U . S . D E PA R T M E N T O F T H E T R E A S U R Y 

I NTE R NATIONAL PROG RAM S

J U STI F I CATI O N FO R AP P R O P R IATI O N S

F Y 2 0 1 2 B U D G E T R E Q U E S T 
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TAB LE OF CONTE NTS

TABLE OF CONTENTS

Treasury International Programs

Justification for Appropriations

FY 2012 Budget Request

LETTER FROM THE SECRETARY .

EXECUTIVE SUMMARY .

TABLES: APPROPRIATIONS REQUEST AND ARREARS .

POVERTY REDUCTION AND ECONOMIC GROWTH . 

The World Bank Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

International Development Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

International Bank for Reconstruction and Development . . . . . . . . . . . . . . . . . . . . . . . . . 1

International Finance Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

African Development Bank Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

African Development Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

African Development Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Asian Development Bank Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Asian Development Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Asian Development Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Inter-American Development Bank Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Inter-American Development Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Multilateral Investment Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Inter-American Investment Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

European Bank for Reconstruction and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

FOOD SECURITY . 

The Global Agriculture and Food Security Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

International Fund for Agricultural Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
T R E A S U R Y I N T E R N A T I O N A L P R O G R A M S

CLIMATE CHANGE AND THE ENVIRONMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Clean Technology Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Strategic Climate Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41

Global Environment Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42

Tropical Forest Conservation Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43

DEBT RELIEF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Enhanced Heavily Indebted Poor Countries Initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Multilateral Debt Relief Initiative for IDA15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47

Multilateral Debt Relief Initiative for IDA16 and AfDF12 . . . . . . . . . . . . . . . . . . . . . . . . . .47

OFFICE OF TECHNICAL ASSISTANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Treasury International Affairs Technical Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

MDB BASICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

AUTHORIZATION REQUESTS FOR FY 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

ii

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LET TE R FROM TH E SECR ETARY

LETTER FROM THE SECRETARY

DEPARTMENT OF THE TREASURY

WASHINGTON, DC

Dear Member:

On behalf of President Obama, it is my pleasure to submit the Congressional Presentation Document for the Department of the Treasury’s International Programs for Fiscal Year 2012.

Treasury’s Fiscal Year 2012 request for International Programs reflects an extraordinary and unprecedented confluence of financing needs for the Multilateral Development Banks (MDBs), stemming from their aggressive and proactive response to the global financial crisis, as well as the urgent 

imperative to address critical global challenges such as food security and climate change. Because 

the MDBs are the primary source of support and development assistance to the world’s poorest 

and most vulnerable nations, and critical partners in fulfilling many of the United States’ national 

security, economic, and diplomatic priorities, a failure to respond to these pressing financing needs 

risks setting back progress on a range of U.S. policy goals in every corner of the world.

The need for new capital by the MDBs results in large part from the global financial crisis. Such 

needs are exceptional – this is the first request for new capital by any MDB in over a decade and 

marks the only time since the creation of the MDBs that we have faced simultaneous capital requests from all banks. These requests coincide with scheduled, recurring replenishments for the 

special facilities housed at the World Bank and African Development Bank that provide grants and 

low-cost loans to the world’s poorest countries. 

In the current, challenging budgetary environment, funding these requests represents a cost-effective approach to supporting our short- and long-term economic, political, and security objectives 

for the following reasons: 

First, we depend on the MDBs to support development and reform in countries of strategic importance. For example, in Afghanistan and Pakistan, the MDBs are investing heavily in key sectors, 

such as water, power, and transportation, which are needed to underpin long-term stability. In this 

context, it is important to recognize that only the MDBs have the resources and technical capacity 

to finance infrastructure projects globally, as costs typically run into the hundreds of millions of 

dollars. As bilateral programs of other resource-constrained development partners are scaled back, 

the world will be relying even more heavily on MDBs to fill the gap.

Second, the MDBs are uniquely designed to help us address critical global priorities such as food 

security and climate change. These complex challenges, which know no geographic boundaries, 

imperil our prospects for global prosperity and poverty reduction if left unaddressed. And, be-
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cause of the diffuse nature of the challenges, they can be addressed successfully via multilateral 

channels, through which all countries own the challenges and the tools needed to meet them. 

Third, American taxpayers get excellent returns on our investments in the MDBs. For each dollar we provide to the World Bank, the institution can lend $25 to developing countries around 

the world. This burden-sharing, combined with strong U.S. leadership on MDB policies and governance, means that we can leverage billions of donor dollars for U.S. priorities, such as Africa, 

Afghanistan, Pakistan, and Haiti.  We anticipate that these commitments by the United States and 

other shareholders will provide sufficient resources for the MDBs to fulfill their missions for years 

to come. 

Fourth, supporting the MDBs enables them to cushion the poor against the full impact of external 

shocks, as demonstrated during the global financial crisis when these institutions augmented support for domestic social safety nets, including education, health and anti-poverty programs. To 

ensure their capacity to continue supporting the ongoing, but fragile, global recovery and to protect 

and improve the lives of the world’s poor, we must provide them with additional resources today. 

Finally, by supporting growth in poor and emerging economies, we are fostering the next generation of business opportunities, jobs, and economic partnerships for our own citizens. In short, our 

investments in the MDBs help generate new engines of growth that benefit U.S. workers and the 

U.S. economy as a whole. 

I look forward to working with you on this important request and welcome your collaboration 

and engagement.

Sincerely,

Timothy F. Geithner

LET TE R FROM TH E SECR ETARY
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T R E A S U R Y I N T E R N A T I O N A L P R O G R A M S

“Together, we can deliver [... d]evelopment that offers a path out of poverty for that child who deserves better.  Development that builds the capacity of countries to deliver the health care and education that their people need.  Development that unleashes broader prosperity and builds the next 

generation of entrepreneurs and emerging economies.  Development rooted in shared responsibility, mutual accountability and, most of all, concrete results that pull communities and countries

from poverty to prosperity.” 

President Barack Obama (September 22, 2010)

“These institutions [the multilateral development banks] have reflected a shared vision of growth and 

development through political freedom and economic opportunity....This vision has become reality for 

many of us. Let us pledge to continue working together to ensure that it becomes reality for all.”

President Ronald Reagan (September 29, 1981) 

“[The World Bank’s] IDA is the glue to coordinate donor efforts and ensure the systems and capacity are in place to build on results and sustain long term progress toward achieving the [Millenium 

Development Goals]. While fiscal times are tough, we can’t forget the nuts and bolts of development. 

IDA is one of the most effective tools in getting countries on track for economic growth and povertyreduction. “

The ONE Campaign (December 7, 2010)

“...the African Development Bank has taken several giant and impressive steps toward fulfilling its 

ambitious mission..[it] has clearly articulated a strategic vision, substantially shifted its loan portfolio 

to reflect this plan, and asserted leadership on a range of global issues critical to the future of Africa.”

The Center for Global Development (May 2010)

 “We cannot defeat the ideologies of violent extremism when hundreds of millions of young people face 

a future with no jobs, no hope and no meaningful opportunities. Nor can we build a stable, global 

economy when hundreds of millions of workers find themselves on the wrong side of globalization.”

Secretary of State Hillary Rodham Clinton (January 6, 2010)

“Development and security are inextricably linked. You can’t have development without security and 

you can’t have security without development.”

Secretary of Defense Robert Gates (September 28, 2010)
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EXECUTIVE SUMMARY

Extraordinary Circumstances

Treasury submits its FY 2012 International Programs request recognizing the difficult choices facing the 112th Congress, while also seeking to meet an extraordinary and unprecedented confluence 

of financing needs for the Multilateral Development Banks (MDBs). 

The MDB response to the worst financial crisis since the Great Depression was one of the most effective development interventions in generations due to its timing and scope. With more than $222 

billion mobilized, millions of the world’s poor were insulated from the full impact of the crisis, and 

economies of vital importance for U.S. exports have performed better than they would have absent 

this support. However, as a result of this robust response, the MDBs now face a funding shortfall, 

compelling them to seek new financial resources from their member countries or face precipitous 

drops in lending levels. This marks the first capital increase for a MDB in over a decade and the first 

time that all of the MDBs have faced the need for new capital at the same time.

Treasury’s request also includes the latest replenishments of the International Development Association (IDA) in the World Bank and the African Development Fund (AfDF) in the African Development Bank. These recurring replenishments are renewed on a three-year basis due to the large 

grant element in the financing these funds provide to the world’s poorest countries. IDA and AfDF 

are our most important partners in meeting development needs in Africa and globally, and they 

are recognized leaders in improving education, aiding women and children, and strengthening 

basic services in these countries. Their performance-driven investments are fundamentally aimed 

at creating the basis for lasting economic growth and development in low income countries so that 

these countries can move permanently from aid dependency to self-sufficiency. In each case, U.S. 

commitments leveraged more than the proportional increase in overall resources for these funds. 

In addition, Treasury’s request includes funding that will enable the MDBs to respond to critical 

global priorities, such as food security and climate change, which can be addressed most effectively 

through multilateral vehicles. The recent increases in food commodity prices – in some cases 

exceeding their 2008 highs – underscore the importance of boosting food supplies, particularly in 

poor countries where higher food prices have dramatic and negative impacts on the livelihoods of 

poor people and create social instability. In addition, climate change must remain a priority, due 

to risks of population displacement, declines in global food supply, major shortages of water, ecosystem failures, and worsening natural disasters – effects that increase global instability and lead to 

conflict. Investments to address both the causes and effects of climate change can mitigate these 

EX ECUTIVE SU M MARY
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6

impacts and also catalyze the transition to a global clean energy economy, in turn supporting U.S. 

efforts to lead this transition with U.S. innovation, exports, and growth.

Finally, our FY 2012 budget submission will fund international debt relief commitments for the 

world’s poorest countries and sustain our bilateral efforts to improve public financial management 

in developing countries through Treasury’s highly effective Office of Technical Assistance. 

A Critical Leadership Opportunity 

Because the MDBs are the leading source of development finance globally, and critical partners in 

fulfilling many of the United States’ national security, economic, and diplomatic priorities, a failure 

to respond to these pressing financing needs risks setting back progress on a range of policy goals 

in every corner of the world. 

As a result, the United States has played a leadership role by developing a policy agenda to ensure 

that our financial contributions will be strongly leveraged by other donors and borrowers and that 

the MDBs’ investments in the developing world directly support U.S. priorities. By leading with 

this agenda, we have secured an unprecedented number of policy commitments from the MDBs 

and their other shareholders as the basis for U.S. financing commitments. For example, the United 

States’ commitment to IDA leveraged a commitment from China to pre-pay outstanding loans to 

the World Bank, which will generate over $2 billion in additional resources to support the World 

Bank’s poorest clients over the next three years. At the Inter-American Development Bank (IDB), 

the United States was instrumental in securing a commitment from middle income countries in 

the region to devote $200 million annually to Haiti from interest earned on Bank lending to these 

countries.

U.S. leadership has also delivered critical support for Afghanistan through commitments from the 

Asian Development Bank and the World Bank to extend extraordinary financing to that country. 

These banks have proved their effectiveness in operating in difficult environments like Afghanistan, 

and this augmented financing will be critical to U.S. efforts there. 

In addition, we have successfully improved the ways in which the MDBs do business to ensure effectiveness, accountability, and transparency. For example, U.S. leadership has resulted in the use of 

rigorous performance-based allocation systems, ensuring that financial support goes to countries 

where the banks have a willing partner with a track record of accountability and good policies. 

A Cost-Effective Investment in Our Future

The United States receives tremendous value from its MDB funding. Because U.S. contributions 

comprise a small share of overall MDB resources, our funding leverages far more in on-the-ground 

assistance. Treasury’s requested annual contribution to the MDBs of $3.32 billion, which represents approximately 5 percent of the 150 Account, can be expected to leverage over $100 billion 

in planned MDB development financial assistance in 2011, over $30 billion more than what was 

planned before the onset of the financial crisis.  

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EX ECUTIVE SU M MARY

In additional to the traditional leverage provided by the contributions of other MDB shareholders (both donor and borrower countries) and the MDBs’ own earnings, these institutions are increasingly leveraging private investment. Private sector co-financing of Asian Development Bank 

projects has grown 14 times over five years. The African Development Bank’s private sector fund 

will support total investments nearly 26 times the initial size of approvals by leveraging private cofinanciers and other development finance institutions. 

With U.S. contributions supporting much higher levels of on-the-ground investment, the MDBs 

ultimately can deliver a very high return on U.S. taxpayer funds. With sustained investments in 

low income countries, the MDBs are helping to create the next generation of emerging market 

countries, which in turn will create important new markets for U.S. exports and create jobs here at 

home. The developing world represents the fastest source of growth in U.S. exports and the MDBs 

are helping to drive that growth.

Finally, our contributions to the MDBs provide an important and unique benefit in terms of our national security. For example, in Afghanistan and Pakistan, the MDBs are investing heavily in major 

sectors, such as water, power and transportation, which are needed to underpin long term stability. 

In this context, it is important to recognize that only the MDBs have the resources and technical 

capacity to finance infrastructure projects globally, as costs typically run into the hundreds of millions of dollars, and that as bilateral programs of other resource-constrained development partners 

are scaled back, we will be relying even more heavily on the MDBs to fill the gap. 

Our Most Effective Development Partners

External experts have long recognized the MDBs as providing high quality assistance to developing 

countries. This view was most recently expressed in the independent Quality of Official Development Effectiveness Assessment (QuODA), a comprehensive survey of development institutions 

that ranked MDBs highly in maximizing efficiency, fostering local institutions, and reducing transaction costs. Similarly, in its 2008 and 2010 Reports on Multilateral Aid, the Organization for Economic Cooperation and Development’s (OECD’s) Development Assistance Committee has found 

that, relative to bilateral agencies as a whole, multilaterals more effectively target aid to the poorest 

countries and provide aid more efficiently. 

