Faster approvals, simpler structure, and more emhasis on impact will be hallmarks of World Bank, its chief says

World Bank Group President Ajay Banga kicked off the IMF and World Bank Group’s spring meetings last Thursday with a press conference at which he talked about challenges facing the global economy and how the group plans to expand its role in addressing them (watch, runtime: 34:26). The online presser was embargoed until the following day and aired in a recorded live-streaming video format.

What to expect this week: The group has recently struck partnership agreements with the Inter-American Development Bank and the Islamic Development Bank and is expected to announce two additional agreements this week, according to Banga. Expect the group to spill the beans about its new climate outcomes tracking approach which focuses primarily on impact, Banga added.

G20 wants the WB Group to play a larger role on the global scale: Banga touched on some of the most-talked-about global issues including climate change, food insecurity, pandemics, poverty, and scarce resources, saying that “G20 leaders challenged the World Bank Group to change and to be a bigger part of the solution,” with the bloc providing a roadmap of 27 recommendation for the group to boost the speed and simplicity of its processes, “leveraging our [the group’s] balance sheet, engaging partners and the private sector.

A faster approval process: The WB Group has already cut its approval process by three months and is on track to cut it by another three months by the end of 1H 2025. “A few months ago, the average World Bank project approval process took 19 months,” said Banga.

Simpler organizational structure: Starting from 2H 2024 UN lenders including the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA) “will have a single joint country representative in 20 countries,” Banga added.

More bucks for more bang: The group has liberated USD 40 bn over the past 10 years from its balance sheet by adjusting its loan to equity ratio to be able to take part in more projects with bigger investments. The group plans to use some of its tools including the portfolio guarantee mechanism, and the hybrid capital instrument “ to leverage every dollar we receive, six to eight times over the coming decade,” Banga explained.

A new fund for cross-border projects: Earlier this month, the group “began offering 50-year financing through IBRD at no additional cost for projects that provide cross-border benefits,” said Banga, adding that the group has launched a “Livable Planet Fund that can be funded by governments, but also by philanthropies,” to finance these new incentives. “All these instruments, what they do is they help us support the ambitions of middle-income countries, but we must do all we can to lift up lower-income countries,” he highlighted.

Mobilizing funds for lower-income countries: The IDA replenishment is coming up at the end of 2024 and the group is aiming to pool together generous funds to refill the association’s coffers. “IDA is the largest source of concessional financing for lower-income countries,” said Banga.

Data openness to encourage private investment in developing economies: “Last month, we started to publish our proprietary data as a global public good to kind of inspire investor confidence,” said Banga, explaining that the group started by publishing private sector data by country income level, private sector default data categorized by credit rating, and sovereign default and recovery rate statistics dating back to 1985.

Two new platforms in the pipeline: A new guarantee platform will be introduced this summer, promising enhanced simplicity, accessibility, and faster payment processing, said Banga, adding that this move will set the stage to increase annual guarantee issuances by 3x to USD 20. Additionally, the group is working on bringing a securitization platform online in a bid to bring some of the USD 70 tn managed by pension funds, sovereign wealth funds, and ins. Companies globally to emerging markets.

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