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16:15 – 18:00 Session Four Open Forum: Working Together Towards Alignment and Selectivity Moderators : Michael Koch

16:15 – 18:00 Session Four Open Forum: Working Together Towards Alignment and Selectivity Moderators : Michael Koch , Director, Trust Fund Operations, WB Anita Bhatia , Director, Partnerships and Advisory Services, Operations Department, IFC Presenters :

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16:15 – 18:00 Session Four Open Forum: Working Together Towards Alignment and Selectivity Moderators : Michael Koch

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  1. 16:15 – 18:00 Session Four • Open Forum: • Working Together Towards Alignment and Selectivity • Moderators: • Michael Koch, Director, Trust Fund Operations, WB • Anita Bhatia, Director, Partnerships and Advisory Services, Operations Department, IFC • Presenters: • Roberto Tarallo, Manager, CFPTO, WB • UrkalyIsaev, Manager, CPATF, IFC

  2. World Bank Group Trust Funds Working Together Towards Alignment and Selectivity Roberto Tarallo Manager, CFPTO World Bank Urkaly Isaev Manager, CPATF IFC Session 4 May 21, 2013 The World Bank Group

  3. WBG Trust FundPortfolio: Recent Trends Funds Held in Trust, FY08 – FY13Q2 (US$Billions) WBG Trust Funds: Cash Contributions and Disbursements, FY08-FY12 (US$Billions) Cash contributions US$Billions US$Billions Disbursements IBRD/IDA TFs • FIFs account for the bulk of volume and growth, US$18 billion at end FY12 • IBRD/IDA TFs remain stable, US$10 billion at end FY12 • Cash contributions to IBRD/IDA TFs back to FY10 level, US$4.4 billion in FY12 • Disbursements show an upward trend, US$4.3 billion in FY12. Spike in IFCTFdisbursements in FY10mainly due to response to global financial crisis in the form of liquidity support to trade finance 4

  4. WBG Trust Funds: Multilateral Dimension Number of Active Trust Funds, FY08 – FY13 IBRD/IDA RETF Disbursements by Country Eligibility, FY08-FY12 (in US$ million) 761 757 780 748 720 706 IBRD/IDA TFs 61% of all project expenditures are for IDA countries 58% of all recipient executed trust funds to IDA countries IFC TFs IFC Advisory Services Project Expenditures, FY09-FY12 (in US$ million) 213 247 233 273 289 284 IDA $428 61% Others $276 35% • 10 % reduction in the number of IBRD/IDA trust fund accounts over the last 4 years • Growth of IFCTFsdriven by annual average growth of 6-10% in Advisory Services • MDTFs share in the total number of IBRD/IDA accounts increased to 50% of the total in FY13Q2 up from 31% in FY08 FCS $144 20.5%

  5. IBRD/IDA TFs: Disbursements Primary Role of Recipient in TF Execution FY08-FY12 RETF in Support of Fragile and Conflict Situations, FY08-FY12 • Fragile States receive about 40% of total RETF disbursements • The ratio of disbursements between RETFs and BETFs remains largely stable over time • RETF disbursements of US$3.6 billion in FY12 accounted for 85% of total disbursements of IBRD/IDA TFs

  6. Trust Fund Reform Roadmap Strategic Alignment and Selectivity • Cost Recovery and Efficiency Trust Fund Reform Pillars: • IBRD/IDA Trust Funds: newInitiatives to enhance “upstream” strategic alignment • Umbrella Facilities • Portfolio Reviews • TF Fundraising Coordination tools • FIFs: New Partnership and FIF Framework • IFC TFs: Focus on global thematic trust funds and partnership framework agreements • Fees adjustments to achieve full cost recovery (IBRD/IDA TFs) • Further TF fee simplification (IBRD/IDA TFs) • Raising the minimum threshold for new TFs (WBG TFs) • Phase out of co-terminus appointments (WBG TFs) • I. Strategic Alignment • Integration in Business Processes • Oversight by Senior Management and Board • III. Cost Recovery and Efficiency • IBRD/IDA Trust Funds: principle is to apply Bank processes regardless of funding source • Integration of BETFs in budget and planning processes • Integration of RETFs in operational policies and systems • Streamlining of small RETF grants • TF Results Reporting • IFC TFs: Integrated into annual IFC budget & planning processes • Quarterly Business and Risk Review (WBG TFS) • Periodic Reporting: TF Annual Reports, TF Risk Report (WBG TFs) • New Web-based reporting tools (WBG TFs) • New FIFs subject to MDs-CFO review and Board approval • IV. Oversight by Senior Management and Board