The MDBs’ unique ability to leverage donor contributions gives them the scale to reach every part 

of the developing world. Together, the MDBs comprise the largest source of development finance 

in the world’s poorest countries and are the leading source of support for critical sectors, such as 

water, transportation, and education. This size enables significant economies of scale, but it also allows the MDBs to become knowledge centers and to understand what works and replicate it across 

the globe. This expertise also gives the MDBs a unique ability to engage with candor and credibility 

about the toughest development challenges. 

Finally, it is important to recognize that the MDBs are uniquely positioned to finance major infrastructure projects – which are often key to unlocking growth potential in developing and emerging markets – and do so in conjunction with policy reforms as well as social and environmental 

safeguards. 
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8 EX ECUTIVE SU M MARY

A New, Coordinated Approach to Development

Treasury’s FY 2012 request reflects a new, coordinated U.S. government strategy designed to promote development objectives. The Presidential Policy Directive on Global Development – the culmination of months of interagency research and debate – concludes that we should “redouble our 

efforts to support, reform, and modernize multilateral development organizations most critical 

to our interests,” and to that end, “renew our leadership in the multilateral development banks.” 

The FY 2012 request includes $27 billion to achieve the goals outlined in the PPD by supporting 

programs focused on sustainable development, economic growth, democratic governance, gamechanging development innovations, and sustainable systems for meeting basic human needs. Treasury’s budget request, 90 percent of which is channeled through the MDBs, directly supports this 

call.

A key outcome of the new Directive is the President’s Partnerships for Growth (PfG), a strategy 

which calls for enhanced engagement in countries that have demonstrated a strong commitment 

to market-oriented and growth enhancing policies. For the initial PfG candidates – El Salvador, 

Ghana, the Philippines and Tanzania – Treasury will advocate, explore and pursue mechanisms 

to better coordinate USG engagement in these countries with that of the MDBs, and look for new 

opportunities for the MDBs to focus on the constraints identified and to better coordinate donor 

operations. In addition, we will seek to work with PfG countries to pursue various opportunities 

within the MDBs, including trust fund access and engagement with each MDB’s private sector 

window. 

We are confident that this effort has good prospects for success because the MBDs already have collaborative partnerships across the full range of Treasury and MDB engagements. In Mozambique, 

for example, Treasury, USAID, the Millennium Challenge Corporation and the African Development Bank are working together on an initiative to bring together public and private financing to 

enhance energy access in the region. And in Afghanistan, the Asian Development Bank (AsDB) 

is pursuing a partnership with the U.S. Army Corps of Engineers to oversee critical rehabilitation 

and construction efforts on Afghanistan’s “Ring Road.” Last year, Generals Petraeus and McNabb 

underscored the ability of the AsDB to support U.S. priorities on the ground. In a letter to Secretary 

Geithner from May 2010, they wrote: “...both United States Transportation Command and United 

States Central Command are eyewitnesses to the valuable contributions the AsDB is making in a 

region of great importance to the United States.”
AUTHOR IZATION R EQU ESTS 9

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TABLES: APPROPRIATIONS REQUEST AND ARREARS

Summary of Appropriations and Requests

Treasury International Programs

FY2010-FY2012 (in millions of $)

FY 2010

Approp.

FY 2011

CR Level

FY 2012

Request

FY 2012

Request

Full Numbers

Poverty Reduction and Economic Growth (MDBs)

International Development Association (IDA) 1,262.5 1,262.5 1,358.5 1,358,500,

Int’l Bank for Reconstruction and Development (IBRD) 117.4 117,364,34

Inter-American Development Bank (IDB and FSO) 102.0 102,018,03

Multilateral Investment Fund (MIF) 25.0 25.0 25.0 25,000,

Inter-American Investment Corporation (IIC) 4.7 4.7 20.4 20,428,

Asian Development Bank (AsDB) 0.0 106.6 106,585,8

Asian Development Fund (AsDF) 105.0 105.0 115.3 115,250,

African Development Bank (AfDB) 32.4 32,417,72

African Development Fund (AfDF) 155.0 155.0 195.0 195,000,

European Bank for Reconstruction & Development (EBRD) 0.0 

Subtotal 1,552.2 1,552.2 2,072.6 2,072,564,

Food Security

Global Agriculture and Food Security Program (GAFSP) * 0.0 308.0 308,000,0

Int’l Fund for Agricultural Development (IFAD) 30.0 30.0 30.0 30,000,

Subtotal 30.0 30.0 338.0 338,000,

Combating Climate Change and Environmental Degradation

Clean Technology Fund (CTF) 300.0 300.0 400.0 400,000,

Strategic Climate Fund (SCF) 75.0 75

 Pilot Program for Climate Resilience (PPRC) 40.0 40,000,00

 Forest Investment Program (FIP) 130.0 130,000,00

 Scaling-Up Renewable Energy Program (SREP) 20.0 20,000,00

Global Environment Facility (GEF) 86.5 86.5 143.8 143,750,

Tropical Forest Conservation Act (TFCA) 20.0 20.0 15.0 15,000,

Subtotal 481.5 481.5 748.8 748,750,

Debt Relief

Bilateral Debt Reduction/HIPC Trust Fund 40.0 40.0 0.

Multilateral Debt Relief Initiative (MDRI) for IDA15** 91.0 91,000,00

MDRI for IDA16, AfDF12*** 83.5 83,500,00

Subtotal 40.0 40.0 174.5 174,500,

Technical Assistance

Treasury Office of Technical Assistance 25.0 25.0 30.1 30,120,

TOTAL TREASURY REQUEST 2,128.7 2,128.7 3,363.9 3,363,934,466

* In FY 2010, the U.S. Agency for International Development transferred $66.6 million in Development Assistance funds to Treasury for payment to 

the Global Agriculture and Food Security Fund.

** This funding will both meet the U.S.’s remaining commitment to MDRI under IDA15 and cancel IDA15 arrears, assuming full funding of IDA’s 

FY2011 request.

*** $76 million is for the FY 2012 IDA16 MDRI commitment and $7.5 million is for the FY 2012 AfDF MDRI commitment. 

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Summary of Arrears

Multilateral Development Banks

FY2001 - FY2011

(Budget Authority; in $)

MDBs

Arrears

end-FY2001

Arrears

end-FY2002

Arrears

end-FY2003

Arrears

end-FY2004

Arrears

end-FY2005

Arrears

end-FY2006

Arrears

end-FY2007

Arrears

end-FY2008

Arrears

end-FY2009

Arrears

end-FY2010

Arrears

end-FY2011*

IDA 62,275,000 73,015,000 78,540,000 120,727,880 327,527,880 337,027,880 377,877,880 385,572,880 505,572,880 478,072,880 450,572,880

MIGA 6,022,000 10,892,087 9,271,689 8,154,321 8,154,321 6,867,321 6,867,321 6,867,321 6,867,321 6,867,321 6,867,321

AfDF 220,000 220,000 10,849,144 16,789,221 29,637,221 30,994,221 32,351,221 33,366,261 39,421,261 40,476,261 41,416,261

AfDB 13,420 13,420 42,126 67,315 619,934 2,036,730 3,453,526 1,433,026 631,375 615,239 615,239

AsDF 128,175,450 133,158,400 138,908,527 98,339,611 102,139,611 118,389,611 134,639,611 175,345,350 185,595,350 195,845,350 206,095,350

AsDB 0 0 0 0 0 0 0 0 0 0 106,585,848

MIF 88,772,000 88,772,000 64,341,172 39,488,672 28,576,672 26,852,572 50,128,472 50,330,972 50,330,972 50,330,972 50,330,972

IIC 9,055,000 16,055,000 22,822,619 47,822,619 47,822,619 46,098,519 46,098,519 46,098,519 46,098,519 41,428,519 36,758,519

IFAD 11,000 11,000 104,857 189,339 309,339 459,339 3,609,339 3,683,722 3,683,722 3,683,722 3,683,722

GEF 203,937,600 210,937,600 171,585,848 140,668,364 141,528,364 169,828,364 170,628,364 169,527,644 169,527,644 163,027,644 220,277,644

EBRD 0 0 232,732 441,776 725,225 10,157 10,157 0 0 0 0

TOTAL 498,481,470 533,074,507 496,698,714 472,689,118 687,041,186 738,564,714 825,664,410 872,225,695 1,007,729,044 980,347,908 1,123,203,756 

*	

Note:	The

End-FY2011	figures	assume	a	U.S.	contribution	at	the	annualized	CR	level	and	no	payment	to	the	AsDF	due	to	lack	of	authorization

	amount	of	AfDB	arrears	($615,239)	corresponds	to	the	51	capital	shares	from	GCI-V	forfeited	by	the	United	States.		

The	United	States	has	not	had	arrears	to	the	IBRD,	IFC,	IDB	or	IDB	FSO,	or	NADBank	during	the	FY2001-FY2011	period.	

AR R EARS
AUTHOR IZATION R EQU ESTS 11

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POVE RTY R E DUCTION AN D ECONOM IC G ROWTH

POVERTY REDUCTION AND

 ECONOMIC GROWTH

The World Bank Group

“When years from now, the story is told about how Liberia overcame the immense challenges it 

faced, a golden page will be dedicated to the role of the World Bank.”

Augustine Ngafuan, Finance Minister of Liberia, January 2009

International Development Association 

International Development Association (IDA) Request: $1,358.5 million

First of three installments

Last Replenishment: 2009

Treasury requests $1,358.5 million for the first of three annual payments to the 16th replenishment 

of the International Development Association (IDA16). IDA is a facility within the World Bank 

Group that makes highly concessional loans and grants to the world’s 79 poorest countries – home 

to 2.5 billion people – and is the centerpiece of U.S. multilateral development assistance. No other 

development facility has IDA’s global reach or capacity – it is the single largest source of development finance globally across a range of sectors, addressing primary education, basic health services, 

clean water and sanitation, environmental safeguards, business climate improvements, infrastructure and institutional reforms. 

IDA’s 2010 commitments reached a record $15 billion, and during the last decade IDA funding 

has helped save at least 13 million lives. Achievements over this period included: immunizing 

over 310 million children, building over 73,000 miles of roads (enough to circle the globe nearly 

three times), constructing and renovating 23,000 health facilities, and providing access to water 

and sanitation for over 177 million people. In addition, the examples below provide a snapshot of 

IDA’s important work: 

• In 2003, IDA launched a Social Investment Program Project to benefit the poorest people in 

Bangladesh by financing local infrastructure, basic services, and livelihood opportunities. 
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Since then, over 350,000 households (representing around 3.5 million people, in about 1,000 

villages) have benefited from this program through access to drinking water, roads and bridges, 

as well as to credit, markets, and opportunities for income generation.

• In Cambodia, IDA is helping to finance a Land Allocation Project which provides land, livelihood support, infrastructure, schools, health centers, and markets to poor and land-poor 

families in three provinces. So far, the project has given land and livelihood support to 1,254 

families. A key element of this project is its support for female-headed households, which is 

critical to improving household welfare, especially in rural areas.

• In Mongolia, an $18 million IDA project has created a new insurance market in the country 

that has led to 14,000 policies covering the livestock critical to the 30 percent of Mongolians 

who are nomadic. This type of risk management has been identified as an essential component 

of strategies designed to support smallholder farms. 

Country-specific results can be found at: http://www.worldbank.org/ida/ida_abc.html. 

IDA is also a critical resource for the world’s most fragile and vulnerable countries, such as Haiti 

and Afghanistan, where it provides resources, builds local capacity, and helps governments coordinate and manage other sources of financial assistance. For example, IDA has contributed to the 

mobilization of over 25,000 community development councils and the return of 6 million children 

to school. In addition, a $22 million IDA credit in Afghanistan helped develop the legal and regulatory regime for the telecommunications sector, which has attracted $1 billion in private investment 

and seen the cost of phone calls decline 95 percent to 10 cents/minute. 

IDA’s strong leveraging of other donor contributions and internal Bank resources make it an effective place to invest limited U.S. development resources. Every $1 contribution from the United 

States leverages almost $12 in contributions from other donors and internal Bank resources. There 

are now 51 country donors to IDA. 

The World Bank’s internal resources will be particularly strong in this three-year IDA16 period, 

comprising $17.5 billion in loan reflows (including accelerated repayments from IDA graduates 

like China) and income transfers from IBRD and IFC, compared to only $10 billion in IDA15. This 

replenishment will support over $16 billion per year in IDA lending beginning in July 2011. 

As a result of this leveraging of diverse resources, the United States is able to secure its position as the 

leading donor to IDA, and enjoy the critical policy influence that this position affords, while accounting for just 8.3 percent of the overall replenishment, down from 8.9 percent in IDA15. 

U.S. Leadersh

The United States was the driving force behind the creation of IDA in 1960 and remains its largest 

shareholder. U.S. funding for IDA has helped eradicate extreme hunger and poverty around the 

world, while also providing the United States with an opportunity to pursue initiatives that advance 

strong accountability, allocate resources based on a country’s performance, increase the provision 

of grants for heavily indebted countries, and target growth investments. 

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During negotiations for the IDA16 replenishment, the United States led efforts to reach agreement 

on new commitments by the World Bank to: 

• Accelerate the repayments of IDA loans by recent IDA “graduates” such as China.  These prepayments will generate about $2.7 billion in additional resources to support the World Bank’s 

poorest clients over the next three years ($2.1 billion of which results from prepayments from 

China).

• Create a special crisis response window to provide resources for countries hit by natural disasters, such as Haiti, as well as those who may experience severe, external economic shocks. The 

World Bank will make $2 billion available for crisis response, which will help further reduce the 

burden on U.S. bilateral aid in challenging situations. 

• Extend Afghanistan’s special status as a post-conflict country, which will allow the country to 

access substantially more funding. 

• Develop a stronger framework for project impact evaluation that will improve accountability 

and direct development resources towards successful models.

• Intensify efforts to mainstream gender into IDA projects – that is, routinely take gender issues 

into account in the full range of its work, including on policy frameworks, project design and 

country dialogue. For example, all country strategies will include analysis of gender issues, and 

results indicators will be gender-disaggregated where relevant.

