2023 Annual Meetings

OFFICIAL USE ONLY ANNUAL MEETINGS OF THE WORLD BANK GOVERNORS DOCUMENTS  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO WB2023-0001 October, 2023 SCHEDULE OF MEETINGS FRIDAY October 13 8:45 a.m. Opening Ceremonies Address by Host Government Guest of Honor Address from the Annual Meetings Chair Annual Address by President, World Bank Annual Address by Managing Director, International Monetary Fund Procedures Committees Reports Chair, ICSID Administrative Council Adjournment NOTES: 1. The Meetings will be held at the Koutoupia (GB01), Bab Ighli Meeting Campus (Friday a.m. session). 2. The Development Committee will meet on Thursday, October 12, 2023 from 9:45 a.m. to 12:15 p.m. in the Chellah (GA01), Bab Ighli Meeting Campus. 3. The World Bank consists of the following: International Bank for Reconstruction and Development (IBRD) International Finance Corporation (IFC) International Development Association (IDA) Multilateral Investment Guarantee Agency (MIGA) International Centre for Settlement of Investment Disputes (ICSID) 4. Meetings of the Joint Procedures Committee (JPC) and MIGA Procedures Committee (MPC) will be held, if required, commencing at 5:30 p.m., Thursday, October 12, 2023 in the Agafay Room (SBO4), Bab Ighli Meeting Campus. JPC and MPC members should be prepared to meet at that time, if necessary. -1-  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO WB2023-0002 October, 2023 PROVISIONS RELATING TO THE CONDUCT OF THE MEETINGS ADMISSION 1. Sessions of the Boards of Governors of the World Bank Group (Bank) and the International Monetary Fund (Fund) will be joint and shall be open to accredited press, guests and staff. 2. Meetings of the Joint Procedures Committee shall be open only to Governors who are members of the Committee and their advisers, Executive Directors, and such staff as may be necessary. PROCEDURES AND RECORDS 3. The Chair of the Boards of Governors will establish the order of speaking at each session. 4. Governors may submit written statements in advance of the Annual Meetings by a deadline specified by the Secretaries of the Bank and Fund. Such written statements will be included in the record of the Annual Meetings. 5. The Secretaries will have verbatim transcripts prepared of the proceedings of the Boards of Governors. Transcripts of proceedings of the Joint Procedures Committee will be prepared only if a meeting is held. Transcripts of proceedings of the Joint Procedures Committee are confidential and available only to the Chair, the President of the World Bank Group, the Managing Director of the International Monetary Fund, and the Secretaries. 6. Reports of the Joint Procedures Committee shall be signed by the Committee Chair. PUBLIC INFORMATION 7. The Chair of the Boards of Governors, the President of the World Bank Group, and the Managing Director of the International Monetary Fund will communicate to the press such information concerning the proceedings of the Annual Meetings as they may deem suitable. 8. These Rules of Conduct applicable to Annual Meetings shall stand until they are modified by the Chair of the Boards of Governors acting jointly with the President of the World Bank Group and the Managing Director of the International Monetary Fund. -2-  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO WB2023-0003 October, 2023 AGENDA The 2023 Annual Meetings of the Boards of Governors of the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), and the International Development Association (IDA), and the Council of Governors of the Multilateral Investment Guarantee Agency (MIGA), together with the Administrative Council of the International Centre for Settlement of Investment Disputes (ICSID), will convene in Marrakech, Morocco, on Friday, October 13, 2023. The agenda is as follows: Page IBRD 1. Annual Report 6 2. Financial Statements and Annual Audit 7 (IBRD Document No. 1) 3. Allocation of FY23 Net Income 9 (IBRD Document No. 2) 4. Administrative Budget for FY24 12 (IBRD/IDA Document No. 1) 5. Selection of the Chair and Vice-Chairs of the Board of 27 Governors and Selection of the Members of the Joint Procedures Committee and its Officers for 2023-2024 (IBRD/IFC/IDA Document No. 1) IFC 1. Annual Report 29 2. Financial Statements and Annual Audit 30 (IFC Document No. 1) 3. Use of IFC’s FY23 Net Income: Retained Earnings 30 and Designation of Retained Earnings (IFC Document No. 1) 4. Administrative Budget for FY24 30 (IFC Document No. 1) IDA 1. Annual Report 6 2. Financial Statements and Annual Audit 8 (IDA Document No. 1) 3. Administrative Budget for FY24 12 (IBRD/IDA Document No. 1) -3-  WB2023-0003 Page MIGA 1. Annual Report 44 2. Financial Statements and Annual Audit 45 (MIGA Document No. 1) 3. Selection of the Chair and Vice-Chairs of the Council of 46 Governors and Selection of the Members of the MIGA Procedures Committee and its Officers for 2023-2024 (MIGA Document No. 2) ICSID's Administrative Council will convene thereafter to consider the following agenda: 1. Annual Report 49 (ICSID Document No. 1) 2. Proposed Budget for FY24 50 (ICSID Document No. 2) A meeting of the Joint Procedures Committee, followed by a meeting of the MIGA Procedures Committee, will be held, if required, prior to the Annual Meetings on Thursday, October 12, 2023 at 5:30 p.m. in the Agafay Room (SBO4), Bab Ighli Meeting Campus. JPC and MPC members should be prepared to meet at that time, if necessary. Mercy Tembon Vice President and Corporate Secretary *2022-2023 Joint Procedures Committee/MIGA Procedures Committee: Argentina, Benin, Botswana, Brazil, Canada, China, France, Germany, India, Italy, Japan, Kuwait, Mexico, Morocco, New Zealand, Norway, Poland, Russian Federation, Saudi