An Evaluation of the World Bank's Trust Fund Portfolio

APPENDIX F: RELIANCE ON DONOR FUNDS TO SUPPORT INTERNATIONAL FINANCE CORPORATION ACTIVITYEuropean Commission) committed just under $20 million, and private foundations, $9.6million.Donor commitments are now typically pooled, 1 for multiyear programs, and IFC’scontribution through FMTAAS is designed as a complementary long-term pot of funds,covering regions or activities where donor funding is scarce. Hence Advisory Servicesprograms are, in effect, funded several years out. Donor funding is in some cases still raisedon a project–by–project basis, as in Central and Eastern Europe. FMTAAS involves taking aportion of IFC’s retained earnings and designating it to FMTAAS (using a sliding-scaleformula) on a yearly basis by the IFC Board, based on IFC management proposal.Recognizing the likelihood of fluctuations in IFC’s financial performance, FMTAAS wasdesigned to provide a stable (multi-year) funding source for the advisory business. Annualdesignations to FMTAAS are linked to IFC’s financial performance through a sliding-scaleformula based on net income. Allocations from FMTAAS to specific programs are made byIFC management, with Board approval required, depending on the size of the fundingrequested.Trust-funded Advisory Services activities are fully aligned with IFC’s regional strategiesand create an integral part of IFC’s overall business strategy. Each regional strategy forFY11–13 presented to IFC management included Advisory Services programs financedthrough trust funds. IFC manages an active portfolio of 736 Advisory Services projects forover $850 million commitments (as of FY10). In FY10, Advisory Services expenditurestotaled $268 million. IFC employs over 1,000 advisory staff in 84 offices across 66 countries.Through its Advisory Services, IFC provides advice, problem solving, and training tocompanies, industries, and governments and is organized into four business lines: access tofinance, investment climate, public-private partnerships, and sustainable business advisory.Access to Finance: IFC’s goal is to help increase the availability and affordability offinancial services, particularly to micro, small, and medium enterprise clients. Thisbusiness line focuses mainly on building bank and nonbank financial institutions;improving financial infrastructure; and improving the legal and regulatoryframework. At the end of FY10, IFC had an active portfolio of 238 projects in 68countries valued at nearly $290 million.Investment Climate: IFC’s goal is to help governments implement reforms toimprove their business environment and encourage and retain investment, thusfostering competitive markets, growth, and job creation. At the end of FY10, theactive portfolio accounted for 144 projects in 67 countries for over $185 million.Public-Private Partnerships: IFC advises governments on structuring public-privatepartnership transactions in infrastructure and other public services. IFC’s advicehelps governments achieve long-term economic grown and better living standardsby harnessing the potential of the private sector to increase access, enhance quality,and improve the efficiency of public services such as electricity, water, health, andeducation. IFC’s advice is based on global best practices and balances the needs ofinvestors with public-policy considerations and the needs of the community. At theend of FY10, the active portfolio amounted to 91 projects in 53 countries for $130million.114