U.S. leadership has helped IDA become a pioneer on initiatives to help measure – and improve – 

project impact. In 2002, IDA became the first institution to systematically aggregate project-level 

results up to the portfolio level in an effort to better measure and understand the broad-based 

impact that water, transportation, health and education projects were having in their recipient 

countries. IDA is now developing comparable indicators for urban development, information and 

communication, and small/medium enterprise. In addition, IDA has a “Results Framework” that 

measures the quality of its institutional efforts (e.g. quality of project design, problem projects restored to “satisfactory” status in 12 months). 

International Bank for Reconstruction and Development

International Bank for Reconstruction

and Development (IBRD) Request: $117.4 million

First of five installments

Last GCI: 1988

The International Bank for Reconstruction and Development (IBRD) is the largest global development institution and aims to reduce poverty in middle-income and creditworthy poorer countries 

through loans, guarantees, risk management products, and analytical and advisory services. In 

addition, the IBRD plays an especially unique and essential role in mobilizing and coordinating 

donor assistance, often to assist countries suffering the effects of natural disasters or conflict. 
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Treasury requests $117.4 million for the first of five installments of the United States capital subscription to the World Bank’s General Capital Increase (GCI), which funds IBRD. This is the first 

capital increase for the IBRD since 1988, and reflects the World Bank’s extraordinary response to 

the global financial crisis, which generated an extraordinary commitment of over $152 billion in 

lending. Of this amount, the World Bank Group has disbursed more than $96 billion, more than 

any other multilateral financial institution, and tripled its lending prioritizing the protection of social safety nets in developing countries, including education, health and anti-poverty programs. 

As a global institution, the World Bank was best positioned to respond quickly and at a scale that 

simply would not have been possible for regional or bilateral development institutions. The Bank’s 

singular ability to finance at this scale is matched by its unique store of technical expertise across a 

range of critical development sectors, from water infrastructure to the delivery of basic social services through innovative tools like conditional cash transfers.

Without the GCI, the World Bank estimates lending would fall from an average of $15 billion a year 

in real terms (the average prior to the global financial crisis) to less than $8 billion a year in FY 2012 

(July 2012-June 2013). The reduced level would be less than a third of even the most conservative 

projections of demand for lending in FY 2011, and is a small fraction of projected demand going 

forward. In addition, there are risks to U.S. leadership if we fail to meet our commitment to the 

World Bank.  Specifically, our shareholding could fall from its current level of 16.4 percent to below 

15 percent, at which point the United States would lose its ability to veto changes to the Articles of 

Agreement, the World Bank’s governing agreement and a key source of leverage.   

Our support for the capital increase will have a very strong multiplier effect, as each additional dollar of U.S. capital for the GCI will support additional lending of $25 due to burden-sharing with 

other shareholders and an increase in the Bank’s ability to borrow in the markets. 

The funding will also support lending in regions and countries that are a national priority. In Pakistan, for example, the IBRD’s loan program of $3.9 billion has supported important programs to 

aid recovery from the 2005 earthquake, provided micro credits to more than 275,000 borrowers, 

installed water systems for more than 9,000 families in Baluchistan, increased school enrollments, 

particularly among girls, and improved sanitation systems for 80 rural communities in Northern 

Pakistan. The Bank has indicated it will also provide $1 billion in support for Pakistan in the current fiscal year, of which $300 million will help finance critical imports. 

In addition, we depend heavily on the Bank to mobilize and coordinate donor responses in the 

aftermath of conflicts and/or natural disasters. For example, when tropical storm Agatha hit Guatemala in mid-2010, causing almost $1 billion in damage, the World Bank made available up to $85 

million in crisis response financing. These funds backed government rescue operations – including 

the evacuation of over 150,000 people – as well as longer-term efforts to reconstruct public infrastructure. More recently, the Bank extended $150 million in emergency support to Colombia to 

finance immediate needs related to the affects of devastating rains. And, in response to one of the 

worst natural disasters in Brazil’s history, the World Bank said it will provide a $485 million loan 

to help the government finance the relocation of families from risk areas and build new homes for 

those displaced by the mudslides. 
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Finally, the Bank has repeatedly played a highly visible role in supporting post-conflict relief efforts, 

as evidenced by their management of trust fund operations in places like Bosnia, Kosovo, East 

Timor, Iraq, and Afghanistan, among others. Going forward, the Bank is poised to take a leading 

role in supporting a comprehensive development plan to build a stable and prosperous economy in 

Southern Sudan, should it emerge as a new country. 

U.S. Leadersh

As the Bank’s leading shareholder for more than 65 years, the United States has helped shape the 

global development agenda, advancing approaches that encompass core American values, such as 

universal access to health and education, enabling environments for the private sector, policies that 

promote good governance (e.g., transparency and accountability), and a more prominent role for 

civil society. 

Since the last capital increase in 1988, our leadership in the institution has allowed us to successfully 

advocate for major changes at the World Bank, which have created a more well – managed, effective, 

transparent, and accountable Bank. Specific accomplishments include:

• More effective audit and internal control functions to enhance the Bank’s oversight and accountability;

• A substantially more expansive disclosure policy that will allow greater public access to the 

Bank’s deliberations and operations;

• The adoption of enhanced new procurement standards that ensure a balanced playing field for 

all companies seeking contracts from the Bank, including those from the United States;

• The strengthening of independent evaluation and integrity offices that are empowered to examine the Bank’s policies and impacts at arm’s length from management; and

• The creation of a special panel to which citizens concerned about a project’s impact can appeal 

for redress. 

More recently, we took advantage of this new capital increase request to secure significant new 

commitments. These include: 

• More support for the poorest. World Bank management has agreed to provide additional support for the world’s poorest clients (as opposed to the middle income borrowers) through a 

transfer of internal resources. Specifically, each $1 contributed to capital will leverage nearly $8 

in income transfers from IBRD to IDA, providing a total of $6.6 billion over the next 10 years 

for the poorest around the world. Without the capital increase, the dramatic decline in lending 

would mean that the income needed to support transfers would be absent for years to come – 

placing a greater burden for IDA contributions on the shoulders of donors.

• A greater focus on results. The World Bank has agreed to report on results using the same system that IDA (the Bank’s concessional window) recently instituted, also at our urging. Once 
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in effect, outputs achieved through IBRD financing will be aggregated and reported in a single 

concise framework. 

• Greater fiscal responsibility. The World Bank is instituting a financial framework that will consolidate all major financial and budgetary decisions to a single period in the fiscal year, forcing 

tradeoffs and improving fiscal responsibility. As a result, the interest rate that the Bank charges 

on loans will be set to cover a larger share of the Bank’s administrative budget. 

Finally, we have seen a significant – and welcome – shift in development paradigms, as reflected in 

a new candor about corruption and its effects on development, a heightened awareness to the importance of sustainability, sensitivity to environmental risks, and a sea change in engagement with 

civil society organizations. Our leadership has also spurred new special multilateral operations 

designed to promote environmental sustainability and mitigate the impact of climate change. 

International Finance Corporation

International Finance Corporation (IFC) Request: $0

Last GCI: 1991

The IFC is the private sector arm of the World Bank and fosters sustainable economic growth in 

developing countries by financing private sector investment, mobilizing capital in the international 

financial markets, and providing advisory services to businesses and governments. 

For FY 2012, Treasury requests authorization for the U.S. Governor to vote in favor of a Selective 

Capital Increase (SCI) at the IFC. Treasury is not requesting funding as part of this SCI, which is 

fundamentally intended to enhance the IFC’s legitimacy by giving developing and emerging economies greater representation and responsibilities in the institution, reflecting their increasing role in 

the global economy.

Under the SCI, U.S. voting power will decrease from 23.6 to 21 percent but we will retain veto power 

over certain key decisions, such as the ability to block any future increases in IFC’s capital stock. 

U.S. Leadersh

The United States has been a strong advocate of the IFC’s mission to promote private sector development, and played an important role in encouraging the IFC to scale-up its investments in lowincome countries and, specifically, in capital-starved conflict-ridden countries such as Afghanistan 

and Pakistan, and post-conflict countries such as Sierra-Leone and Liberia. For example, through 

its Conflict-Affected States in Africa Initiative, the IFC designed and implemented integrated strategies to support economic recovery in countries where war has destroyed economies and caused 

widespread poverty, such as the Democratic Republic of Congo, Liberia and Sierra Leone. Through 

the program’s immediate assistance and long-term support, these countries rebuild their private 

sectors, increase economic stability, reduce poverty, and return people to work.

More recently, the IFC approved a $35 million emergency investment program after the earthquake 

in Haiti to help private companies get back to business, reestablish critical services and create or 
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preserve jobs. The IFC is also financing the expansion of an important garment manufacturer in 

Northern Haiti, which will create 4,000 new jobs by the end of 2011. The IFC also structured the 

bidding for the public-private partnership that led to Haiti’s largest foreign direct investment since 

the earthquake - a $99 million investment by Viettel, a Vietnamese company, in Telecommunications d’Haiti in order to expand telecommunications services in the country. 

The United States has encouraged socially responsible investment by supporting the adoption of 

strong environmental and social safeguards. The IFC’s performance standards not only have driven the increasingly high levels of responsibility with which the IFC operates, but the standards also 

have been adopted by almost 70 private sector financial institutions. The “Equator Principles,” as 

they are known, now govern the way many of the world’s largest lenders measure and treat environmental and social sustainability. In addition, the IFC has recently identified several new opportunities to improve on these standards, including by requiring client companies to account publicly for 

green house gas emissions associated with IFC-supported investments.
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African Development Bank Group

African Development Fund 

“The steadiness of the Bank and its management under the leadership of Dr. Kaberuka in responding to the recent financial crisis and prioritization of infrastructure financing in many 

African countries is a clear manifestation of the potential the Bank has in the transformation 

process of Africa.”

Syda Bbumba, 

Ugandan Minister of Finance, Planning and Economic Development, May 2010

African Development Fund (AfDF) Request: $195 million

First of three installments

Last Replenishment: 2009

Treasury requests $195.0 million for the first of three annual payments to the twelfth replenishment 

of the African Development Fund (AfDF-12). The African Development Fund is the facility within 

the African Development Bank Group that works with the 40 poorest countries in Africa, offering 

“soft” or concessional loans and grants. With over $11 billion in financing for water, power, communication and transportation projects over the past three years, the AfDB Group is the largest 

financier of infrastructure in Africa. Moreover, because AfDF resources are significant compared 

to the limited government revenues mobilized by low-income African governments, it is playing 

an especially vital role in advancing the region’s development objectives. For example, Rwanda’s 

annual AfDF allocation is equal to almost one quarter of total government revenue. 

We have also encouraged a streamlining within the Bank to avoid duplication of other donor efforts and concentrate more directly on infrastructure, especially projects that promote regional 

integration. We believe this is the right emphasis for the Bank because infrastructure investments 

are fundamental to catalyzing the region’s growth and require substantial resources and technical 

capacity – the African Development Fund’s core strengths. Moreover, the results of the institution’s 

interventions in this area have been very promising:

• In West Africa, AfDF financing for the Nigeria-Benin Interconnection Project linked the Nigerian electricity grid to the common grid supplying Benin and Togo, enabling these two countries 

to import 40 percent of their annual electricity consumption from Nigeria, which is both more 

environmentally-friendly and affordable. The success of the Interconnection Project subsequently led to an AfDF-financed electrification project in Benin. As a result, health facilities 

can now conserve vaccines properly, new lighting in schools has boosted attendance and improved teacher and student performance, rural libraries are now offering Internet access, and 

municipal lighting has both made the streets safer and proven popular for evening studying, 

thus reinforcing educational outcomes.
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• AfDF co-financed the Kicukiro-Kirundo Road Project in Rwanda, establishing a permanent 

link between Rwanda and Burundi, helping people get goods to market and knitting together 

broader regional markets.  As part of the project, a joint border post at Nemba helped to halve 

the transit time for commercial vehicles between the two countries, while 120 kilometers of 

completed feeder roads on both sides of the border are connecting an estimated 600,000 rural 

dwellers to a major marketing corridor.

• A regional road project in Mali and Guinea increased Mali’s access to the port of Conakry, 

contributing to a tenfold increase in trade volume at the Conakry port and reduced the border 

crossing time from 6 hours to 15 minutes.

The AfDF is also a flexible organization that has proven capable of employing its comparative advantage in infrastructure to address emerging priorities, such as food security and climate change.  

For example, AfDF’s Smallholder Irrigation Project in Malawi supported a farmer-managed scheme 

to improve water management and train farmers in improving the way they manage water collectively. The project contributed to impressive results: between 2000 and 2008, maize yields in the 

valleys increased threefold from 1.0 to 3.5 tons per hectare. Valley farmers have gone on to establish 

credit cooperatives to diversify their livelihoods into areas like agro-processing, taking advantage of 

small-scale electricity generation also funded through the project. The Bank’s pipeline of upcoming projects includes a focus on agricultural infrastructure with recent projects in Tanzania and 

Cameroon.

Additionally, the AfDF’s Fragile States Facility is helping meet the extraordinary infrastructure and 

governance needs of countries emerging from conflict, such as Sierra Leone, where AfDB funding 

to rehabilitate hydroelectric generation helped reduce power costs in the country by 60 percent and 

provided new access to 8,000 customers. This assistance helps reduce the risk that fragile states slip 

back into conflict, which creates higher long-run costs in terms of humanitarian needs and security 

vacuums.

The AfDF is an important partner in U.S. whole-of-government approaches to meeting development challenges in Africa.  For example, road infrastructure needs are enormous, and effective solutions require cooperation from multiple donors.  In Tanzania, the AfDF is financing the upgrading of 193 kilometers of unpaved road between Namtumbo and Tunduru.  The road will directly 

connect with the upgraded Namtumbo-Songea-Mbamba Bay Road financed by the Millennium 

Challenge Corporation, greatly enhancing the value of this MCC investment.  Together, these projects will help complete the corridor linking ports on Lake Malawi to the coast.  In addition, the 

AfDF project is providing HIV/AIDS and road safety awareness training to 35 villages and 44 primary and secondary schools along the route. 