Arabia, Singapore (Vice Chair), South Africa (Vice Chair), Türkiye, Ukraine (Chair), United Kingdom, United States. -4-  IBRD/IDA DOCUMENTS 5  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO The 2023 IBRD/IDA Annual Report will be available on the World Bank’s website. (www.worldbank.org/annualreport) -6-  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO IBRD Document No. 1 October, 2023 INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT BOARD OF GOVERNORS (DRAFT) Resolution No. __ Financial Statements, Accountants’ Report and Administrative Budget ___________________________________ RESOLVED: THAT the Board of Governors of the Bank consider the Financial Statements, Accountants’ Report and Administrative Budget, included in the 2023 Annual Report, as fulfilling the requirements of Article V, Section 13, of the Articles of Agreement and of Section 18 of the By-Laws of the Bank. -7-  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO IDA Document No. 1 October, 2023 INTERNATIONAL DEVELOPMENT ASSOCIATION BOARD OF GOVERNORS (DRAFT) Resolution No. __ Financial Statements, Accountants’ Report and Administrative Budget ___________________________________ RESOLVED: THAT the Board of Governors of the Association consider the Financial Statements, Accountants’ Report and Administrative Budget, included in the 2023 Annual Report, as fulfilling the requirements of Article VI, Section 11, of the Articles of Agreement and of Section 8 of the By-Laws of the Association. -8-  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO IBRD Document No. 2 August 3, 2023 REPORT OF THE EXECUTIVE DIRECTORS Allocation of FY23 Net Income 1. As of June 30, 2023, the General Reserve for the IBRD including cumulative exchange rate translation adjustment for all currencies was $31,269 million (before FY23 net income allocations). As of that date, the Surplus of the IBRD was $120 million, and the Special Reserve created under Article IV, Section 6 of the IBRD's Articles of Agreement totaled $293 million. 2. For the fiscal year ended June 30, 2023 (FY23), the IBRD recorded on a reported basis net income of $1,144 million. Allocable net income of $1,312 million is arrived at with the following standard adjustments, plus or minus any rounding amounts less than $1 million where applicable, to the reported net income: (a) an increase of $221 million to exclude the Board of Governors-approved transfers that was funded by FY22 net income or Surplus; (b) an increase of $167 million to exclude the net unrealized mark-to-market losses on non-trading portfolios, accompanied by a decrease to the Cumulative Fair Value Adjustments by the same amount; (c) a decrease of $39 million to exclude the net non-functional currency translation adjustment gains accompanied by an increase to the Other Reserves by the same amount; (d) a decrease of $193 million, representing the net effect of a $119 million decrease to exclude the excess of cash contributions over accounting pension expense, combined with a $74 million decrease to exclude IBRD’s share of investment gains related to Post-Employment Benefits Plan (PEBP) and Post-Retirement Contribution Reserve Fund (PCRF), accompanied by an increase of $193 million to the Pension Reserve; -9-  IBRD Document No. 2 e) an increase of $11 million to exclude $11 million net expenses relating to temporarily restricted funds accompanied by a decrease of $11 million to the Restricted Retained Earning f) an increase of $1 million, representing the excess of RAMP expenses over revenues, accompanied by a decrease to the Other Reserves by the same amount. 3. The Executive Directors have considered what actions to take, or to recommend that the Board of Governors take, with respect to FY23 net income. The Executive Directors have concluded that the interests of the IBRD and its members would be best served by the following dispositions of the FY23 net income of the IBRD: (a) the addition of $921 million to the General Reserve, plus or minus any rounding amount less than $1 million, and (b) the transfer to the International Development Association, by way of a grant of $291 million, which amount would be usable to provide financing in the form of grants and addition to loans, and (c) the allocation of $100 million to Surplus. 4. Accordingly, the Executive Directors recommend that the Board of Governors note with approval the present report and adopt the draft resolution attached as Attachment A. - 10 -  IBRD Document No. 2 Attachment A INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT BOARD OF GOVERNORS (DRAFT) Resolution No. ___ Allocation of FY23 Net Income RESOLVED: 1. THAT the Report of the Executive Directors dated August 3, 2023 on “Allocation of FY23 Net Income” is hereby noted with approval; 2. THAT the addition to the General Reserve of the IBRD of $921 million, plus or minus any rounding amount less than $1 million, is hereby noted with approval; and 3. THAT the IBRD transfers to the International Development Association, by way of a grant out of the FY23 net income of the IBRD, $291 million, which amount may be used by the Association to provide financing in the form of grants in addition to loans; such transfer is to be drawn down by the Association immediately upon approval by the Board of Governors of the IBRD, and 4. That the IBRD allocates $100 million to surplus. - 11 -  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO IBRD/IDA Document No. 1 September 20, 2023 REPORT ON IBRD and IDA’s BUDGET FOR FY24 This report has been prepared for the information of the Board of Governors at their forthcoming 2023 Annual Meetings. It is organized in three sections: I. Preface; II. FY23 IBRD and IDA Budget Outturn; and