II. COMMITTEE ACTION

    S. 954 was introduced by Senators Kerry and Lugar on May 1, 
2009. It is cosponsored by Senator Kaufman. On May 5, 2009, the 
committee ordered S. 954 reported favorably by voice vote.

                            III. DISCUSSION

    S. 954, the ``World Bank International Development 
Association Replenishment Act of 2009'' authorizes the 
Secretary of the Treasury, as U.S. Governor of the 
International Development Association, to U.S. participation in 
the fifteenth replenishment of 
the International Development Association (IDA). The U.S. 3-
year appropriation, 2009-2011, amounts to $3.7 billion, 
representing 
14.7 percent of the total $41.6 billion replenishment. Although 
this represents an increase from the previous U.S. 
replenishment contribution, for the first time the United 
Kingdom (UK) has replaced the U.S. as the top donor to IDA. The 
UK's contribution for this replenishment is $4.3 billion or 
16.7 percent of the total. In the previous IDA replenishment, 
the Congress appropriated $2.85 billion out of a total 
replenishment of $33 billion.
    IDA was founded in 1960, 16 years after the creation of the 
World Bank, to address concern that the poorest countries could 
not afford to borrow at the near-market rate terms offered by 
the International Bank for Reconstruction and Development 
(IBRD).
    It was established as a revolving fund, providing 
concessional loans to the poorest countries subsidized by donor 
contributions and transfers from the IBRD. It is the largest 
provider of multilateral official development assistance to low 
income countries; between 1994 and 2005 it disbursed 
approximately $80 billion. Since IDA provides the poorest 
countries with grants and loans at subsidized rates, its 
resources must be periodically replenished. Donor nations have 
replenished IDA 14 times since its founding.
    On March 5, 2007, donor nations began to discuss a possible 
fifteenth replenishment of funds for IDA. This is the first 
replenishment since the G8 summit at the Gleneagles Resort in 
Scotland in 2005 where world leaders proposed the creation of 
the Multilateral Debt Relief Initiative (MDRI). The MDRI 
cancels the remaining debt of the world's poorest countries and 
pledges to double the amount of aid to Sub-Saharan Africa 
between 2004 and 2010, primarily in the form of grant-based 
assistance. In the negotiations, the U.S. emphasized the 
following reform areas: An expanded results measurement system 
to increase project effectiveness, improvements to World Bank 
engagement in fragile and post-conflict states, measures to 
enhance debt sustainability in debt relief recipients, and 
greater institutional transparency.

    Enhanced efforts to improve results. IDA has established a 
results measurement system to monitor progress against key 
development indicators (such as primary school completion rates 
and HIV prevalence rates). The committee supports the World 
Bank's commitment to continue to improve the quality of data 
and the way it is measured, strengthening the link between 
expenditures and poverty reduction.

    Fragile and post-conflict states. The committee notes that 
the World Bank has increased the scale of its assistance to 
fragile and post-conflict states such as Liberia. This is a 
positive development; the committee intends for this 
replenishment to increase the World Bank's capacity to help 
cash-strapped post-conflict states. Restoring essential 
services, initiating infrastructure reconstruction, and 
bringing about a ``peace dividend'' are critical areas that 
require sustained Bank support.

    Debt sustainability and grants. The Bank will be able to 
provide grants to countries at risk of experiencing debt 
distress. The committee believes this represents an important 
step towards ending lend-and-forgive policies and will ensure 
that the poorest countries will be able to sustainably service 
their debt.
    Transparency. Increased transparency is a high priority for 
the committee. It is important that the Bank continue to 
implement transparency reforms in the latest replenishment, 
including disclosing Board minutes, strengthening public 
consultation procedures, and continuing independent audits of 
internal management controls. The committee continues to 
monitor progress at the World Bank on anti-corruption efforts 
in its projects and programs and believes that ensuring that 
development funds are not stolen or misused will result in 
better project and program outcomes. The committee also 
continues to monitor progress at the World Bank on anti-
corruption and transparency promotion with client countries.