The AfDF’s leveraging of other donor contributions and internal Bank resources make it an effective place to invest limited U.S. development resources. Each $1 contributed by the United States 

leverages about $15 in contributions from other donors and the AfDB. This replenishment will 

support about $3 billion per year in new project approvals from 2011-2013. 
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U.S. Leadersh

The United States is the largest AfDF shareholder, reflecting our strong and enduring commitment 

to provide basic humanitarian aid and enhance growth and prosperity in the poorest region of the 

world. The United States has a vested interest in supporting the region’s growth because its economies have the potential to become vibrant partners for our businesses, farmers, and workers, and 

will help create a more dynamic cycle of opportunity on both continents. Additionally, U.S. support 

for the AfDF helps fragile nations, such as Liberia, grow out of conflict and instability. 

The United States has been a leading voice for initiatives to maximize the AfDF’s effectiveness and 

we have recently helped secure a number of new policies, including strengthened environmental 

and social safeguards, the adoption of common development measurement indicators, stronger 

quality control on project design and country strategy development, and a stronger independent 

evaluation group.

African Development Bank 

African Development Bank (AfDB) Request: $32.4 million

First of eight installments

Last GCI: 1999

The African Development Bank (AfDB) is the hard loan window that makes public sector loans to 

the 15 middle-income countries in Africa and private sector loans to both middle- and low-income 

countries at rates well below what these countries could access independently. Through its support 

for growth in Africa’s middle-income countries, the AfDB is helping solidify new democracies, 

creating stable societies than can govern effectively and meet the needs of the people. In addition, 

it is helping create a new generation of markets for U.S. businesses and workers and enhancing the 

region’s capacity to move beyond aid in coming generations. 

Treasury requests $32.4 million for the first of eight annual payments to the Sixth General Capital 

Increase of the AfDB. Shareholders agreed to a capital increase for this window for the first time 

since 1999 to avoid what would otherwise be a 50 percent drop in lending levels to under $1 billion 

per year and because of the significant improvements in the quality and focus of Bank programs in 

recent years. When completed, this general capital increase (GCI) will enable the Bank to increase 

its lending capacity to more than $5 billion per year.  These resources will help address the enormous infrastructure gap which is holding back economic growth and poverty reduction in Africa, 

where one in four people does not have access to electricity, the need for back-up generators can 

triple or quadruple electricity costs for struggling firms, and transportation costs are twice as high 

as those for a typical Asian country.

U.S. capital contributions to the AfDB ($32.4 million each year for eight years) will translate into 

lending levels 25 times as high, due to burden-sharing with other shareholders and the Bank’s ability to borrow in the markets. 

As with the concessional window (the African Development Fund), the United States has encouraged a strategic focus on infrastructure, especially to support regional integration. In addition, 
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we have advocated for a heightened focus on private sector development, including in low-income 

countries and fragile states.  As illustrated by the following examples, the African Development 

Bank has oriented its portfolio to reflect these priorities and is achieving important development 

results:

• Two recent AfDB power projects installed 2800 MW of capacity and upgraded transmission 

lines, providing over 52,000 people with a new electricity connection. 

• Bank financing of the construction and rehabilitation of nearly 1,300 primary, secondary and 

tertiary health centers, provision of new equipment, and training of over 13,000 health professionals benefitted 6.5 million people.

• Eight recent agriculture projects financed over 1,700 km of feeder roads, 49 rural marketing 

facilities, over 280 social facilities (rural schools, health centers), improved water management 

systems on 50,000 hectares of land, and vaccination of 2,000 head of livestock. 

• A $60 million investment from the AfDB in 2009 helped finance 7,000 kilometers of submarine 

fiber optic cable from Portugal to Accra in Ghana, and Lagos in Nigeria, completed in October 

2010. The system includes subsequent branching units to the Canary Islands, Morocco, Senegal, and Côte d’Ivoire. 

Due to U.S. engagement and leadership, the AfDB has also internalized our interest in climate resilience and low-carbon development projects. For example, the Bank has integrated tree planting 

into its road building projects, and is increasingly focused on developing renewable energy projects, 

such as the Lake Turkana Wind Farm project in Kenya. In addition, a series of AfDB projects in 

Morocco’s electricity sector, including a $97 million solar thermal power plant project, is helping 

the country diversify its energy sources by increasing its renewable energy potential and strengthening power grid interconnections to facilitate electricity imports from neighboring countries.

U.S. Leadersh

The United States has been a shareholder in the AfDB since 1983 when the Bank was opened to 

non-regional shareholders. During the recent negotiations for the GCI, the United States’ leadership position and engagement helped secure a robust set of policy commitments related to the 

AfDB’s finances and operations. Among them were:

• An updated financial framework, which has already generated about $4 billion in additional 

lending opportunities, and is permitting more effective leveraging of new capital; 

• An increase in loan charges to ensure cost-sharing between donor and borrowing countries; 

• A new, comprehensive financial model that will better integrate decisions on loan pricing, administrative expenses, net income allocation (including increased transfers to the Bank’s concessional window, the African Development Fund), and capital adequacy; 
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• Stronger risk management functions to safeguard AfDB resources, with particular attention to 

risks associated with private sector operations in low-income countries with weak investment 

climates; 

• A more expansive disclosure policy and practice to meet the highest standards that will include 

strengthening the presumption of disclosure by eliminating the positive list and emphasizing a 

limited negative list; and

• A Bank-wide “results framework” that measures progress toward high-level development outcomes (e.g., the percentage of rural population that can access an all-season road or how many 

people gained access to an improved water source) and Bank effectiveness and efficiency, such 

as the amount of time needed to complete bids.
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Asian Development Bank Group

Asian Development Fund

“...Both United States Transportation Command and United States Central Command are eyewitnesses to the valuable contributions the Asian Development Bank is making in a region of 

great importance to the United States.”

General David Petraeus and General Duncan McNabb, 

Memorandum for the Secretary of the Treasury, May 2010

Asian Development Fund (AsDF) Request: $115.3 million

Third of four installments

Start of current Replenishment: 2010

The Asian Development Fund is the premier provider of development finance for the poorest countries in the Asia-Pacific region. Successful financing for core infrastructure – which is the AsDF’s 

focus – is critical to relieving a major bottleneck for growth. For member countries with low per 

capita income and limited access to financial markets, the AsDF is an absolutely vital source of 

financing. For FY 2012, Treasury requests $115.3 million for the third installment of a four-year 

commitment under the agreement of the ninth replenishment of the AsDF (AsDF10).

 The AsDF leverages donor contributions through the use of co-financing, which has increased 

three-fold since 2004, to approximately $284 million in 2009. The United States’ contribution to 

AsDF10 is leveraged by a factor of nearly 24 in other funding, stretching each dollar invested in the 

Fund. 

U.S. Leadershi

The U.S. has successfully directed the AsDF’s resources towards infrastructure finance in U.S. priority countries, including Afghanistan where the AsDF is the third largest donor. For example:

• The AsDF is investing heavily in the Afghan energy sector which will enable 65 percent of urban households and 25 percent of rural households gain access to power. Moreover, the expansion of electrical capacity in combination with other AsDF investments in irrigation capacity 

is expected to lead to an annual increase in agricultural output of 6 percent per year and in 

agricultural exports of 9 percent per year through 2015. 

• In 2010, the AsDF completed the construction of Afghanistan’s first railway, the HairatanMazar-e-Sharif Railway. Commercial operations are expected to begin in 2011, and will provide trade connections to Europe through Central Asia. 
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The Asian Development Fund’s activities have been recognized by the United States national security 

community as critical to the success of our political and security objectives in Afghanistan. 

To help manage risks in challenging environments like Afghanistan, its work is monitored, tracked 

and assessed by one of the most advanced systems in the MDBs. Tools for enforcement include 

frequent site visits, tracking of disbursements, financial audits and strict sanctioning of violators. 

And, due to the vigorous enforcement of the AsDB’s anti-corruption policies, the AsDB sanctioned 

46 individuals and 35 firms, and carried out five project procurement related reviews in 2010 

alone. 

Finally, the United States was instrumental in persuading the AsDF to adopt a new grants framework to support debt sustainability in the poorest countries, an important tool to reducing the 

lend-and-forgive cycles that have crippled many development efforts. As a result, approximately 

20 percent of the AsDF’s resources are being distributed as grants, compared to only five percent 

under the last replenishment. 

Asian Development Bank

Asian Development Bank (AsDB) Request: $106.6 million

Second of five installments

Last GCI: 1994

The Asian Development Bank provides loans, technical support and policy advice to creditworthy 

but needy countries in Asia. The AsDB’s comparative advantage is infrastructure finance in core 

sectors such as as energy, transport, and water, which typically comprise 80 percent or more of 

AsDB operations in a given year.

For FY 2012, Treasury requests $106.6 million for the second of five capital contributions for the 

fifth capital increase of the AsDB (GCI V). In 2009, the Asian Development Bank sought support 

for a 200 percent capital increase – its first in 15 years - to forestall a dramatic drop in lending from 

$10 billion annually to $4 billion. Shareholders agreed that new capital was necessary to ensure an 

adequate level of development assistance to the region with the world’s largest number of people 

living in absolute poverty. In addition, the United States supported the request because we wanted 

to ensure that ample resources would remain available to reinforce stabilization efforts in Pakistan. 

The U.S. contribution to the AsDB GCI will be leveraged by a factor of more than 6 through the 

contributions of other shareholders. 

As with the Asian Development Fund (the Bank’s low-interest loan window for poor countries), 

we have been able to direct resources to priority countries, such as the tsunami-affected countries 

like Indonesia and, more recently, to Pakistan where the Asian Development Bank is a major donor. For example, the AsDB is Pakistan’s largest development partner in the energy sector and has 

made four large, long-term investment agreements totaling $2.9 billion. These investments should 

help address major distortions and inefficiencies in energy generation, power transmission, and 

tariff schemes, all of which are key impediments to Pakistan’s economic growth and the lives of its 

people. 
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The water sector and irrigation is another significant target of AsDB’s assistance program for Pakistan where an ongoing $900 million multi-year, multi-tranche facility is helping revamp and modernize irrigation infrastructure and improve agricultural productivity in Punjab. Similar facilities 

are planned for the Sindh province and the North West Frontier province. Finally, the AsDB is 

supporting large road transport projects in Pakistan, including a national trade corridor. 

U.S. Leadershi

The United States has been a leading shareholder of the Asian Development Bank since it was 

established in 1966 and our leadership in the Bank has had a significant impact on its policies. In 

fact, U.S. engagement and leadership during the capital increase negotiations enabled us to leverage 

meaningful changes within the Bank to direct more resources to the poor, strengthen safeguards, 

increase civil society participation, improve internal accountability, and measure results: 

• More resources for poor countries. U.S. leadership has been integral to increasing the share of 

the Bank’s net income (i.e., profits) to the Asian Development Fund (AsDF), the Bank’s facility 

for its poorest borrowers. This has led to a tripling of the net income allocation to the AsDF to 

$120 million annually.

• Stronger Environmental Safeguards. In 2010, the Bank revised its safeguards policy, which 

strengthens protections and harmonizes with the safeguard policies of other MDBs (particularly the World Bank and the International Finance Corporation). As a result, the ASDB requires disclosure of an environment impact assessment at least 120 days prior to the Board vote 

on the associated project, consistent with the Pelosi Amendment’s requirements on environmental 

due diligence. Since the adoption of the new AsDB safeguards policy in January 2010, environmental mainstreaming has become an integral part of the institution’s project design.

• A greater role for civil society. The Bank has strengthened partnership and cooperation with 

civil society organizations. As a result, the proportion of sovereign operations that included 

participation with civil society institutions averaged 75 percent in the last three years, and cofinancing grew to $3.6 billion in 2010, up from $3.3 billion in 2009. 

• Better oversight and accountability. The AsDB has taken important steps to strengthen risk 

management practices through increased technical staffing and better integration of risk management into project design. The AsDB has also established an Office of Anticorruption and Integrity (OAI), agreed to greater independence for the Bank’s audit function, and strengthened 

the AsDB’s Whistleblower Policy. Finally, the AsDB has improved the level of transparency in 

publication of sanctioned firms and entities, including cross-debarment with other MDBs. 

• Focusing on results. Finally, the AsDB has been among the most proactive of the MDBs in devising and implementing a new framework aimed at measuring project implementation and 

outcomes. Specifically, the AsDB has expedited the use of improved performance reporting 

systems to monitor implementation, has introduced innovative methodologies to mainstream 

gender considerations into operations, and, in line with the AsDB’s new human resources management, strengthened staff resources dedicated to project design. In addition, the Country 
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26 POVE RTY R E DUCTION AN D ECONOM IC G ROWTH

Partnership Strategies (CPSs) are now results-based, which means more effective monitoring 

and evaluation processes and dissemination of best practices and lessons learned. AsDB reports annually on progress of the results agenda, including for AsDF member countries, in its 

annual Development Effectiveness Report.
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Inter-American Development Bank Group 

Inter-American Development Bank 

“The IDB’s participation in the development of key sectors for our development - agriculture, 

housing, the financial markets, infrastructure - has helped, without a doubt, to improve the 

competitiveness of the economies of Latin America and the Caribbean, and most importantly, to 

improve the quality of life of millions.”

Felipe Calderón, President of Mexico, March 2010

Inter-American Development Bank (IDB) Request: $102.0 million

First of five installments

Last GCI: 1994

Established in 1959, the IDB is the largest source of development financing for Latin America and 

the Caribbean, a region of significant commercial and strategic importance to the United States. In 

aggregate, the IDB provides 26 borrowing member countries close to 50 percent of their multilateral financing. 

For FY 2012, Treasury is requesting $102.0 million for the first of five installments for the InterAmerican Development Bank’s (IDB) Ninth General Capital Increase (GCI 9). This recapitalization will help avert a sharp reduction in lending to approximately $7 billion per year, well below 

our estimates of the $12 billion in borrowing needs of member countries. The GCI agreement also 

secures $2 billion in grants for Haiti through 2020.