III. FY24 IBRD and IDA Budget Plan. 1 I. Preface 1. After decades of progress, growth and poverty reduction have stalled and development gains have been eroded. IBRD and IDA have been responding at a record pace and scale to address the growing poverty crisis, economic distress and global challenges. The unprecedented confluence of crises of COVID-19, rising levels of conflict and forced displacement, an intensifying climate crisis, natural disasters and a protracted global downturn, have pushed millions of people into extreme poverty and reversed decades of progress. In response, over the past three years, IBRD and IDA have provided record crisis financing, which reached US$269 billion in FY20-23. In FY23, IBRD and IDA combined lending reached record highs of US$72.8 billion and disbursements soared to US$53.2 billion. FY23 commitments overall were 73 percent higher than the pre-crisis (FY13-19) average of around US$42 billion. IBRD commitments were US$38.6 billion (compared to US$33.1 billion in FY22). IDA commitments reached US$34.2 billion (compared to US$37.7 billion a year ago). IBRD gross disbursements were US$25.5 billion (compared to US$28.2 billion in FY22). IDA gross disbursements were US$27.7 billion (compared to US$21.2 billion a year ago). IBRD and IDA also broadened and deepened partnerships around financing, advocacy, knowledge, innovation and capacity building with 1 As legally distinct entities, IBRD, ICSID, IDA, IFC and MIGA follow different business models and financial reporting frameworks, with separate Budget Documents reviewed and approved by the Boards of Directors. This report focuses on IBRD and IDA alone, for which the budget outturn for FY23 as well as budgeted amounts in FY24 are presented. In referring to spending, the document uses “BB” or net administrative expenditure when referring to spending against the Board approved budget; references to external funds include disbursements of donor contributions from Bank Executed Disbursing Activities (BEDA), revenues from Reimbursable Advisory Services, and service level payments from IFC, MIGA and other partners; and “All Funds” refers to the sum of BB and external funds. - 12 -  IBRD/IDA Document No. 1 global, regional and national partners and developed a range of rapid, flexible financing instruments and facilities. In FY23, IBRD and IDA also completed 1,091 Advisory Services and Analytics (ASA) activities. This unprecedented program was only possible through the dedication of its staff and by stretching its available financial, budgetary and human resources to the maximum, with tight budget discipline. See also the summary table on operational delivery in Annex B. 2. The urgent need to address these development challenges calls for further scale-up in financing and impact if we are to reverse negative trends for people and the planet and improve the life prospect particularly for women and young people. Addressing these mounting development challenges requires a combination of technical and policy expertise, knowledge and research of all stakeholders at the country, regional and global levels. This will require strong efforts by all parts of the development community: the public and private sectors and other development partners. Management is working with shareholders on its next evolution phase to respond to the growing poverty crisis, economic distress and global challenges. Building on IBRD and IDA’s experience in implementing the Global Crisis Response Framework, the FY24 work program will build on the World Bank Twin Goals, the IBRD Capital Package and the IDA20 policy and finance package and be informed by the World Bank’s new vision and mission playbook, the Bank is taking steps to enhance operational efficiency and effectiveness to achieve greater development impact. This will be accomplished by ensuring operational approaches, instruments, and tools are capable of delivering development solutions with speed and impact. These include strengthening country capacity, transitioning from retail to wholesale by providing clients with scalable and programmatic approaches, adopting a risk-based approach to project preparation, approval, and implementation, promoting a culture of partnership and trust, and prioritizing the welfare and productivity of staff. IBRD and IDA will decisively scale up and optimize to help countries achieve their Sustainable Development Goals (SDGs), building on core country engagement; country, regional and global knowledge; strengthening the One-World Bank approach; leveraging partnerships and intensifying outcome orientation. 3. The Evolution Roadmap process is refocusing and energizing the IBRD and IDA efforts on both crisis response and long-term development. A Development Committee paper 1 for the 2023 Spring Meetings outlined proposals to enhance the World Bank’s Vision and Mission, strengthen its Operating Model, and adapt its Financial Model and Capacity to meet the needs and priorities of its clients and shareholders was welcomed by the Governors. Management have been developing these proposals further over the summer in advance of the Annual Meetings in October 2023. As discussions continue with shareholders on the future of the World Bank, the focus in FY24 will be on both crisis response and long-term development with IBRD and IDA continuing to lean forward to help countries regain momentum to achieve a sustainable, resilient and inclusive development, and address unprecedented development and global challenges. 