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About the World Bank Group

 
 

World Bank Group Institutions
Founded in 1944, the
World Bank Group consists of five closely associated institutions: the International Bank for Reconstruction and Development (IBRD); International Development Association (IDA), International Finance Corporation (IFC); Multilateral Investment Guarantee Agency (MIGA); and the International Centre for Settlement of Investment Disputes (ICSID). James D. Wolfensohn is the President of the five institutions.



Basic Facts
IBRD – The International Bank for Reconstruction and Development. The IBRD, founded in 1944, is the World Bank Group’s main lending organization. It provides loans and developments assistance to middle-income countries and creditworthy poorer countries. IBRD loans are used to pay for development projects, such as building highways, schools, and hospitals, and for programs to help governments change the way they manage their economies.
  • Maturity on loans: 15 to 20 years, with a three-to five-year grace period.
  • Source of funds: The IBRD raises most of its money on the world’s financial markets. It sells bonds and other debt securities to pension funds, insurance companies, corporations, other banks, and individuals around the world.
  • Ownership: IBRD is owned by its 184 member countries. Each of these countries has voting power in the institution. Voting power is based on a country’s shareholding, which in turn is based on a country’s economic strength.

IDA – International Development Association. The IDA was established in 1960 to provide assistance on concessional terms to the poorest developing countries-those that cannot afford to borrow from the IBRD. IDA loans, known as "credits," are provided mainly to countries with annual per capita incomes of about $925 (in 1996 dollars) or less. By this criterion about seventy countries are eligible.
  • IDA credits are interest free, but carry a small service charge (0.75 % of the loanas annual administrative charge).
  • Terms on credits: 35 or 40 years, with a 10-year grace period.
  • Sources of funds: IDA resources are derived from contributions from governments, IBRD profits, and repayments on earlier IDA credits.
  • Ownership: IDA has 159 member countries. A country must be a member of IBRD before it can join IDA.

IFC – International Finance Corporation. The IFC was established in 1956 to help strengthen the private sector in developing countries. IFC lends directly to the private sector, while the IBRD and IDA lend to governments. IFC aids the private sector by providing long-term loans, equity investments, guarantees and "standby financing," risk management and "quasi-equity instruments," such as subordinated loans, preferred stock, and income notes.
  • Interest rate on IFC loans and financing: Market rates, which vary between countries and projects. Maturity on loans: three to 13 years, with grace periods as long as eight years.
  • Source of funds: About 80 percent is borrowed in the international financial markets through public bond issues or private placements, 20 percent is borrowed from IBRD.
  • IFC is owned by 174 member countries.

MIGA – Multilateral Investment Guarantee Agency. MIGA was established in 1988 to help developing countries attract foreign investment by providing guarantees to foreign investors against loss caused by noncommercial risks, such as expropriation and war. It also provides governments with advice on improving the climate for foreign investment as well as provides technical assistance to help countries disseminates information on investment opportunities.
  • Coverage: MIGA may insure up to 90 percent of an investment, with a current limit of $50 million per project.
  • Membership: 141 countries.
  • Guarantees: In fiscal 1997, MIGA issued 70 guarantee contracts worth about $614 million.

ICSID – International Centre for Settlement of Investment Disputes. ICSID was founded in 1966 to promote increased flows of international investment by providing facilities for the conciliation and arbitration of disputes between governments and foreign investors. ICSID also provides advice, carries out research, and produces publications in the area of foreign investment law.
  • Membership: 127 countries as of June 30, 1997.
  • Cases: Last year, six new requests for arbitration were registered and fifteen cases were pending before the Centre.
  • Research and publications: ICSID’s publications in the field of foreign investment law include multi-volume collections of investment laws and treaties and a semi-annual law journal.

 



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