Beyond this grant funding, the IDB is Haiti’s lead multilateral development partner in six of the key 

sectors for the post-earthquake recovery and development of Haiti, including education, transportation, water and sanitation, agriculture, energy, and private sector support, especially for small and 

medium-sized enterprises. Specific projects include: 

• $250 million to reform the education system over 2010-2014;   

• Road construction and repair, as well as port and airport repair and rehabilitation; 

• $50 million to develop an industrial park in the northern region of Haiti; and

• A partial credit guarantee fund, as well as a social investment fund, designed to provide credit 

for small and medium sized businesses that are currently excluded from the national credit 

markets.
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The U.S. contribution will leverage significant additional resources: every additional dollar of U.S. 

capital allows lending to increase by over $10 due to burden-sharing with other shareholders and 

increase the Bank’s ability to borrow in the markets. 

U.S. Leadersh

For over 50 years, the United States has been the leading shareholder of the IDB, ensuring that the 

investments made by the American people in partnership with the other members of the Bank are 

financially sound, and advance the economic and social development of Latin America and the 

Caribbean. By virtue of our large shareholding in the institution (30 percent), the United States 

exercises strong influence over the Bank’s policies and programs, which further strengthens the 

role of the IDB as a partner in advancing U.S priorities in the Western Hemisphere. The United 

States’ influence was reflected during the capital increase negotiations, during which we effectively 

consolidated key institutional reforms of the IDB, including: 

• More responsible resource management. The IDB adopted a comprehensive income management model that allocates income and adjusts loan pricing to cover the Bank’s complete lending 

and grant programs; provides minimum annual transfers of $200 million to the grant facility 

for Haiti; ensures adequate capital to preserve the financial soundness of the Bank; and covers 

all administrative expenses. 

• A new framework for development effectiveness. The IDB is formulating a new “development 

effectiveness matrix” that will impose more discipline over project development and promote a 

greater emphasis on project outcomes and impact. The Bank will also disclose all project-level 

analysis, compliance with institutional priorities, and economic rate of return (ERR) calculations for projects approved each year, as well as formal evaluations of project impacts. 

• Stronger environmental safeguards. The IDB agreed to reform environmental and social safeguards to be fully consistent with the recommendations of the independent advisory group on 

sustainability and in line with international best practices. 

• New transparency and accountability standards. The IDB is establishing a new disclosure policy 

that is consistent with the highest standards applied by other multilateral financial institutions. 

Key elements include the replacement of a “positive list” of disclosed policies with a limited 

“negative list,” a presumption of disclosure; the release of Board/Committee minutes; voluntary 

disclosure of Executive Directors’ statements; and disclosure of project-level results. 

• A new and more credible Inspection Mechanism. The IDB is improving the scope of its inspection mechanism by agreeing to phase-in the coverage of all Bank policies within the next three 

years. 

• More support for the private sector. The Bank has agreed to remove its cap on lending to the 

private sector, which will now be subject to a new capital adequacy model.
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Multilateral Investment Fund

Multilateral Investment Fund (MIF) Request: $25.0 million

Sixth of six installments

Start of current Replenishment: 2007 

The MIF is a special facility within the Inter American Development Bank that promotes microand small- enterprise growth in Latin America. The MIF works directly with private sector and 

public sector partners to strengthen the environment for business, build the capabilities and skills 

of the workforce and broaden the economic participation of smaller enterprises. For FY 2012, 

Treasury requests $25.0 million for the sixth and final installment payment of the first replenishment of the MIF (MIF II). Each dollar of U.S. funding is matched by over $2.5 in contributions 

from other donors.

U.S. Leadersh

The United States was the primary force behind the creation of the MIF. Since its establishment in 

1993, its focus has been on areas prioritized by the United States. For example, in April 2009, the 

MIF agreed to participate in a new partnership announced by the White House, together with the 

U.S. Overseas Private Investment Corporation (OPIC), and the Inter-American Investment Corporation (IIC), to create a fund to provide up to $250 million to microfinance institutions to weather 

the global financial crisis and allow them to continue to help small businesses in the Western Hemisphere. 

 In addition, the MIF moved quickly to establish a $3 million credit line to help past and present 

MIF partners in Haiti get up and running following the earthquake. One beneficiary of this funding was INDEPCO, a network of micro-entrepreneurs in the garment sector, which almost immediately received $180,000 from the MIF to help rent new space and purchase new equipment and 

motorbikes to allow its micro producers to quickly return to supplying the rising demand they had 

been enjoying from both domestic and international markets. 

Inter-American Investment Corporation

Inter-American Investment Corporation (IIC) Request: $20.4 million

Arrears Payment

The IIC promotes private small and medium-sized enterprises in Latin America and the Caribbean by offering a combination of direct loans and equity investments in individual companies, 

lending through private local banks, and participation in regional equity funds. The IIC supports 

key objectives of the Administration, especially the promotion of private small and medium-sized 

enterprises.

For FY 2012, Treasury requests $20.4 million to clear remaining U.S. arrears to the IIC. The deadline to pay for subscribed shares from the 1999 capital increase expired March 31, 2008 (the original 

deadline was October 31, 2007, but we were granted an extension). Despite reluctance by IIC membership to extend the deadline further, the United States was able to successfully broker another 

extension in which the United States would pay 10 percent of its arrears in 2010, 45 percent of its 
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30 POVE RTY R E DUCTION AN D ECONOM IC G ROWTH

arrears in 2011, and 45 percent of its arrears in 2012. Our failure to meet this financing deadline 

would result in the reduction of shareholding in the IIC to 22 percent (from 25 percent), and would 

raise questions more broadly about the value of U.S. pledges of financial support.

Each dollar of U.S. contribution to the IIC’s capital stock is matched by three dollars in contributions from other donors. This leveraging is compounded by a significant degree of counterparty 

financing and joint financing by the private sector and other bilateral donors.

U.S. Leadersh

The United States played the lead role in the creation of the IIC in 1984 due to our long-standing 

commitment to fostering economic growth, especially through the primacy of open markets and 

private sector-led growth. The IIC’s mission is closely aligned with these priorities and has had significant impacts in the region. In 2010, the IIC expanded its equity and quasi-equity investments 

in the region, seeking to broaden the range of products the IIC offers and create greater value added 

for SMEs through new, more flexible financing instruments. In partnership with the Department 

of Commerce, in 2010 the IIC developed a training program for SMEs on the adoption of best 

practices for business ethics. 
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European Bank for Reconstruction and Development

“In the past two decades, the European Bank for Reconstruction and Development has been 

an important partner to Croatia in its endeavors to achieve sustainable economic development 

based on the principles of a market economy.”

Jadranka Kosor, Prime Minister of Croatia, May 2010

European Bank for Reconstruction

and Development (EBRD) Request: $0

Last GCI: 1996

The EBRD was created in 1991 to foster the transition to open market-oriented economies by promoting private sector development, foreign investment, privatization, and efficient financial markets in the former communist countries of Central and Eastern Europe and the countries of the 

former Soviet Union. 

In 2009 and 2010, EBRD sharply increased its lending and investment activities in response to the 

effects of the financial crisis on Eastern Europe and the former Soviet Union. The EBRD’s crisis 

response efforts proved critically important to U.S. interests, which include a stable and prosperous European continent, but placed new demands upon the institution’s capital. As a result, we are 

seeking authorization to support a temporary 50 percent increase in the EBRD’s capital. 

Specifically, Treasury requests Congressional authorization to make a binding commitment that 

would make available $1.25 billion (€900 million) in the event of a “call” on capital. We are not 

seeking appropriations because the EBRD tapped internal resources ($1.39 billion) to cover the paid-in 

portion of the GCI. The temporary callable capital will be cancelled once the regional effects of the 

financial crisis have begun to recede, with a first assessment scheduled in 2015. 

This GCI will enable the EBRD to remain an important partner the region, especially in volatile 

areas such as Ukraine, Kosovo, Georgia and the Caucasus, the Kyrgyz Republic and the Central 

Asian states that border Afghanistan. For example:

• The EBRD has invested nearly $1 billion in the Kyrgyz Republic, and is working closely with 

other donors to mobilize resources to help stabilize the Kyrgyz economy as the country recovers from recent civil unrest. In particular, EBRD has worked to maintain support for microfinance institutions in the Kyrgyz Republic that are key financial intermediaries. 

• In Georgia, the EBRD was a critical partner, alongside the MCC and other U.S. bilateral programs, in providing financing necessary to support economic stability following the political 

crisis in 2008. In March 2010, EBRD signed a €80 million ($111 million) sovereign loan for 
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32 POVE RTY R E DUCTION AN D ECONOM IC G ROWTH

the construction of Black Sea High Voltage line- one of the largest infrastructure investments 

in Georgia. This project will help interconnect the Georgian and Turkish power sectors, 

improving the reliability of the power supply and stimulating development of renewable energy 

in the Caucasus. 

The United States has also supported EBRD investments to promote energy efficiency and renewable energy as part of its ongoing Sustainable Energy Initiative. Projects in this sector account for 

19 percent of total commitments in 2009. Many of the economies in the region have much higher 

levels of energy intensity per unit of economic output than economies in Western Europe, making 

them more vulnerable to changes in energy prices. The EBRD’s investments helped to improved 

the energy efficiency of the region’s economies, and have reduced CO2

 emissions by nearly 27 million tons. 

U .S . Leadership 

With strong encouragement from the United States and other partners, the EBRD played a vital 

role in supporting a successful and timely response to the global financial crisis. Working jointly 

with other multilateral institutions, the EBRD helped prevent a disorderly unwinding of crossborder financial exposures in Eastern Europe, and is now working to address the region’s excessive 

reliance on foreign currency borrowing and saving. Related to the recent economic turmoil in Europe, the EBRD has also agreed to provide credit lines with subsidiaries of National Bank of Greece 

in Bulgaria and Romania to help maintain the supply of credit in the Balkans. 

In the discussions of the capital increase, the United States was instrumental in securing the unique 

formulation that included the use of EBRD’s internal resources (for the paid-in portion) and a 

temporary GCI. In conjunction with this innovative approach, the United States also secured 

commitments to: 

• Reduce the concentration of lending to Russia; 

• Reaffirm a graduation policy for the advanced transition countries in Central Europe (Slovakia, 

Slovenia, Hungary, Poland, Latvia, Lithuania and Estonia).

As a result, the EBRD will reduce concentration risk and will do more business in the less advanced 

transition economies where it offers the greatest additional impact. 
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FOOD SECU R ITY

FOOD SECURITY

Today, nearly one billion people suffer from chronic hunger.  With a rising population, global food 

supplies will have to increase by an estimated 50 percent over the next 20 years to meet projected 

demand.  This challenge is compounded by climate change, soil erosion, water shortages, and, in 

many of the world’s poorest countries, stagnant agricultural productivity.

At L’Aquila, the G-8 committed to achieve sustainable global food security through the strategic 

alignment of donor resources in results-based, country-owned, accountable investment plans. The 

Obama Administration has made strengthening global food security a priority for its development 

policy through the Feed the Future initiative. By working to address the causes of food shortages 

and by increasing productivity, especially among rural populations, the United States in coordination with other donors and recipient governments has an opportunity to lift the lives of the world’s 

poorest and foster broad-based economic growth. And Treasury is playing an important role in 

supporting these efforts through its leadership in the Global Agriculture and Food Security Program (GAFSP) and sustained support for the International Fund for Agricultural Development 

(IFAD) outlined below.

The Global Agriculture and Food Security Program

“...this fund [the Global Agriculture and Food Security Program] symbolizes the G20s willingness to act in a coordinated manner on an issue that is fundamental to our countries’ growth 

and development.”

Finance Ministers from nine African countries (Ethiopia, Kenya, Liberia, 

Malawi, Nigeria, Rwanda, Senegal, Sierra Leone, and Uganda) 

Letter to the G-20, October 2010

The Global Agriculture and Food

Security Program (GAFSP) Request: $308 million

Trust Fund Contribution

For FY2012, Treasury requests $308 million for GAFSP, a multilateral trust fund that invests in the 

agricultural sector of the world’s poorest countries. The United States was the driving force behind 

the fund, which prioritizes financing for countries that demonstrate a comprehensive approach to 

agriculture, including by committing their own resources. An initial U.S. contribution of $67 mil-
T R E A S U R Y I N T E R N A T I O N A L P R O G R A M S

34

lion in 2010 in concert with U.S. diplomatic efforts and additional U.S. funding commitment has 

so far leveraged an additional $387 million in contributions. In 2010, the fund committed $337 

million to eight countries in Africa, Latin America and Asia. The United States’ continued financial leadership in GAFSP will be critical to attracting additional resources from new and existing 

donors.

The GAFSP also has an innovative, competitive structure under which all of the eligible multilateral 

institutions can compete to design and implement projects. GAFSP promotes sustainable gains in 

food security by:

• Providing a focused and coordinated approach; 

• Creating incentives for developing countries to prioritize agriculture and promote policy reforms, as well as requiring recipients to direct their own resources to and align them with sustainable food security goals; 

• Establishing measurable performance for these investments that is tied to the Millennium Development Goals for hunger and poverty; and

• Serving as a vehicle to advance innovation and build on lessons learned on reforms within 

multilateral development institutions.

U.S. Leadersh

As part of the Administration’s food security initiative, Treasury worked with our partners in the 

G-8 and G-20 to establish the GAFSP, which was launched on April 22, 2010 by Secretary Geithner. 

U.S. leadership led to several noteworthy features in the design of the Fund: 

Making allocations based on quality proposals that align with L’Aquila commitments. The fund is generating strong incentives among poor countries to complete robust, evidenced-based agricultural 

development strategies, and commit their own resources to this important sector. Strong competition and selectivity, based on an independent review of proposals is contributing to improvements 

in the quality of projects.

Including the voice of small farmers. The United States also played a critical role in promoting a role 

for recipient countries and civil society.  As a result, the main decision making body has equal representation between donors and recipient countries, in the capacity as voting members. Three civil 

society organizations – two from developing countries and one from industrialized countries – as 

well as representatives from the GAFSP implementing agencies act as non-voting members on the 

steering committee.  And because the steering committee operates on a consensus basis, the United 

States retains veto authority over funding decisions.