1 See “Evolution of the World Bank Group - A Report to Governors”, DC2023-0002, March 30, 2023. -13-  IBRD/IDA Document No. 1 4. IBRD and IDA have taken significant steps to increase their lending capacity, a major boost in firepower that will give millions of people a chance to escape poverty and improve their lives. IBRD and IDA have optimized their Balance Sheets while preserving their AAA credit rating. Balance Sheet Optimization (BSO) measures endorsed at the Spring Meetings have already created up to US$50 billion of additional lending volumes for IBRD over the next 10 years. These measures include: (a) lowering the policy minimum E/L ratio to 19%, (b) increasing the limit on shareholder bilateral guarantees by US$5 billion, (c) preparing for a pilot for issuing up to US$1 billion of hybrid capital in the capital markets, and (d) Board approval for pursuing removal of the Statutory Lending Limit (SLL) from IBRD Articles. Additional steps which have the potential to significantly increase IBRD’s lending capacity are being proposed, with implementation contingent on the interest of shareholder and development partners. The Board of Governors approved the IDA Crisis Facility which aims to use IDA’s balance sheet to leverage new donor resources for additional support to IDA countries’ crisis response and for support of Ukraine and Moldova. In addition, the World Bank established a new Private Sector Investment Lab in June 2023, which will generate, test, and scale impactful ideas that remove barriers to private sector investment in emerging markets. IBRD and IDA also introduced an enhanced crisis response toolkit to help countries respond quickly and effectively to natural disasters and jumpstart a new approach to tracking climate outcomes more effectively to better measure impact. 5. In parallel, IBRD and IDA continue implementing efficiency gains and are on track to deliver the FY18-30 Capital Package budget commitments as early as FY26. Despite facing multiple global crises, IBRD and IDA delivered net efficiencies and economies of scale savings totaling US$689 million and on target to reach the US$1.1 billion by FY26, well ahead of the FY30 timeline; and it has also met its IBRD Budget Anchor targets. Delivering on the financing, operational, knowledge and partnership proposals in the Development Committee paper will require IBRD and IDA to transition the efficiency savings and budget anchor achievements towards new commitments consistent with the new vision and mission of the World Bank. II. FY23 IBRD and IDA Budget Outturn 6. Total gross expenditures for FY23 were US$4,784 million. This represents an increase of US$413 million (+9.5 percent) compared to US$4,370 million in FY22. The increase in expenditures was due to higher staff costs and inflationary cost pressures caused by increased operational activities to ramp up supervision and cater to the growth in the loan portfolio. This led to a significant increase in travel and the use of contingent workforce. Gross expenditures were funded from a combination of administrative budget funds, Bank Executed Disbursing Accounts (BEDAs), and Reimbursables (see Table II.1 below). 7. Total net administrative expenditures for FY23 (BB only) were US$2,935 million. This is an increase of US$215 million (+7.9 percent) compared to US$2,720 million in FY22. FY23 spending represents a 3.3 percent or US$99.6 million underrun compared to the Board-approved administrative budget envelope of US$3,035 million. This underrun compares with underruns of 4.6 percent in FY22 -14-  IBRD/IDA Document No. 1 and 8.0 percent in FY21. The final underrun was higher than expected due to a reduction in staff benefit liabilities, lower spending on Global Footprint, savings in staff separations account, and higher external fund revenues than expected. The FY23 budget outcome reflects IBRD and IDA’s continued budget discipline and efficiency efforts as resources were efficiently and effectively deployed to respond to multiple and compounding crises, support strategic priorities of the work program and deliver record new commitments. Table II.1: FY22-23 IBRD and IDA Expenditure by Source (US$ million) FY22 FY23 Change Change Actual Actual in % Net Administrative Expenditure (BB) 2,720 2,935 215 7.9% Bank Executed Disbursing Activities (BEDA) 1,109 1,255 146 13.2% Reimbursables and Other Fee Income 541 593 52 9.7% Gross Expenditure 4,370 4,784 414 9.5% 8. At the end of FY23, IBRD and IDA had 13,125 active Open/Term staff. This represents a 2.7 percent increase from FY22-end (+343 staff). This growth has been in response to institutional priorities, in alignment with the staffing plans and budget affordability. Staffing growth has continued to be predominantly in locations outside the United States (US), in line with the sustained efforts on Global Footprint. In line with management efforts to rebalance the grade mix, the growth in the 12 months ending in FY23Q4 was predominantly at GE-GG grades (4.0 percent), and the number of GH+ staff increased by 1.1 percent. The number of GA-GD staff declined by 0.2 percent. By the end of FY23Q4, 47.3 percent (6,213) of IBRD and IDA Open/Term staff were based outside of the US, up from 46.1 percent (5,898) at end-FY22Q4 (representing an increase of 5.3 percent over this period). The People and Culture (PaC) VPU is also supporting the Global Footprint efforts through targeted recruitment drives, outreach, and branding, working with clients and partners. In addition, efforts are made to alert management teams of staff currently posted in FCS participating in rotation exercises and facilitate their next assignments, including outside of FCV locations. PaC is also building targeted learning curriculums, onboarding, and coaching programs to support FCS staff career development, effectiveness and progression. In the 12 months ending in FY23Q4, IBRD and IDA paid STC/STTs for a total of 5,986 