    S. 954 lays out several congressional priorities. First, 
the bill requires that the World Bank consider greenhouse gas 
emissions when undertaking environmental assessments of 
potential funded projects. Second, the bill directs the 
Secretary of the Treasury to urge the World Bank to help 
countries build capacity to investigate, adjudicate, and punish 
corruption. Third, it requires the Secretary to use the voice 
and vote of the United States to strengthen inspection panel 
functions within the multilateral development banks. Fourth, it 
includes language promoting that MDBs rigorously evaluate the 
development impact of selected projects, programs, and 
financing operations. Fifth, it authorizes separate 
appropriations for the Multilateral Debt Relief Initiative to 
ensure full funding of U.S. commitments. Sixth, it directs the 
Secretary of the Treasury to conduct a study on the respective 
roles of the Departments of State, Treasury and the U.S. Agency 
for International Development play in the formulation of United 
States policy concerning the development policy, programs, and 
activities of the World Bank Group.

                           IV. COST ESTIMATE

    In accordance with Rule XXVI, paragraph 11(a) of the 
Standing Rules of the Senate, the committee provides this 
estimate of 
the costs of this legislation prepared by the Congressional 
Budget Office.

                            United States Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 11, 2009.

Hon. John F. Kerry.,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 954, the World Bank 
International Development Association Replenishment Act of 
2009.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is John Chin.
          Sincerely,
                                      Douglas W. Elmendorf.

                                ------                                

               Congressional Budget Office Cost Estimate

                                                     June 11, 2009.

                                 S. 954

 World Bank International Development Association Replenishment Act of 
                                  2009

            AS ORDERED REPORTED BY THE SENATE COMMITTEE ON 
                    FOREIGN RELATIONS ON MAY 5, 2009

                                SUMMARY

    S. 954 would authorize the appropriation of $3.7 billion 
for the United States' share of the fifteenth general 
replenishment of the resources of the International Development 
Association (IDA-15). That replenishment agreement covers the 
three-year-period ending in June 2011.
    The bill also would authorize the appropriation of up to 
$356 million to meet potential shortfalls in the U.S. 
commitment to compensate the International Development 
Association (IDA) for debts cancelled under the Multilateral 
Debt Relief Initiative (MDRI) during the IDA-15 replenishment 
period.
    CBO estimates that implementing S. 954 would cost about 
$2.6 billion over the 2010-2014 period, assuming appropriation 
of that amount. (The Congress has already appropriated $1.1 
billion for fund replenishment in 2009.) Enacting the bill 
would not affect direct spending or revenues.
    S. 954 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.

                ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of S. 954 is shown in the 
following table. The costs of this legislation fall within 
budget function 150 (international affairs).

                                       Changes in Spending Due to S. 955*
                                     By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
                                                      2010      2011      2012      2013      2014     2010-2014
----------------------------------------------------------------------------------------------------------------
Fifteenth Replenishment of the International
 Development Association
    Estimated Authorization Level.................    1,320     1,319         0         0         0       2,639
    Estimated Outlays.............................    1,196     1,319       124         0         0       2,639
Multilateral Debt Relief Initiative
    Estimated Authorization Level.................        0         0         5         0         0           5
    Estimated Outlays.............................        0         0         5         0         0           5
----------------------------------------------------------------------------------------------------------------
      Total Changes...............................
        Estimated Authorization Level.............    1,320     1,319         5         0         0       2,644
        Estimated Outlays.........................    1,195     1,319       129         0         0       2,644
----------------------------------------------------------------------------------------------------------------
* The Congress appropriated $1,115 million for a contribution to the International Development Association (IDA)
  for fiscal year 2009, enacted in the Omnibus Appropriations Act, 2009 (Public Law 111-8) on March 11, 2009.
  CBO assumes there would be no additional funding for the IDA for this year.