Promoting greater transparency. With Steering Committee representation for all stakeholders (donor and recipient countries, civil society organizations, and multilateral development institutions), 

GAFSP demonstrates the importance of a fully transparent fund. This transparency extends to the 

general public as well. For example, the criteria used by the Technical Advisory Committee in its 

independent review process are publicly available online, as are proposals, minutes of meetings, 

FOOD SECU R ITY
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and other relevant information. (http://www.gafspfund.org/gafsp/content/technical-advisorycommittee)

Measuring the impact of our investments. The fund has set aside up to 2.5 percent of its resources 

for rigorous impact evaluations. These evaluations will be conducted by a third party (not the MDB 

implementing the project or the recipient government) to ensure independence. The results of 

these evaluations will be publicly available. Treasury is working with State and the World Bank on 

a common set of indicators so that the impact on the MDGs can be measured.

GAFSP Awards as of February 2011:

To date, in several countries, GAFSP projects are already approved and becoming operational:

Country Grant Amount

(date of award)

Project Focus

Bangladesh $52.5 millio

(June 2010)

To enhance agricultural productivity through new technologies 

and improved water management

Ethiopia $54 million

(November 2010)

 To promote agribusiness development and the improvement of 

small-scale rural agricultural infrastructure

Haiti $36.75 millio

(June 2010)

To support the adoption of higher yielding technologies to 

boost agricultural productivity

Mongolia $13.125 millio

(November 2010)

To increase market access to rural livestock-based farm 

systems and improve livestock quality and productivity

Niger $34.6 millio

(November2010)

To create water harnessing infrastructure and address 

upstream erosion that damage these structures

Rwanda $52.5 millio

(June 2010)

To finance water management infrastructure, hillside 

agricultural development, and rural access to financial services

Sierra 

Leone

$52.5 millio

(June 2010)

To finance the commercialization of smallholder farmers, 

support small-scale irrigation infrastructure, and improve 

agricultural services with new technology and training

Togo $41 million

(June 2010)

To support the adoption of higher yielding technologies and 

reduce post-harvest losses of rice, maize, and cassava

Total $337 million

International Fund for Agricultural Development

International Fund for

Agricultural Development (IFAD) Request: $30.0 million 

Third of three installments

Start of current Replenishment: 2010

For FY 2012, Treasury requests $30 million for the third of three payments to the eighth replenishment of IFAD (IFAD8). Through low-interest loans and grants, IFAD develops and finances 

projects that help smallholder farmers increase agricultural productivity and incomes, improve 

nutritional levels, and access larger markets. Forty percent of IFAD’s funding supports agricultural 

development in the poorest countries in sub-Saharan Africa. 
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36 FOOD SECU R ITY

IFAD is the only multilateral development institution focused exclusively on reducing poverty and 

improving food security in the rural areas of developing countries. IFAD’s mandate is critically 

important in the fight against poverty, as about 70 percent of the world’s 1.4 billion poorest people 

(defined as those subsisting on less than $1.25 a day) live in rural areas, mainly as small-scale producers and subsistence farmers. 

IFAD’s comparative advantage is rooted in its unique mandate and wealth of experience in building 

partnerships at all levels – from grass-roots farmers’ organizations in remote rural areas to private 

and government partners in national, regional and global food security initiatives. IFAD designs 

sound and innovative programs – in agricultural production, financial services, rural infrastructure, livestock and fisheries, research and training, market and enterprise development, and natural 

resources management – that respond to the priorities and constraints identified by the rural poor 

themselves. 

Recent examples of IFAD successes include: 

• A project in Western Mindanao, Philippines designed to help former combatants return to civilian life after decades of conflict. The $750,000 grant targeted households of former combatants 

to help them with access to land and become productive farmers and fisherfolk. Originally 

intended for 1,000 returnees, the project benefitted 3,860 people in the area, increasing beneficiaries’ income by as much as 60 percent. Some have used this extra income to buy household 

appliances and fishing boats, while others can now afford to send their children to primary and 

secondary schools.

• A project in Lesotho to finance woolsheds and train farmers in improved animal health as well 

as care and management of the grasslands on which their herds feed. This project is enabling 

small-scale sheep and goat farmers to lift themselves out of a subsistence existence and obtain 

better prices for their wool. The absence of woolsheds meant that many farmers had to walk 

days to reach the nearest woolshed and faced substantial risk and loss of goats and sheep. Only 

a few months after the construction of a new woolshed, however, more than 4,900 sheep had 

been shorn and almost 16,000 kg of wool had been baled and sent for auction at a large regional 

market. As a result of the project, farmers will be getting substantially better prices for their 

wool in the marketplace. 

U.S. funding for IFAD8 will leverage an additional $1.1 billion in contributions from other donors 

and support a work program of $3.0 billion over 2010-2012. 

U.S. Leadersh

As the largest contributor to IFAD, the United States has led efforts to improve its development effectiveness. Under the last replenishment, notable new commitments included: 

• A results measurement framework based on improved results monitoring at the country and 

project levels;

• The establishment of a new resources allocation system that rewards strong performers;
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• An independent office of evaluation;

• Strengthened internal governance, including a fraud and corruption policy with whistleblower 

protections; and

• Development of an institutional strategy for climate change and a policy on environment and 

natural resources management. 

These commitments are translating into better results. According to IFAD’s independent office of 

evaluation, its impact on rural poverty has improved markedly: for the 2002-2004 period, 48 percent of the projects evaluated were rated “moderately satisfactory” or better; this figure improved to 

86 percent in 2007-2009. 

The likelihood that project benefits will be sustained after projects close, an important element of 

project impact, is on an upward trend in IFAD. Among projects evaluated by IFAD’s independent 

evaluation office, the proportion of projects judged to have a moderately satisfactory (or above) 

likelihood that its benefits will be sustained rose from 40 percent in 2002-2004 to 65 percent in 

2007-2009. 
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CLI MATE CHAN G E AN D TH E E NVI RON M E NT

CLIMATE CHANGE 

AND THE ENVIRONMENT

“As developing countries, we are on the cusp of an energy revolution, and the Climate Technology Fund offers us the door through which we can go to access the needed support, financially 

and technologically.”

Zaheer Fakir, Deputy Director-General, International Cooperation and Relations, 

Department of Environmental Affairs, South Africa, November 2010

Climate change is contributing to global instability and, left unchecked, will lead to significant 

population displacement, declines in global food supply, and major shortages of water. This is a 

transnational challenge that requires multilateral solutions. While developing countries account 

for nearly all of the growth in global greenhouse gas emissions, greenhouse gas pollution mixes 

globally and poses the same threat to the United States regardless of where it is emitted. An international response and effort to reduce greenhouse gases is therefore critical to an effective solution. 

While facing the climate change challenge, the United States is also presented with an opportunity to lead the development and manufacture of innovative energy technologies that can address 

the central issues while also building American industry, innovation and expanding exports. U.S. 

funding for multilateral efforts to address climate is therefore important for resolving a fundamental global challenge while also helping to increase U.S. economic competition.

Clean Technology Fund

Clean Technology Fund (CTF) Request: $400 million

Trust Fund Contribution 

For FY 2012, the Administration requests $400 million for the Clean Technology Fund (CTF), 

which is one of two multilateral Climate Investment Funds (CIFs). The CTF aims to reduce global 

emissions growth and combat climate change by helping to close the price gap in developing countries between commercially available clean technologies and dirtier conventional alternatives in the 

power sector, the transport sector, and in energy efficiency. The CTF focuses on spurring largescale clean energy investments in middle income developing countries with rapidly growing emis-
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sion profiles. For example, with CTF resources a country can construct cleaner, but more expensive 

wind farms instead of having to rely on cheaper, dirtier coal-fired power plants.

U.S. participation in the CTF magnifies our “bang for the buck” in a number of ways. It not only 

attracts other donors to the fund, but also leverages other government, multilateral development 

bank (MDB) and private sector resources in the actual projects. Specifically, each U.S. dollar contributed to the fund has leveraged nearly five additional dollars from other donors. In addition, 

the CTF has endorsed 14 clean energy investment plans that blend $4.3 billion of fund money with 

financing from other sources to mobilize total planned investments of over $40 billion - leveraging 

nearly $10 from other sources for each CTF dollar spent.

These 14 country-owned plans, developed in partnership with the MDBs by Colombia, Egypt, 

Indonesia, Kazakhstan, Mexico, Morocco, Nigeria, Philippines, South Africa, Thailand, Turkey, 

Ukraine, Vietnam, and a regional program in the Middle East and North Africa, include over 50 

large-scale, emissions reducing projects that are under development. Current contributions have 

allowed the CTF to provide a total of $1.4 billion in financing for the first 19 of these projects which 

mobilize over $11 billion dollars in total investments and each year will avoid over 14 million tons 

of greenhouse gas pollution.

Specific examples of CTF successes include: 

• Wind farm development in Mexico’s Oaxaca region: In May 2009, the CTF approved a small, but 

long-term loan for a 67.5 megawatt private-sector wind farm. The loan attracted commercial 

lenders because it offset the high costs of obtaining long-term financing and mitigated any 

perceived risks held by commercial lenders. By providing this initial investment, the CTF is 

helping to catalyze wind energy development in Mexico.

• Geothermal Power in Indonesia: For decades, Indonesia held the world’s largest potential for 

geothermal power but it was largely unsuccessful in promoting its development. Through the 

work of two programs, the Global Environment Facility addressing the policy and investment 

environment, and the CTF mobilizing financing for large-scale demonstration projects, Indonesia is now on the way to unlocking nearly a gigawatt of this valuable renewable resource in 

the next few years for use as base load energy.

U.S. Leadersh

The United States, alongside the United Kingdom and Japan, led international efforts in 2008 to 

develop and launch the CTF. Strong and consistent U.S. leadership over the past two years has 

helped the CIFs become the largest vehicle for mobilizing international finance. Our engagement 

helped place the CIFs at the leading edge of the President’s new approach to global development 

by ensuring that the funds pursue a clear comparative advantage, maximize leverage and results, 

and strengthen transparency and accountability. U.S. efforts have moreover ensured that the funds 

make selective and targeted engagements, promote country ownership, international coordination, 

value for money and greater private sector participation.

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The U.S. and our CIFs partners developed a robust results measurement framework designed to 

assess the impacts of our efforts and generate knowledge at the fund, regional/country/local, and 

project level. A key component of this is the CIFs’ Global Support Program which provides a multistakeholder platform for capturing learning and translating it into actionable knowledge products 

that benefit the global transition to the clean energy economy of the future.

The CTF employs an innovative, independent governing committee that gives developed and developing countries equal voice, and includes participation from other development partners, civil 

society and the private sector. Decisions by the committee are taken on a consensus basis. The 

United States serves on the committee with seven other donors, and eight developing countries 

including Brazil, China, Egypt, India, Morocco, Nigeria, South Africa and Turkey.

Strategic Climate Fund

Strategic Climate Fund (SCF) Request: $190 million

Trust Fund Contribution

The Strategic Climate Fund (SCF), the other fund of the multilateral Climate Investment Funds 

(CIFs), supports three targeted programs: the Pilot Program for Climate Resilience, the Forest Investment Program, and the Program for Scaling-Up Renewable Energy in Low-Income Countries. 

Each program seeks to pilot new approaches and scaled-up activities to address climate change challenges in developing countries, while promoting low-carbon, climate resilient economic growth. 

For FY 2012, the Administration requests $190 million for the SCF.

• The Pilot Program for Climate Resilience (PPCR) helps ensure that the unavoidable effects of 

climate change will not undo our ongoing poverty reduction and economic growth efforts in 

developing countries. Through pilot programs in a small number of the most vulnerable countries, PPCR is demonstrating innovative ways to incorporate forward-looking climate considerations into broader development activities and investments. The knowledge generated by 

these pilots will help ensure that “climate-proofed” growth strategies become the norm in all 

developing countries.

• The Forest Investment Program (FIP) is working to reduce deforestation in developing countries 

by addressing the circumstances that lead to it. FIP is working with a small number of pilot 

countries to develop innovative approaches to a wide variety of challenges – from regulation 

and enforcement, to financing, to understanding and addressing the many social and economic 

implications of forest management. The knowledge generated by these pilots will help all developing countries build sustainable forestry into their broader economic growth strategies.

• The Program for Scaling-Up Renewable Energy in Low Income Countries (SREP) helps poor 

developing countries improve energy security and access, while stimulating economic growth 

through expanded use of their natural renewable energy resources. Through a small number 

of pilot programs, SREP is developing innovative ways to establish viable renewable energy 

markets in the poorest countries. The knowledge generated in these pilots will produce information on best practices and lessons learned that can be used in all developing countries.
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42 CLI MATE CHAN G E AN D TH E E NVI RON M E NT

U.S. Leadersh

Like in the CTF, Unites States engagement with the SCF, and each of the fund’s three programs, 

has helped place it at the leading edge of the President’s new approach to global development by 

ensuring that the funds pursue a clear comparative advantage, maximize leverage and results, and 

strengthen transparency and accountability. U.S. efforts have moreover ensured that the SCF programs make selective and targeted engagements, promote country ownership, international coordination, maximize value for money and promote greater private sector participation.

For example, in Bangladesh, the most climate-vulnerable country in the world, PPCR funding will 

support a number of projects, including a long-term reconstruction plan to shore up its coastal 

embankments to withstand cyclones and storm surges, and financing to increase climate resilience 

of their water supply, sanitation and other coastal infrastructure investments. PPCR funding will 

complement existing support to Bangladesh from other development partners for its vital adaptation work.

The U.S. and our CIFs partners developed a robust results measurement framework designed to 

assess the impacts of our efforts and generate knowledge at the fund, regional/country/local, and 

project level. A key component of this is the CIF’s Global Support Program which provides a multistakeholder platform for capturing learning and translating it into actionable knowledge products 

that benefit the global transition to the clean energy economy of the future.

Like the CTF, the SCF programs employ innovative, independent governing committees that give 

developed and developing countries equal voice, and include participation from other development 

partners, civil society and the private sector. Decisions by the committees are taken on a consensus 

basis. The United States serves on both SCF governing committee as well as the operational subcommittees for each of the three programs.