FTEs, reflecting a 2.9 percent decrease compared to FY22Q4, with an increase among CO- appointed STC/STT FTEs and decrease among HQ-appointed STC/STT FTEs. The number of ETC/ETTs on board at IBRD and IDA as of FY23Q4 was 1,087, compared to 1,045 in FY22Q4. III. FY24 IBRD and IDA Budget Plan A. Administrative Budget 9. On June 27, 2023, the Board approved management’s proposal for a FY24 administrative budget of US$3,170 million, which is to be managed within a range of +/-2 percent. The FY24-26 planning and budgeting process took place in the context of continued uncertainty and volatility in the world. Management has been working with the World Bank Executive Directors (EDs), in developing a new vision and mission, creating a new World Bank playbook with solutions to support clients in tackling development challenges at country, regional and global levels and a new scorecard to monitor results aligned with the new mission. Although these discussions have important implications on IBRD and -15-  IBRD/IDA Document No. 1 IDA’s work program and budget, many of the operational and financial discussions were yet to be concluded at the time the budget was approved. Management will engage with World Bank EDs on the budget needs and process changes required before the Spring Meetings of 2024. In this context, the Board and Management agreed to treat FY24 as a transition year and present a pre-Evolution Roadmap trajectory that excludes any budgetary implications of decisions that will be made by the Governors in October 2023. Accordingly, the same budget trajectory for FY24 and FY25 as had been outlined in the FY23 Budget Document presented to the Board in June 2022 was proposed, resulting in the Board approving a 1 percent real increase for FY24 (see Table II.2). Table II.2: FY23 and FY24 World Bank Budgets (US$ million) FY23 FY24 Approved FY24 Budget (Nominal) 3,035 3,170 % Change YOY (Nominal) 4.4% Approved FY24 Budget (in FY23$) 1 3,035 3,066 % Change YOY (Real in FY23$) 1.0% 1 Defl a tor us ed i s 3.4%, for FY24. Source: US CPI per Apri l , 2023, IMF Worl d Economi c Outl ook (WEO) report. 10. Significant objectives in budgetary plans include: • Strengthening the alignment of resources with strategic priorities: The planning and resource allocation for FY24 has been guided by four strategic priorities: (i) preparing and supervising a large and increasingly more complex IDA-IBRD project portfolio with rising costs of doing business in low and lower middle-income countries, Fragility, Conflict and Violence (FCV) affected countries, and other low-capacity settings; (ii) advancing country, regional and global knowledge and analytics as well as implementing operational commitments for enhanced impact, informed by updated core and extended core Advisory Services and Analytics (ASAs); (iii) increasing in-country presence to enhance IBRD and IDA capacity to support clients, particularly in IDA and FCV locations; and (iv) strengthening institutional support for delivery including improving the World Bank culture to maximize its effectiveness and development impact. Given the evolving situation worldwide and the social and economic impact of growing international fragility, IBRD and IDA’s programs will need to be dynamic in responding to emerging needs and budgetary resources will need to be flexible in addressing possible new cost pressures, including outcomes from the Evolution Roadmap discussions. • Discussing the budget needs and process changes with the Board, building on the experience and results of implementing the IBRD FY18 capital increase package budget commitments in the first five years of implementation (FY19-23): As agreed in the 2018 IBRD capital package, IBRD is committed to cumulative savings from efficiencies and economies of scale measures by 2030, over and above savings achieved under the Expenditure Review. Significant progress has already been made towards achieving the capital package budget commitments, and Management is seeking spending discipline throughout the year, while balancing needs across the organization as key part of the expanded operational delivery. The budget trajectories presented in the FY19 through FY23 Budget Documents, and the proposed FY24-26 budget trajectory, include gross efficiency measures, economies of scale and cost recoveries of US$364 million in FY24, rising to US$379 million in FY26. These savings are in addition to the Expenditure Review savings already embedded in the FY18 Budget Document. Gross efficiency savings amount to US$1,581 million in FY19-26, of which -16-  IBRD/IDA Document No. 1 US$781 million are net savings (net of incremental additions to fund cost pressures not associated with either volume increases or changes which have a large budget impact that were not anticipated at the time of the IBRD capital package agreement). Economies of scale savings amount to US$427 million in FY19-26. Realized and projected savings embedded in the FY19-26 budget trajectories amount to US$1,208 million of net efficiency and economies of scale savings reaching the commitment toward the Capital Package budget commitments of US$1.1 billion of net savings ahead of the FY30 target (see Table III.1). The continuous drive for efficiency and productivity improvements, including among others through optimization of organizational processes and effective use of technology, will help contain and, to some extent, offset part of the increased cost of doing business resulting from higher levels of lending, a larger portfolio size and operating in a riskier and more complex environment. Table III.1: Progress on Efficiencies and Economies of Scale Savings (US$ million) FY19 FY20 FY21 FY22 FY23 FY19- FY24 FY25 FY26 