The World Bank’s Board of Executive Directors has endorsed a move that will make the Bank’s original financing instrument more effective and clear for governments, staff, and civil society organizations, the Bank announced today.
The Bank has consolidated the policies and procedures governing Investment Financing, the main lending vehicle available to clients to support specific investments ranging from infrastructure to social safety nets to judicial reform. Investment Finance was the Bank’s original financing instrument for making loans for post-World War II reconstruction in Europe in the late 1940s. Over time, the lending policy has evolved, resulting in a maze of 30-some policy and procedure statements that have now been consolidated into a single coherent policy. The critical policies of procurement and environmental and social safeguards are on a separate track and are now undergoing public consultations.
“This is part of a larger effort to modernize the Bank and make it more focused on results and solutions; less bureaucratic and more accountable to our clients, shareholders and the beneficiaries of Bank investments,” said Managing Director, Caroline Anstey.
The new policy retains the content of the previous operational policy and procedure statements, restating them in a way that is clear to clients, staff, and civil society.
“Clear policies are the foundation of accountability,” said Joachim von Amsberg, Vice President for Operational Policy and Country Services. “Consolidating our Investment Lending Policy is an important step to make this instrument more effective for the Bank’s range of clients. This effort will help our clients and staff focus more on problem solving, implementation, and delivering results – and less on bureaucracy.”
While largely a consolidation effort, the new policy introduces a few changes to better respond to client needs. One of the key changes is extending the rapid response option used when countries face natural disasters or conflict to small states and fragile countries, as recommended in the 2011 World Development Report on fragility and conflict. Another change relates to how economic analysis is done that will maintain the mandatory nature and rigor of the analysis while taking into account the country and sectoral considerations.
“Economic analysis remains a top priority of the Bank. It is critical to provide a solid analytical base,” said Aloysius Ordu, Director for Operations Policy and Quality.
The new policy will go into effect in 2013.
More information is available at www.worldbank.org/investmentlending