Global Environment Facility

Global Environment Facility (GEF) Request: $143.75 million

Second of four installments

Start of current Replenishment: 2011

The Global Environment Facility (GEF) is a multilateral facility that provides incremental fundingmostly grants-for projects that provide global environmental benefits, such as reducing greenhouse 

gas pollution and conserving biodiversity. 

Treasury requests $143.75 million for the second of four installments to the fifth replenishment 

of the Global Environment Facility (GEF-5), which will cover the period from July 2010 through 

June 2014. During the GEF-5 replenishment negotiations, the U.S. sought and achieved important policy reforms to improve the GEF’s effectiveness, particularly with regard to country-owned 

business plans for GEF funding and resource allocation. The total U.S. commitment to the GEF 

replenishment will be $575 million, to be paid in four equal installments of $143.75 million from 

FY 2011 through FY 2014.
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The GEF supports capacity building and innovative and cost-effective investments whose design 

and environmental benefits can be duplicated (and financed) elsewhere. Projects fall into seven 

categories. Cumulative grants to these areas since 1991 have been allocated as follows: biodiversity 

conservation (33 percent); reducing or avoiding Greenhouse Gas emissions (33 percent); international waters (13 percent); combating desertification and deforestation (5 percent); reducing persistent organic pollutants (3 percent); cross-cutting projects (11 percent); and phasing out ozonedepleting chemicals (3 percent).

GEF projects are implemented by other international agencies, including the United Nations Development Program, and the MDBs. Since its creation in 1991, the GEF has approved more than 

$9.2 billion in grants, which leveraged approximately $40 billion in co-financing to support more 

than 2,700 projects in 165 countries. 

The Fifth GEF Replenishment was concluded in May 2010 with a record 52 percent increase in new 

donor funding.  Each dollar pledged by the United States was matched by five dollars from other 

donors, for a total of $3.5 billion in new donor resources, and $4.25 billion in available resources, 

over the FY 2011 to FY 2014 period.  The GEF has 179 member countries and a 32 member governing board. The World Bank serves as the trustee of the GEF Trust Fund.

U.S. Leadersh

In addition to improving the environment around the world through various country projects, the 

U.S. contribution to the GEF also directly benefits the United States by:

• Reducing harmful, long-lived chemicals in U.S. air and water;

• Protecting international marine resources, such as international fish stocks; and

• Protecting tropical rain forests and other natural areas that both maintain biodiversity and reduce carbon dioxide emission from deforestation and land degradation.

The GEF is governed by a board of 32 members that includes 16 developing countries, 14 developed 

countries, and two economies in transition. Decision-making strives for consensus, but can revert 

to a double-majority voting (60 percent of board members and 60 percent of contributions). Meetings are open to observers from civil society and virtually all meeting documentation is available 

on the internet.

Tropical Forest Conservation Act

Tropical Forest Conservation Act (TFCA) Request: $15 million

Debt Restructuring

The Tropical Forest Conservation Act (TFCA) allows eligible low- and middle-income developing 

countries with significant tropical forests to relieve certain official debt owed to the United States 

while generating funds to support forest conservation. 
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Treasury’s FY 2012 budget request of $15 million would be used for debt treatment under the 

TFCA to conserve, maintain, and restore tropical forests. TFCA is funded out of Treasury’s Debt 

Restructuring account. 

TFCA helps protect the biodiversity found in tropical forests around the world, while also protecting critical ecosystems. Additionally, the TFCA offers a unique opportunity for public-private 

partnerships. Third party funders (usually international conservation NGOs) participate in many 

deals, increasing the size of individual agreements and contributing additional expertise to the 

management of programs. To date, 10 of the 17 TFCA agreements have utilized this public-private 

mechanism.

Under the TFCA, eligible countries can treat a portion of their debt to the United States through 

one of three debt treatment options: a debt swap with an eligible third party, usually an international environmental non-governmental organization, in which the USG may participate as well; 

a bilateral debt reduction agreement with the USG, or a debt buyback. Resulting payments on the 

treated debt are used to support grants to local NGOs and other entities engaged in a variety of forest conservation activities. 

U.S. Leadersh

The Treasury Department recently concluded a TFCA agreement with Brazil and a second TFCA 

deal with Costa Rica, and is currently in negotiations with Indonesia on a second TFCA agreement. 

To date, the United States Government has concluded 17 TFCA agreements in 14 countries: Bangladesh, El Salvador, Belize, Peru (two agreements), the Philippines, Panama (two agreements), 

Colombia, Jamaica, Paraguay, Guatemala, Botswana, Costa Rica (two agreements), Indonesia and 

Brazil. These agreements will together generate over $260 million for tropical forest conservation, 

which will help further reduce the impact of climate change.
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DE BT R E LI E F

DEBT RELIEF

“Today we are virtually debt free....We have won back our reputation, we have regained our 

financial independence, and we will use that new freedom to speed up development.  With this 

burden of debt lifted, we can spend the money saved on improving the lives of our citizens.”

Ellen Johnson Sirleaf, President of Liberia, January 2011

U.S. efforts on debt relief and restructuring are fundamental to helping some of the world’s poorest 

countries stabilize, restart economic growth, and reduce poverty and instability. These programs 

include the Heavily Indebted Poor Countries (HIPC) Initiative, the HIPC Trust Fund, the Tropical 

Forest Conservation Act (see page 42), and the Multilateral Debt Relief Initiative (MDRI). Over 

forty countries, including Haiti, Afghanistan and Liberia, have benefitted from U.S. debt relief and 

restructuring programs. 

U.S. Leadershi

The United States has been a leader under the enhanced HIPC initiative, fostering support to help 

some of the world’s poorest countries reduce or restructure their debt. For example, with strong 

U.S. support, Liberia qualified for $4 billion of HIPC and MDRI debt relief in June 2010. The 

United States also played a lead role in the Paris Club of bilateral creditors who agreed to forgive all 

of their claims on Liberia. The United States implemented this agreement swiftly, signing a bilateral 

agreement in December 2010 to forgive Liberia’s remaining debts to the United States.

The United States has also led important initiatives outside of the HIPC and MDRI programs. In 

early 2010, within days of Haiti’s devastating earthquake, Secretary Geithner called for all of Haiti’s 

debts to the international financial institutions (beyond those already relieved through HIPC and 

MDRI) to be relieved. Less than six months later, the United States, together with other donors, 

eliminated the total debt stock that Haiti owed to the international financial institutions at the time 

of the January earthquake. This was an exceptionally innovative effort: With a U.S. contribution 

of $248 million, we achieved a cancellation of over $800 million in debt and made available an additional $318 million in new grant resources for Haiti’s recovery.
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46 DE BT R E LI E F

Enhanced Heavily Indebted Poor Countries Initiative

Enhanced Heavily Indebted Poor Countries (HIPC)

Initiative / HIPC Trust Fund Request: $0

Treasury is not requesting funding in FY 2012 for the HIPC Trust Fund, although our remaining 

pledge is $75.4 million. The United States, which pledged an additional $150 million after a G-8 

Leaders’ Summit in 2002, is the only country except Italy that had not yet met its pledge to the 

HIPC Trust Fund as of the end of FY 2010. 

The Enhanced HIPC initiative was launched to provide deeper, broader, and faster debt reduction 

for the poorest heavily indebted countries that have made a real commitment to economic reform 

and poverty reduction. Countries that demonstrate the performance on economic policies and 

poverty reduction required to complete the HIPC process also qualify for additional debt relief 

under the Multilateral Debt Relief Initiative (MDRI), which provides 100 percent debt cancellation 

on eligible obligations to the International Monetary Fund (IMF), the International Development 

Association (IDA), and the African Development Fund (AfDF). 

The Heavily Indebted Poor Countries initiative (HIPC) and the Multilateral Debt Relief Initiative 

(MDRI) are excellent examples of promises kept and results delivered. A 2010 DATA report on 

G-8 commitments calls them “the clearest examples of a promise fulfilled.” In total, 36 out of the 

40 HIPCs have qualified for HIPC initiative assistance, of which 30 have reached the “completion 

point” and received irrevocable debt relief from the international financial institutions. They are 

benefitting from debt relief that, together with MDRI, will lower their stock of debt by over 80 

percent, allowing for increased poverty reduction expenditures in areas such as basic health, education, and rural development. Debt relief committed under the HIPC and MDRI initiatives to-date 

amounts to about $127 billion in nominal terms. 

Multilateral Debt Relief Initiative (MDRI)

Building upon the Heavily Indebted Poor Countries (HIPC) Initiative, the Multilateral Debt Relief 

Initiative (MDRI) provides 100 percent cancellation of remaining eligible debts owed to the World 

Bank’s International Development Association (IDA), the African Development Bank’s African Development Fund (AfDF), and the International Monetary Fund (IMF) for countries that complete 

the HIPC initiative. MDRI is expected to provide over $53 billion in additional debt relief beyond 

HIPC to 42 countries. IDA is expected to provide the greatest level of debt relief at over $36 billion 

(nearly 70 percent of the total), while AfDF is expected to provide nearly $9 billion. In 2007, the 

Inter-American Development Bank (IDB) also agreed to provide debt relief comparable to MDRI.

In order to make this major debt relief initiative possible, donors committed to offset the cost of 

MDRI debt relief at IDA and the AfDF on a dollar-for-dollar basis. To meet its share of this effort, 

the United States has committed, subject to the enactment of appropriations legislation, to provide 

a total of about $7.6 billion for IDA and $1 billion for AfDF over roughly four decades. The timing 

of these contributions is spread out over a long period in order to match the period during which 

these debts would have otherwise been repaid. Internal resources were available to cover the costs 

at the IMF and the IDB.
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DE BT R E LI E F

Multilateral Debt Relief Initiative for IDA15

Multilateral Debt Relief Initiative for IDA15: Request: $91 million

Same schedule as IDA

Treasury’s request for $91 million for the remaining U.S. commitment to MDRI under IDA15 will 

allow the World Bank to continue to offer 100 percent cancellation of eligible debts owed to IDA 

for countries that have completed the HIPC initiative. Until this year, the U.S. Government used 

an approach known as “early encashment,” rather than additional cash outlays, to fund U.S. MDRI 

commitments at both IDA and AfDF. When the United States pays its IDA and AfDF replenishment commitments over a shorter time period than required by the replenishment agreement, this 

generates additional credits that are applied to the U.S. MDRI commitment at each institution. 

In essence, the United States gets to use its IDA and AfDF contributions toward meeting both 

replenishment commitments and MDRI commitments. This benefit is maximized when the U.S. 

fully funds its replenishment commitments and MDRI commitments. However, because several 

payments of IDA15 were underfunded, Treasury must now request additional funding for MDRI 

for IDA15. 

Multilateral Debt Relief Initiative for IDA16 and AfDF12

Multilateral Debt Relief Initiative for

IDA16 and AfDF12: Request: $83.5 million

Same schedule as IDA and AfDF

Treasury requests $83.5 million in FY 2012 as payment toward the U.S. MDRI commitment in 

the IDA16 and AfDF12 periods. As much as an additional $122 million could be generated for 

MDRI over the next three years by the early encashment of full and timely payments of the U.S.’s 

IDA16 and AfDF12 contributions. Beyond the IDA15 replenishment period, donor commitments 

to MDRI, including from the United States, will increase in order to match the original schedule 

over which beneficiary countries would have repaid the debts. This will make early encashment 

credits alone insufficient to cover the full cost of U.S. MDRI commitments and separate direct authorization and appropriations will be required in order to meet those commitments.
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OFFICE OF TECH N ICAL ASSISTANCE

OFFICE OF TECHNICAL 

ASSISTANCE

“The level of trust that I developed with ... the OTA-US Treasury organization was [...] instrumental during my tenure as head of the Central Bank of Paraguay. I was able to leverage on 

their collective expertise on several matters, ranging from monetary policy issues, inflation measurements, reserve management, Central Bank bill issuance, and re-capitalization of Central 

Bank matters, amongst others.”

Monica Perez dos Santos, former President of Central Bank of Paraguay, February 2008

Effective government financial management is the core element of a functioning state. It fosters 

national economic growth and enables a government to provide better services for its citizens. 

For over 20 years, Treasury’s Office of Technical Assistance (OTA) has been highly successful in 

helping developing countries worldwide to strengthen their capacity to manage public finances 

– through efficient revenue collection, well-planned and executed budgets, judicious debt management, fundamentally sound banking systems, and strong controls to combat corruption and 

economic crimes.

Treasury International Affairs Technical Assistance

Treasury International Affairs

Technical Assistance Request: $30.1 million

Program Funding

Acknowledging the fundamental importance of OTA’s mission, the President’s FY 2012 budget 

request for OTA provides $30.1 million to strengthen economic and financial governance in fragile 

and developing countries. 

The request supports OTA’s focus on five core financial disciplines: revenue policy and administration, budget and financial accountability, government debt issuance and management, banking and 

financial services, and economic crimes. The President’s request also allows for a modest, but important expansion of OTA’s work in priority areas, including infrastructure finance, and increasing 

access to financial services and climate finance, both G20 commitments. The request also invests in 
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50 OFFICE OF TECH N ICAL ASSISTANCE

OTA’s efforts to promote regional integration and increased capital flows among countries in East 

Africa, West Africa, and Central America. 

U.S. Leadersh

OTA’s experts work side-by-side with government officials in finance ministries and central banks 

in more than fifty countries around the globe – in Asia, the Middle East, Africa, and Latin America 

and the Caribbean. OTA advisors are engaged in national security priority countries, including 

Iraq, Afghanistan, Pakistan, and Haiti. They are also helping to increase public financial management effectiveness and remove constraints on economic growth in countries targeted under the 

President’s Partnership for Growth, such as El Salvador, Ghana, and Tanzania. By building public 

financial capacity, OTA’s work is an investment in the success and sustainability of other U.S. foreign assistance – from agriculture to global health to democracy to conflict prevention. Further, 

Treasury technical assistance provides countries with the knowledge and skills required to move 

towards financial self-sufficiency – the capability to raise and better manage their own revenues 

and eventually to move beyond international aid. At its heart, OTA programs build a necessary 

condition and framework for a country’s anti-corruption efforts through direct means – mentoring 

the investigation of financial crimes – and indirect means – improving the professionalism of the 

civil service.