FY19-26 act. act. act. act. act. 23 act. plan plan plan Gross Efficiency Savings 41 106 163 218 250 778 263 268 273 2,359 Net Efficiency Savings 12 28 77 140 149 406 127 123 126 1,187 Economies of Scale Savings - 38 60 76 109 283 47 48 49 710 Net Efficiency and 12 66 137 215 258 689 174 171 174 1,897 Economies of Scale Savings Gross Efficiency and 41 144 223 294 360 1,061 310 316 322 3,069 Economies of Scale Savings Internal and External Cost 8 16 23 36 47 130 55 56 57 427 Recoveries The numbers have been rounded to the nearest whole number. Numbers may not add due to rounding. • Strengthening IBRD and IDA’s financial position: The FY24 budget will maintain budget sustainability and contribute to IBRD and IDA’s financial strengthening. As part of the capital package, IBRD budget anchor targets (i.e., the ratio of IBRD expenses over IBRD loan spread income) have been agreed with shareholders. The IBRD anchors are specified in the form of target zones identified for 3-year intervals from FY19 to FY30. Under the FY24 budget, the IBRD anchor is projected to be 72 percent (see Figure III.1), well within the agreed target range. IDA’s budget anchor (i.e., the ratio of IDA expenses over IDA net revenue) is estimated to be 69 percent in FY24 (see Figure III.2). • Reducing reliance on External Funds: To enhance strategic alignment and sustainable funding and to reduce fragmentation, Management has thus far, worked towards reducing IBRD and IDA’s reliance on External Funds, especially for critical activities, by allocating to each VPU a dollar envelope for their usage and reducing IBRD and IDA’s share of administrative expenses funded by them over time. Consequently, under the current trajectory, the growth of External Funds is expected to decline, with the share of total costs covered by External Funds tempering downwards from 39 percent in FY20 to 34 percent by FY26. -17-  IBRD/IDA Document No. 1 Figure III.1: IBRD Budget Anchor Figure III.2: IDA Budget Anchor 11. The FY24 budget and distribution reflect the alignment of resources with the strategic directions. Based on the budget approved in June 2023, IBRD and IDA's budget trajectory and distribution for FY24-26 reflect Management's commitment to scale up IBRD and IDA’s response to help countries address both the pressing needs arising from the compounding crises while also restoring progress on long-term development. Most of the incremental funding within operations will prioritize increased lending levels in FY24 and portfolio growth, with a focus on funding poorer and smaller countries and those affected by fragility, violence, and conflict, as well as higher-cost sectors with growing lending and portfolio volumes. Management has also identified a few key demands on non-operational units for -18-  IBRD/IDA Document No. 1 incremental funding to strengthen institutional support for delivery. As a result, IBRD and IDA budget allocation for operational units will increase by US$60 million, or 3.2 percent, in FY24 compared to FY23; over the two years from FY22, this represents a 9.7 percent or US$172 million increase. The share of the administrative budget allocated to operations will remain stable at around 61.1 percent. This follows a significant realignment of resources that Management has made to support operations since FY16, when the share of budget resources to operations was 54.0 percent. The budget for Client Engagement within operational units will increase by 3.7 percent (a US$40 million increase) in FY24 over FY23; over the two years from FY22, this represents a 10.1 percent or US$106 million increase. This increase aims to support the lending volume and portfolio growth, advance knowledge, integrate corporate policy commitments into operational products, and operationalize key initiatives. All regions will experience an increase in their regional Country Engagement (CE) budget trajectories from FY23, with an aggregate increase of US$35 million. Furthermore, the Global Engagement (GE) budget will increase by US$5 million or 5.4 percent from FY23 to FY24 or 21.1 percent over the two years from FY22. IBRD and IDA budget resources for Program and Practice Management (PPM), which fund the management and overhead costs of running the operational work program including the support for global footprint changes, will increase by 2.5 percent in FY24 over FY23. Table III.2: FY23-24 Budget by Work Program and Funding Source (US$ million) BANK BUDGET ALL FUNDS INDICATIVE BUDGET TRAJECTORIES FY23 FY24 FY23 FY246 TOTAL OPERATIONAL UNITS 1,886 1,946 3,107 3,199 Client Engagement 1,115 1,155 2,135 2,205 Country Engagement 1,005 1,040 1,832 1,877 Global Engagement1 110 115.5 302 329 Program & Practice Management1 772 791 972 994 Grant Making Facilities 35 35 35 35 TOTAL OPERATIONS 1,921 1,981.3 3,142 3,234 IG&A PROGRAMS 1,214 1,272.9 1,571 1,650 Institutional Services1 486 512 668 700 Governance Services 225 234 246 259 Administrative Services 503 527 657 691 TOTAL: ALL UNITS 3,135 3,254 4,714 4,885 TOTAL: ALL UNITS (excl. GMFs) 3,100 3,219 4,679 4,850 CENTRALLY MANAGED ACCOUNTS 92 106 92 106 o/w Corporate Contingency 10 10 10 10 TOTAL TRAJECTORY 3,227 3,360 4,806 4,991 o/w Funded by External Funds (192) (190) (1,771) (1,821) Net Trajectory Funded by IBRD/IDA 3,035 3,170 3,035 3,170 1 FY23 GE and PPM budgets restated with a corresponding increase in Institutional Services for the remap of Prospects Group from EFI to DEC effective March, 2023. -19-  IBRD/IDA Document No. 1 Table III.3: FY23-24 Budget Share by Work Program and Funding Source BANK BUDGET ALL FUNDS INDICATIVE BUDGET TRAJECTORIES FY23 FY24 FY23 FY24 Client Engagement1 36.3% 36.5% 45.8% 45.9% Country Engagement 32.4% 32.3% 39.2% 38.7% Global