  7. Strategic Alignmentand Consolidation • IBRD/IDA Umbrella Facilities • 4 pilot umbrella facilities (UF) established based on agreed principles • Gender, capacity building, trade, and education • Impact evaluation UF under preparation • WBGDonor Portfolio Reviews • More proactive management of the TF portfolio by individual donors • Improved understanding of overall TF portfolio to inform strategic discussions • Changes in the structure of a portfolio, consolidation (minimum threshold at donor side; revised approval processes/vetting ) • Streamlined MDTF exit procedure introduced • Resource Mobilization Coordination • VPU level vetting of fundraising activities (WBG TFs) • Quarterly fundraising projections (WBG TFs) • Donor dashboard (IBRD/IDA TFs) • Donor Partnership Practice Group (IFC TFs) • Enhanced WB-IFC Cooperation in TFs • Joint WB-IFC strategic donor TF portfolio reviews (Switzerland and Canada) • Joint Donor Consultation (EC) • Joint Trust Fund Annual Reports • Integrated financial overview reporting (Quarterly Business and Risk Review) • Joint work on new trust funds for WBG (Green Growth TF and Korea-WBG Partnership TF) • Global thematic facilities with public and private sector windows (Global Agriculture and Food Security Program and Climate Change Funds)

  8. Integration with Budget and Business Processes • RETFs follow Bank operational procedures • RETF grants part of modernization agenda, including IL reform • Guidelines for RETFs below US$5million (small grants) introduced in FY12 • Integration in Planning System • BETFs • Corporate: BETFs integrated in budget documents for FY13 and FY14, including Medium Term Financing Papers, and Corporate Scorecard • VPU: application of the same administrative expense planning for TFs as for Bank Budget expenditures • Integrated revenue- and expenditure planning to support WBG strategy (FY15) • IFC TFs • Follows IFC’s corporate budget and planning processes and project governance • Operations Portal Integration (FY14 – 15) • Merging reporting of RETF grants with Bank’s reporting - Phase 1 • Additional Financing, BETFs - Phase 2

  9. Cost Recovery and Efficiency • TF Cost recovery under continued review • Recent TF fee revisions aimed to address under-recovery of central unit costs • IBRD/IDA Fees – April 2011 • FIF Fees – July 2011 • Fee simplification study for IBRD/IDA TFs (in FY12)—suggests further scope for simplification of trust fund fees • Costing methodology under review • Phase out of WBG coterminous appointments • Effective October 1, 2013, the “coterminous label” will be removed • Simplify and harmonize staffing and reporting practices, reduce administrative costs, staff mobility Volume of Signed Contributions and Number of IBRD/IDA Trust Funds, by Size, as of end FY12 • Raising the minimum IBRD/IDA TF Size to $2 million • Effective July 1, 2013 • Promotes consolidation and greater efficiency

  10. Oversight by Senior Management and the Board • Budget Documents and Medium Term Business and Finance Papers - discussed by Board • i.e. dedicated chapter on TFs in MTBF papers for FY12-14, FY13-15 • Quarterly Business and Risk Review (QBRR)- discussed by Audit Committee every quarter • New chapter on WBG TF financial trends (FY11) • New chapter on WBG TF financial risks (FY12) • WBG TF Investment Strategy Review (FY11) • Taking account of the post-financial crisis environment • Reviewed by management’s Finance Committee and by the Audit Committee • WBG TF Open Data • www.aidflows.org • finances.worldbank.org • www.worldbank.org/fiftrustee

  11. Evolution and Future Directions of TF Management 2013 -  : Aligning the portfolio and TF management with the emerging WBG strategy 2007 – 2013 : Mainstreaming into the WBG business 2001 -2007 : Strengthening TF fiduciary systems 12

  12. Aligning Trust Funds with WBG Strategy • Trust Funds will be an important instrument in supporting the WBG’s strategy and goals • Dynamic selectivity: link to goals, comparative advantage, impact • Upstream review of new TFproposals • Strategic dialogue and consultations with TF donor partners • Potentially relevant work streams: • Country level: • CAS products for WBG to include TF mobilization, based on country and corporate priorities • Global level: • Umbrella Principles • New Management Framework Partnership Programs and FIFs • New IFC strategic partnership programs with donors

  13. Aligning Trust Funds with WBG Strategy • Trust Funds strategic management and planning: • Strengthen a lifecycle approach for all programmatic TFs (entry, exit) • Focus on robust results frameworks and their consistency with WBG strategic goals • As requested by the Board, more coordinated business planning and integrated revenue/expenditure framework • Financing models that can help strategic alignment and selectivity: • Co-financing • Country Umbrellas • Global Thematic UmbrellaFacilities/Funds

  14. Questions for Discussion • How can we work together to strengthen selectivity and the strategic alignment of trust fund programs? • What is the potential for expanding the use of umbrella principles, including at country level? • Are there other Trust Fund models that ensure selectivity and strategic alignment?

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