OTA is recognized as one of the most comprehensive repositories of U.S. Government expertise 

in financial sector capacity building and one of the greatest values for the U.S. development dollar. 

With a relatively modest budget, OTA helps partner countries to safeguard scarce public resources, 

finance critical services, and achieve sustainable and tangible outcomes that affect peoples’ lives, 

such as:

• In Haiti, OTA’s mentoring and training of the national police and the financial intelligence 

service has resulted in the seizure of significant criminal assets. Evidence gathered by Haiti’s 

financial intelligence service resulted in the forfeiture of $20 million in narcotics traffickingrelated money laundered through Haitian and U.S. financial institutions. Additionally, a total 

of $2.6 million in seized criminal assets was restored to the Government of Haiti and is being 

utilized to strengthen their law enforcement and financial intelligence services. 

• In Guatemala, OTA work focuses on increasing access to financial services for small borrowers. 

These borrowers are typically among the poorest – often women from indigenous communities. Even small loans can enable these borrowers to engage in self-employment projects that 

generate an income. Our work focuses on creating a policy and regulatory environment that is 

prudentially sound and that enables innovative financial inclusion.

• In Ghana, OTA provided key assistance in creating a pioneering $750 million bond issue, diversifying the country’s sources of financing for key public services, including energy and transportation infrastructure and paving the way for sub-Saharan Africa to integrate into the international financial system. As a result of these efforts, Ghana became the first post-HIPC country 

to enter the international bond markets and proved by example the progress and achievement 

possible for developing countries in the region.
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OFFICE OF TECH N ICAL ASSISTANCE

• Within the East African Community, OTA works to increase capital flows among member 

countries. In cooperation with the Governments of Kenya, Uganda, Tanzania, Burundi, and 

Rwanda, our assistance is supporting regional economic growth by harmonizing fiscal, monetary, and economic policies. The goal is a larger, more efficient market and more robust crossborder trade and investment. Citizens benefit through wider availability of goods and services, 

lower prices, increased economic opportunity, and ultimately a higher standard of living.

In addition to its internal performance monitoring and evaluation efforts, OTA was one of seven 

agencies studied in a 2010 assessment of U.S. aid effectiveness. The State Department/USAID-commissioned report repeatedly singled out Treasury technical assistance for praise in strengthening 

host country capacities, showing support for principles of country ownership, achieving alignment 

with host country priorities, managing for development results, fostering mutual accountability 

with host country officials, and evaluating its own performance.
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M DB BASICS

MDB BASICS

What are the MDBs?

The United States is a member of several multilateral development institutions, including the: 

• World Bank

• Inter-American Development Bank

• Asian Development Bank

• African Development Bank

• European Bank for Reconstruction and Development

• International Fund for Agricultural Development

• North American Development Bank

The development banks are not banks in the usual sense. They are owned by member countries 

and provide financial and technical assistance to emerging markets and developing countries. The 

United States is the largest shareholder in the World Bank and Inter-American Development Bank, 

the co-largest shareholder (with Japan) at the Asian Development Bank, and the largest non-regional shareholder of the European Bank for Reconstruction and Development and the African 

Development Bank. 

What is Treasury’s role?

In the United States Government, Treasury is charged with leading the United States’ engagement 

in the multilateral development banks.  For the five largest institutions, the United States appoints 

an Executive Director (USED), who is based at the banks and represents U.S. interests.  Treasury 

works closely with the USEDs and a wide-ranging interagency group on development bank issues, 

with the Department of State and USAID playing important roles as Alternate Governors of the 

MDBs.  

How do the MDBs finance development projects? 

Most of the MDBs have two financing facilities, which are frequently referred to as “windows,” from 

which they make loans and provide grants:
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54

• The “soft loan” window is for concessional lending that provides loans on highly favorable terms 

(e.g., extremely low or no interest, long repayment periods and/or grants) to countries that are 

too poor or unstable to borrow from private markets. These are the “soft loan” or concessional 

windows for each MDB:

o International Development Association (World Bank Group)

o African Development Fund (African Development Bank Group)

o Asian Development Fund (Asian Development Bank Group)

o Fund for Special Operations (Inter-American Development Bank)

Because the European Bank for Reconstruction and Development is private sector-oriented, it does 

not have a concessional window. 

• The “hard loan” window is for non-concessional lending that provides loans to middle-income 

countries, such as Colombia and Botswana, and some creditworthy low-income countries, such 

as Indonesia and Nigeria, at market-based interest rates. These are the “hard loan” or nonconcessional windows: 

o The International Bank for Reconstruction and Development (World Bank)

o African Development Bank

o Asian Development Bank

o Inter-American Development Bank

o European Bank for Reconstruction and Development

How are the MDBs funded?

Countries are referred to as “shareholders” in an institution and hold a certain percentage of shares 

based on their contributions. 

At times, shareholders provide new funding to support the hard loan and/or soft loan windows. 

This funding can take three forms:

• Capital replenishments

• General capital increases

• Selective capital increases

Capital Replenishments: Because financing for the “soft loan” windows is provided 

on such generous terms to the very poorest countries, concessional funds need to be 

replenished every three to four years. When 

fully funded, U.S. funding commitments 

are paid out in equal installments over the 

replenishment period. 

FY12 Note: In the FY12 Budget Request, 

the Administration seeks funding to support replenishments of the soft loan 

windows of the World Bank and the African Development Bank, both of which 

are negotiated on a three-year cycle. We 

also request funding for the third year 

(out of four) of the Asian Development 

Fund’s replenishment. 

M DB BASICS
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M DB BASICS

General Capital Increases

Under a general capital increase (GCI), MDB shareholder governments agree to increase capital to 

support the MDBs “hard loan” windows by purchasing additional shares in the institution. Unlike 

replenishments, GCIs happen infrequently because these windows are largely self-financing. Periodically however, MDBs will seek to bolster their capital in order to increase or sustain lending 

levels. 

The financing arrangements for GCIs are unique. Unlike replenishments, only a small portion of the total 

commitment is paid directly to an MDB. This portion 

is called “paid-in” capital, and typically ranges from 

5-10 percent of the total increase. The pay-in period 

often ranges significantly (e.g., from three to eight 

years). 

The remainder of the commitment is made in the form 

of “callable capital.” Callable capital represents a financial commitment made by shareholders, but there is 

no actual transfer of funds. These commitments are 

meaningful because they enable the MDBs to borrow 

against them, and, in turn, lend to borrowers at rates 

lower than what they could obtain in the markets. An 

MDB can only seek the transfer of callable capital to their own accounts in the unlikely event that 

it becomes unable to access private capital markets or use its own resources to cover obligations on 

its own loans (i.e., funds borrowed on the market) or on loans it has guaranteed. No MDB has ever 

made a call on callable capital. 

Selective Capital Increases 

A selective capital increase (SCI) is not, strictly speaking, a fundraising vehicle, but is used to allocate new 

shares to eligible members based on economic weight, 

financial contributions and development contributions. An SCI is a means of realigning shareholding to 

increase the share of developing countries and countries with economies in transition in a bank’s decision 

making. Unlike a GCI, where shares are allocated to 

members in proportion to their existing shareholding, 

this realignment is important to better reflect global 

trends and ensure that the poorest countries have a 

voice. 

FY12 Note: For FY12, the Administration requests appropriations for the first installment of 

three GCI commitments, and the 

second installment of the U.S. payment to the Asian Development 

Bank. We also request Congressional authorization for a temporary callable capital increase for 

the European Bank for Reconstruction and Development. 

FY12 Note: For FY 2012, Treasury 

requests authorization to support 

an SCI at the International Finance Corporation, in which the 

United States will not participate. 

This will allow other countries to 

provide new capital, diluting our 

share by 2.6 percent. 
T R E A S U R Y I N T E R N A T I O N A L P R O G R A M S

56 M DB BASICS

What do new capital commitments mean for

the United States?

Negotiations for new capital are not limited to questions of financing needs. In fact, the United 

States has used the opportunity created by capital increase negotiations to pursue a robust agenda 

for new policy commitments from the institution and other shareholders. The United States has 

consistently used its leadership position to advocate for new initiatives designed to strengthen development effectiveness. Typically, we focus on policies to strengthen transparency, governance, 

accountability and results. Recently, we have also emphasized the need for policies to strengthen 

fiscal discipline within the MDBs and protect capital. In addition, we have successfully pressed 

for MDBs to transfer an increasing share of profits from the hard loan windows to the soft loan 

windows that support the poorest. These transfers achieve two important objectives: They help 

the MDBs maintain their focus on the neediest borrowers and they reduce the financial burden on 

shareholders. 

What are the implications for failure to meet these U.

obligations to the MDBs?

GCIs:  When a shareholder fails to purchase the shares that it agreed to buy in the capital increase 

negotiations, the relative shareholding of that country will become diluted.  Voting shares are adjusted to reflect contributions as they come in from shareholders, such that delayed contributions 

will have an impact on the U.S.’s current voting share. Any shares allocated to a country that are 

not paid for within the allotted subscription period will be moved to the Bank’s unallocated capital, 

potentially making them available for other shareholders to acquire. 

For example, at the Asian Development Bank, the United States has had an important governance 

arrangement where both the U.S. and Japan have 12.5 percent shareholding and together have a 

veto over key issues.  Because other member countries have already elected to pay for their subscriptions, China now has a larger voting share than the United States and is second behind only 

Japan. If the United States fails to make its GCI payments on time, its shareholding could become 

further diluted, weakening the U.S. leadership in the institution.  If the United States fails to pay for 

its shares, the U.S. will permanently lose its leadership position at the AsDB which would likely alter 

the strategic direction of the Bank.

Replenishments:  Almost two-thirds of U.S. arrears to the MDBs are to the institutions that provide 

support for the poorest countries (International Development Association, the Asian Development 

Fund, and the African Development Fund).

Our large and longstanding arrears not only deprive MDB recipient countries of resources, they 

also undermine our leadership in these institutions.  For example, during the negotiations at the 

latest replenishment of the GEF, the United States sought to leverage a significant increase in U.S. 

support in exchange for similarly large increases from other donors. However, other shareholders 

pointed to the significant U.S. arrears as evidence that the U.S. would not be able to deliver on an 

increased pledge and scaled back their own pledges accordingly. Similarly, some countries now link 

their contributions to U.S. payments, which magnifies the impact of any U.S. arrears.
AUTHOR IZATION R EQU ESTS 57

T R E A S U R Y I N T E R N A T I O N A L P R O G R A M S

AUTHORIZATION REQUESTS

 FOR FY 2012

New Replenishments

International Development Association, Sixteenth Replenishment (IDA16). The Administration seeks authorization for the U.S. contribution of $4,075,500,000 over the three-year replenishment period, subject to obtaining the necessary appropriations.

African Development Fund, Twelfth Replenishment (AfDF12). The Administration seeks authorization for the U.S. contribution of $585,000,000 over the three-year replenishment period, 

subject to obtaining the necessary appropriations.

Debt Relief

Multilateral Development Relief Initiative (MDRI) - International Development Association 

and African Development Fund. The Administration seeks authorization of $474,000,000 for 

U.S. MDRI commitments to IDA and for $61,502,123 for U.S. MDRI commitments to the AfDF, 

consistent with the 2005 agreement.

General Capital Increases

International Bank for Reconstruction and Development General Capital Increase and Selective Capital Increase plus International Finance Corporation Selective Capital Increase 

General Capital Increase. The Administration seeks authorization for the U.S. commitment of 

$9,780,361,991 with $586,821,720 authorized to be appropriated for paid-in shares of the Bank. 

The balance of authorized capital is callable and does not require appropriated funds. This increase 

in the United States capital stock subscription will be committed over five years, subject to obtaining the necessary appropriations.

Selective Capital Increase. The Administration seeks authorization for the U.S. commitment of 

$4,639,501,466, with $278,370,088 authorized to be appropriated for paid-in shares of the Bank. 

The balance of authorized capital is callable and does not require appropriated funds. This increase 

in the United States capital stock subscription will be committed over four years, subject to obtaining the necessary appropriations. The Administration will also be seeking authorization to accept 
T R E A S U R Y I N T E R N A T I O N A L P R O G R A M S

58

an amendment of the IBRD’s Articles of Agreement to increase the basic votes of all members as 

agreed in 2008. 

International Financial Corporation Selective Capital Increase. The Administration seeks authorization for the U.S. Governor of the IFC to vote in favor of a decision to increase the capital base of 

the Corporation – an increase in which the U.S. will not participate. The Administration will also 

be seeking authorization to accept an amendment of the IFC’s Articles of Agreement to increase 

the basic votes of all members. 

African Development Bank Sixth General Capital Increase. The Administration seeks authorization for the U.S. commitment of $4,322,228,221 with $259,341,759 authorized to be appropriated 

for paid-in shares of the Bank. The balance of authorized capital is callable and does not require 

appropriated funds. This increase in the United States capital stock subscription will be committed 

over eight years, subject to obtaining the necessary appropriations.

Inter-American Development Bank Ninth General Capital Increase. The Administration seeks 

authorization for the U.S. commitment of $21,004,064,337 with $510,090,175 authorized to be appropriated for paid-in shares of the Bank. The balance of authorized capital is callable and does 

not require appropriated funds. This increase in the United States capital stock subscription will be 

committed over five years, subject to obtaining the necessary appropriations. The Administration 

will also be seeking an authorization for the U.S. Governor to vote in favor of an increase of the 

capital stock of the Bank that will allow for the increased U.S. subscription.

European Bank for Reconstruction and Development Temporary Callable Capital. The Administration seeks authorization for the U.S. commitment of $1,252,331,952 in temporary callable 

capital, with no accompanying paid-in capital. This callable capital does not require appropriated 

funds.

AUTHOR IZATION R EQU ESTS
FE B R UARY 2011