Engagement 3.5% 3.6% 6.5% 6.8% Program & Practice Management 24.9% 24.6% 20.8% 20.5% TOTAL OPERATIONAL UNITS 61.2% 61.1% 66.6% 66.4% Institutional Services 15.4% 15.3% 14.1% 14.0% Governance Services 7.2% 7.3% 5.3% 5.3% Administrative Services 16.2% 16.4% 14.0% 14.3% TOTAL IG&A UNITS 38.8% 38.9% 33.4% 33.6% TOTAL: ALL UNITS (excl. GMFs) 100.0% 100.0% 100.0% 100.0% 1 Operational share of Unit budgets includes (a) funding for B-READY in FY23-FY24, and (b) excludes funding for Prospects Group which was remapped from EFI to DEC (FY23 also restated for comparison) 12. Institutional, Governance and Administrative Units (IG&A) have been able to fund a growing work program through significant efficiency efforts, productivity improvements and cost avoidance. The IG&A units support IBRD and IDA’s growing and increasingly complex business and its efficient and effective operational delivery. They have helped increase and manage IBRD and IDA’s larger financial capacity, improve risk management in an increasingly complex environment, provide productive and safe working environments for staff and enhance technological agility enabling a technically seamless transition to working from home throughout the pandemic. The overall allocation to Institutional, Governance and Administrative (IG&A) units will increase from a restated US$1,214 million in FY23 to US$1,273 million in FY24. Incremental funding for some IG&A units to strengthen institutional support for delivery in critical areas has been factored into their trajectories. These include initiatives such as Workplace Culture, Mental Health and Disability; higher IT license fees and the growing demand for software applications; resource needs for legal services in operations; HQ real estate strategy; Oversight Units (Accountability Mechanism and Independent Evaluation Group); corporate sustainability supporting the implementation of capital investments to meet the World Bank’s Global Emission Goal target; and funding of a secretariat of the Emergency Management Team (EMT). It is worth noting that several IG&A initiatives had received incremental funding from the FY23 Budget Document trajectory which also carries over to FY24, including for DEC’s roll-out of the new B- READY measurement approach, risk management, strengthening security and CO health services, facilities management and for implementing the Anti-Racism Task Force Recommendations. At the same time, IG&A units will achieve savings and redeployments from productivity improvements, economies of scale and efficiencies in meetings/events and printing. The Centrally Managed Accounts reflect an increase of 15 percent (US$14 million net budget basis) compared to FY23 principally due to increases in depreciation/IT cloud subscriptions and reductions in budgeted EF indirect recoveries. 13. Within the Governance Services budget envelope, the FY24 World Bank budget for the Executive Directors is US$91.7 million while that for institutional oversight units (IBRD and IDA’s share of the 5Is) is US$77.4 million (see Annex A, Table A.1 (Continued) 2/3 for more details). The Executive Directors units report directly to the Board and their funding is submitted to COGAM for endorsement. -20-  IBRD/IDA Document No. 1 Although IBRD and IDA’s share of this budget is authorized with the Budget Document and includedin the total administrative budget approval, the sizing of this budget is not determined by Management. In addition to its own budget, the Board makes use of the services of the Corporate Secretariat VPU, including its Annual and Spring Meetings support and shareholder relations, and draws on staff time across IBRD and IDA to better inform its deliberations. The FY24 budget for the Institutional Oversight Units (known colloquially as the 5Is) is set at US$77.4 million for IBRD and IDA. These units play an assurance role to shareholders and Management that IBRD and IDA’s work is impactful, informed by best practices, cost-effective and delivered to the highest ethical standards. Accordingly, despite a constrained budgetary environment for IBRD and IDA overall, and IG&A units in particular, the aggregate funding increase for IBRD and IDA’s share of the 5Is for FY24 is 20 percent over FY21, which compares with a nominal increase for IBRD and IDA’s overall budget of 13.7 percent. 14. Funding for the Grant-Making Facilities will remain unchanged compared to recent years (see Table III.2). Consistent with Executive Directors’ input in past years, funding for the State and Peacebuilding Fund and the Consultative Group for International Agricultural Research (CGIAR) will remain at US$5 million and US$30 million, respectively. Despite many efforts over the past years, no additional external funding for the CGIAR has been forthcoming to replace IBRD and IDA funding. B. Capital Budget 15. The Capital Budget for FY24 is US$216 million. Planned capital investments aim to facilitate the delivery of IBRD and IDA’s work program through investments in modern and secure facilities across the globe as well as Information Technology (IT) infrastructure that helps staff with a platform and tools to perform their work effectively and efficiently. Capital investment planning is integral to IBRD and IDA’s strategic planning and budgeting cycle. The capital budget for FY24 is US$216 million, of which US$105 million is for Facilities investments and US$111 million for IT investments (see Table III.4). However, this level of capital spending is not sustainable in the long term if IBRD and IDA are to (i) keep pace with digital transformation trends, (ii) adapt the infrastructure to meet the needs of the post- COVID-19 working model, (iii) respond to the needs of the Global Footprint agenda, (iv) respond to the deteriorating physical and cyber security environment, (v) accelerating initiatives to reduce WBG carbon emissions, and (vi) adjust for inflation impacts that have not been reflected in capital budgets for several years. In addition, there may also be capital budget implications associated with some of the decisions arising from the Evolution Roadmap discussions, which would also need to be reflected in future trajectories. -21-  IBRD/IDA Document No. 1 Table III.4: Facilities and Technology and Systems Investment Plan (US$ million) FY23 FY24 Investment Plan 220 216 Facilities 105 105 HQ Facilities 50 50 CO Facilities 45 44 Security 1 10 11 Technology and Systems (IT) 115 111 Regular Annual Investment Plan2 85 85 ERP/Project Aria 30 26 Notes: 1 Security includes HQ and CO investments. 