                           BASIS OF ESTIMATE

    For this estimate, CBO assumes that S. 954 will be enacted 
before June 30, 2009, that the estimated amounts will be 
appropriated each fiscal year, and that outlays will follow 
historical spending patterns for U.S. contributions to IDA.

Fifteenth Replenishment of the International Development Association

    S. 954 would authorize the appropriation of $3.7 billion 
for contributions to IDA-15. The 15th replenishment was agreed 
to in December 2007, committing the United States and other 
donors to contribute a total of $25.1 billion to IDA.
    Based on information from the Department of the Treasury, 
CBO expects that the U.S. commitment to IDA-15 would be funded 
with appropriations over fiscal years 2009 through 2011. The 
Omnibus Appropriations Act, 2009 (Public Law 111-8) provided a 
total of $1,115 million for IDA. The Treasury Department has 
indicated that it has used $49 million of this amount to clear 
arrears to IDA-14, and that it plans to provide the remaining 
$1,066 million for the first installment to IDA-15. CBO further 
expects that the remaining authorized amounts of $2,639 million 
for IDA-15 would be provided in two installments of about 
$1,320 million a year in 2010 and 2011. We estimate that making 
those contributions would cost $2,639 million over the 2010-
2014 period.

Multilateral Debt Relief Initiative

    S. 954 also would authorize the appropriation of up to $356 
million to meet potential shortfalls in the U.S. commitment to 
compensate IDA for debts cancelled under the MDRI during the 
IDA-15 replenishment period.
    The Treasury Department has indicated that it expects to 
fund most or all of the United States' MDRI commitment of $356 
million for IDA-15 by accelerating the encashment (payment) 
schedule for U.S. replenishment payments to IDA-15. Under the 
department's plan, those payments would be completed in four 
years--by 2012--rather than the nine years that would otherwise 
be allotted. Based on a formula negotiated with IDA, those 
early payments would earn credits towards the U.S. MDRI 
commitment because of the additional interest IDA would earn. 
Based on information provided by the Treasury Department on 
this early encashment income, CBO estimates that additional 
appropriations would be required to meet the U.S. MDRI 
commitment. Assuming appropriation and accelerated encashment 
of the estimated amounts over the 2009-2012 period, CBO 
estimates that authorizing such appropriations would cost about 
$5 million in 2012.

              INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

    S. 954 contains no intergovernmental or private-sector 
mandates as defined in UMRA and would not affect the budgets of 
state, local, or tribal governments.

Estimate prepared by:

    Federal Costs: John Chin
    Impact on State, Local, and Tribal Governments: Jacob 
Kuipers
    Impact on the Private Sector: Burke Doherty

Estimate approved by:

    Theresa Gullo, Deputy Assistant Director for Budget 
Analysis.

                   V. EVALUATION OF REGULATORY IMPACT

    Pursuant to Rule XXVI, paragraph 11(b) of the Standing 
Rules of the Senate, the committee has determined that there is 
no regulatory impact as a result of this legislation.

                      VI. CHANGES IN EXISTING LAW

    In compliance with Rule XXVI, paragraph 12 of the Standing 
Rules of the Senate, changes in existing law made by the bill, 
as reported, are shown as follows (existing law proposed to be 
omitted is enclosed in black brackets, new matter is printed in 
italic, existing law in which no change is proposed is shown in 
roman).

International Development Association Act

           *       *       *       *       *       *       *

SEC. 23. FOURTEENTH REPLENISHMENT.

    (a) The United States Governor International Development 
Association is authorized to contribute on behalf of the United 
States $2,850,000,000 to the fourteenth replenishment of the 
resources of the Association, subject to obtaining the 
necessary appropriations.
    (b) In order to pay for the United States contribution 
provided for in subsection (a), there are authorized to be 
appropriated, without fiscal year limitation, $2,850,000,000 
for payment by the Secretary of the Treasury.

SEC. 24. FIFTEENTH REPLENISHMENT.

