An Evaluation of the World Bank's Trust Fund Portfolio

APPENDIX B: TRUST FUND USE IN THE EIGHT CASE STUDY COUNTRIESpreparation, implementation, and supervision of cofinanced projects; supplement Bankbudget for economic and sector work; and to fund free-floating technical assistance. In a fewcases, donors have created additional small trust funds to support the supervision of a maintrust-funded program or project. Overall, trust funds have proven an indispensibleinstrument for development assistance in Ethiopia, primarily because they permit keydonors to continue substantial funding in the social sectors under political conditions thatmake them reluctant to provide direct support to the government.IndonesiaThe World Bank program in Indonesia is one of its largest country programs, including 29active projects totaling $4.2 billion, along with a Development Policy Loan with a DeferredDrawdown Option of $2.0 billion (not yet disbursed). Indonesia’s trust fund portfolio hasgrown dramatically in recent years, mainly due to a series of natural disasters in 2004 and2006 and continued expansion of the use of trust funds for technical assistance. Indonesiastands apart from the regional average in the predominance of technical assistance trustfunds. New grant commitments averaged: $82 million/year during FY02–05; $377million/year during FY06–07; and $154 million/year during FY08–09. As a share of alldisbursements (IBRD, IDA and trust funds), over FY02–09, trust funds ranged from 8percent in FY05 to 22 percent in FY06, averaging 15 percent over the entire period. With 197trust funds and a total grant amount of $1.1 billion in its current portfolio, Indonesia is thelargest recipient of trust funds in the East Asia and the Pacific Region (37 percent of FY09total) and has the largest portfolio in the Bank (28 percent of all trust funds). Although themajority of FY02–10 trust fund disbursements in Indonesia have been used for disasterreconstruction, other major uses have included the co-financing of two large governmentprograms (in community empowerment and education) and support for technicalassistance, particularly in areas of public financial management, decentralization, andeducation. Overall, in Indonesia, trust funds are a core business of the Bank.RwandaOver the past decade, the World Bank maintained a substantial presence in Rwanda, withcommitments averaging about $100 million annually. Beginning in 2003, the primarymechanism for financial support has been a series of Poverty Reduction Strategy Grants,development policy operations that support the government’s general budget. The trustfund portfolio has included 42 trust funds since FY02, with a total disbursed of $380 millionover the period (however, this list is not comprehensive). Most trust fund support is fromglobal programs, with the vast majority of trust fund resources (two-thirds over the lastthree fiscal years) having come from the Global Fund. There are few in-country, countryspecifictrust funds of any importance – this may be due to comfort among donors inworking directly with the government through budget support or otherwise using countrysystems, obviating the need for tight World Bank oversight. Trust fund disbursements roserapidly over the period FY02–09, even surpassing IDA disbursements in FY09. The keyreason for this was the EFA-FTI, which in Rwanda was always processed as a DPO. Thisrise has accompanied the perception among donors that the country is well-managed, givenits level of aid dependence, that the government development program is wholly ownedand that the program is likely to succeed. Trust funds in Rwanda are used mainly for91