    (a) The United States Governor of the International 
Development Association is authorized to contribute, on behalf 
of the United States, $3,705,000,000 to the fifteenth 
replenishment of the resources of the Association, subject to 
obtaining the necessary appropriations.
    (b) In order to pay for the United States contribution 
provided for in subsection (a), there are authorized to be 
appropriated $3,705,000,000 for payment by the Secretary of the 
Treasury.

SEC. 25. MULTILATERAL DEBT RELIEF.

    (a) The Secretary of the Treasury is authorized to 
contribute, on behalf of the United States, not more than 
$356,000,000 to the International Development Association for 
the purpose of funding debt relief under the Multilateral Debt 
Relief Initiative in the period governed by the fifteenth 
replenishment of resources of the International Development 
Association, subject to obtaining the necessary appropriations 
and without prejudice to any funding arrangements in existence 
on the date of the enactment of this section.
    (b) In order to pay for the United States contribution 
provided for in subsection (a), there are authorized to be 
appropriated, without fiscal year limitation, not more than 
$356,000,000 for payment by the Secretary of the Treasury.
    (c) In this section, the term ``Multilateral Debt Relief 
Initiative'' means the proposal set out in the G8 Finance 
Ministers' Communique entitled ``Conclusions on Development,'' 
done at London, June 11, 2005, and reaffirmed by G8 Heads of 
State at the Gleneagles Summit on July 8, 2005.

International Financial Institutions Act

           *       *       *       *       *       *       *

TITLE XIII.--THE ENVIRONMENT

           *       *       *       *       *       *       *

SEC. 1307. ASSESSMENT OF ENVIRONMENTAL IMPACT OF PROPOSED MULTILATERAL 
                    DEVELOPMENT BANK ACTIONS.

           *       *       *       *       *       *       *

SEC. 1308. EXPANSION OF CLIMATE CHANGE MITIGATION ACTIVITIES OF, AND 
                    USE OF GREENHOUSE GAS ACCOUNTING BY, MULTILATERAL 
                    DEVELOPMENT BANKS.

    (a) Use of Greenhouse Gas Accounting.--The Secretary of the 
Treasury shall seek to ensure that multilateral development 
banks (as defined in section 1701(c)(4)) adopt and implement 
greenhouse gas accounting in analyzing the benefits and costs 
of individual projects (excluding those with de minimus 
greenhouse gas emissions) for which funding is sought from the 
bank.
    (b) Sense of Congress.--It is the sense of Congress that 
adopting and implementing greenhouse gas accounting includes--
          (1) calculating net greenhouse gas flows;
          (2) establishing uniform calculation techniques, with 
        provision for modification as professional standards 
        evolve;
          (3) making public the calculation techniques and 
        calculations;
          (4) measuring greenhouse gas emissions of individual 
        projects;
          (5) considering global social costs of the emissions 
        when evaluating the economic cost benefit of such 
        projects; and
          (6) performing greenhouse gas accounting for each 
        such project.
    (c) Expansion of Climate Change Mitigation Activities.--The 
Secretary of the Treasury shall work to ensure that the 
multilateral development banks (as defined in section 
1701(c)(4)) expand their activities supporting climate change 
mitigation by--
          (1) expending support for investments in energy 
        efficiency and renewable energy;
          (2) reviewing all proposed infrastructure investments 
        to ensure that all opportunities for integrating viable 
        energy efficiency measures have been considered;
          (3) increasing the dialogue with the governments of 
        developing countries regarding--
                  (A) analysis and policy measures needed for 
                low carbon emission economic development; and
                  (B) reforms needed to promote private sector 
                engagement in renewable and energy efficiency 
                investments; and
          (4) integrate low carbon emission economic 
        development objectives into multilateral development 
        bank country strategies.
    (d) Report to Congress.--Not later than 1 year after the 
date of the enactment of this section, and annually thereafter, 
the Secretary of the Treasury shall submit a report on the 
status of efforts to implement this section to the Committee on 
Foreign Relations of the Senate and the Committee on Financial 
Services of the House of Representatives.

                                  
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