2 The Bank will maintain spending authority in capital budget and capital equivalent funds earmarked for financing cloud investments. -22-  IBRD/IDA Document No. 1 Annex A: IBRD and IDA Program Cost Summary Table A.1: FY23-24 Budget by Work Program, Unit and Funding Source (US$ million) INDICATIVE BUDGET TRAJECTORIES BB External Funds All Funds FY23 FY24 FY23 FY24 FY23 FY24 1 Country Engagement 1.1 AFEVP 193.7 199.65 152.2 146.5 345.9 346.1 1.2 AFWVP 194.2 196.7 79.3 75.5 273.5 272.2 1.3 EAPVP 131.4 132.4 135.7 130.3 267.1 262.7 1.4 ECAVP 109.0 114.0 112.6 128.9 221.6 242.9 1.5 LCRVP 121.2 126.5 66.4 62.9 187.6 189.3 1.6 MNAVP 81.0 83.0 99.1 97.8 180.1 180.8 1.7 SARVP 164.4 165.9 92.5 90.3 256.9 256.2 1.8 Other Operational Support1 10.3 21.9 89.5 104.8 99.8 126.7 Sub-Total 1,005.1 1,040.0 827.4 836.9 1,832.4 1,876.9 2 Global Engagement 2.1 Practice Group GE 2 109.5 115.5 193.0 213.0 302.5 328.5 Sub-Total 109.5 115.5 193.0 213.0 302.5 328.5 A TOTAL CLIENT ENGAGEMENT 1,114.6 1,155.5 1,020.3 1,049.9 2,134.9 2,205.4 3 Region PPM 3.1 AFEVP 93.7 95.4 11.8 12.1 105.6 107.6 3.2 AFWVP 82.9 84.3 2.6 2.8 85.4 87.1 3.3 EAPVP 83.4 84.9 9.9 10.2 93.3 95.1 3.4 ECAVP 71.7 76.2 4.6 3.2 76.3 79.4 3.5 LCRVP 71.4 72.7 2.6 2.7 74.0 75.4 3.6 MNAVP 50.9 51.9 9.3 6.6 60.3 58.4 3.7 SARVP 76.4 77.8 2.8 2.9 79.3 80.7 Sub-Total 530.5 543.3 43.6 40.5 574.1 583.7 4 Practice Group PPM 4.1 Equitable Growth, Finance and Institutions2 33.3 34.6 16.1 17.9 49.4 52.5 4.2 Human Development 16.3 16.6 13.1 12.2 29.4 28.8 4.3 Infrastructure 19.2 19.6 14.8 14.0 34.0 33.6 4.4 Sustainable Development 27.6 28.1 64.9 71.2 92.5 99.3 Sub-Total 96.4 98.9 108.9 115.3 205.3 214.2 5 Other Operational Support PPM 5.1 Other Operational Support3 144.8 148.6 48.1 47.5 192.9 196.1 Sub-Total 144.8 148.6 48.1 47.5 192.9 196.1 B TOTAL PROGRAM & PRACTICE MGMT. 771.7 790.8 200.6 203.2 972.3 994.0 C TOTAL OPERATIONAL UNITS 1,886.3 1,946.3 1,221.0 1,253.1 3,107.2 3,199.4 6 Operational Grant Making Facilities 6.1 CGIAR 30.0 30.0 - - 30.0 30.0 6.2 State and Peace Building Fund 5.0 5.0 - - 5.0 5.0 Sub-Total 35.0 35.0 - - 35.0 35.0 D TOTAL OPERATIONS 1,921.3 1,981.3 1,221.0 1,253.1 3,142.2 3,234.4 -23-  IBRD/IDA Document No. 1 Table A.1 (Continued) / 2 of 3 INDICATIVE BUDGET TRAJECTORIES BB External Funds All Funds FY23 FY24 FY23 FY24 FY23 FY24 7 Institutional Services 7.1 Budget, Performance & Strategy 83.2 85.4 0.1 0.4 83.4 85.8 7.2 Chief Risk Office 4 24.3 25.5 1.0 2.0 25.3 27.5 Chief Risk Office 22.0 23.1 1.0 2.0 23.0 25.1 CMP - Data Privacy Office 2.3 2.4 - - 2.3 2.4 7.3 Development Economics2 71.2 82.3 55.6 53.4 126.8 135.7 7.4 Development Finance 29.1 30.2 7.7 8.9 36.8 39.0 7.5 External & Corporate Relations 86.0 87.0 5.6 6.6 91.6 93.6 7.6 Global Environment Fund - - 36.0 36.0 36.0 36.0 7.7 Legal Services 43.6 47.7 2.4 3.9 45.9 51.6 7.8 Operational Policy & Country Services 51.0 52.2 - 0.1 51.0 52.3 7.9 Strategy, Performance, and Admin. 11.9 12.3 3.6 4.4 15.5 16.7 7.10 Treasury 35.9 37.2 62.0 64.0 97.8 101.2 7.11 WBG Finance & Accounting 50.0 51.8 8.3 8.5 58.3 60.4 Sub-Total 486.1 511.6 182.2 188.2 668.4 699.8 8 Governance Services 8.1 Executive Directors 89.3 91.7 - - 89.3 91.7 5 8.2 Accountability Mechanism 8.0 8.5 - - 8.0 8.5 Inspection Panel 4.2 4.3 - - 4.2 4.3 Accountability Mechanism Sec./Dispute Resolution 3.7 4.2 - - 3.7 4.2 8.3 Independent Evaluation Group 30.5 31.8 9.9 11.3 40.4 43.1 8.4 Corporate Secretariat 22.4 23.0 1.1 1.7 23.5 24.7 8.5 Administrative Tribunal 2.1 2.1 0.5 0.5 2.6 2.6 8.6 Ethics and Internal Justice Services6 12.3 14.4 4.0 5.0 16.2 19.4 8.8 Integrity Vice Presidency 24.0 24.7 0.2 0.6 24.2 25.3 8.9 Office of Suspension & Debarment 2.0 2.0 - - 2.0 2.0 8.10 Sanctions Board 2.1 2.1 - - 2.1 2.1 8.11 Group Internal Audit7 11.1 11.4 3.5 3.7 14.6 15.1 8.12 Office of the MD and CAO 3.0 3.1 - - 3.0 3.1 8.13 Office of the MD and CFO 3.0 3.1 - - 3.0 3.1 8.14 Office of the SMD, Development Policy and Ptshps. 4.0 5.6 2.4 2.1 6.3 7.7 8.15 Office of the MD, Operations 5.8 5.1 - - 5.8 5.1 8.16 Office of the President 5.4 5.6 - - 5.4 5.6 Sub-Total 224.7 234.2 21.6 24.9 246.4 259.1 9 Administrative Services 9.1 Global Corporate Solutions 162.7 165.4 39.6 42.6 202.2 208.0 9.2 Health and Safety Directorate 9.7 12.0 3.8 4.0 13.6 16.1 9.3 People and Culture 64.2 71.7 33.4 35.5 97.5 107.2 9.4 Information & Technology Solutions 266.4 278.0 76.9 82.1 343.3 360.1 Sub-Total 503.0 527.2 153.7 164.2 656.6 691.4 E TOTAL INSTITUTIONAL, GOVERNANCE & ADMIN. 1,213.9 1,272.9 357.5 377.4 1,571.4 1,650.3 F TOTAL: ALL UNITS (Excl. GMFs) 3,100.1 3,219.2 1,578.5 1,630.5 4,678.6 4,849.7 -24-  IBRD/IDA Document No. 1 Table A.1 (Continued) / 3 of 3 INDICATIVE BUDGET TRAJECTORIES BB External Funds All Funds FY23 FY24 FY23 FY24 FY23 FY24 10 Centrally Managed Accounts & Programs 10.1 Budget Recovery8 (1,187.4) (1,246.5) - - (1,187.4) (1,246.5) 10.2 Corporate Contingency 10.0 10.0 - - 10.0 10.0 10.3 Corporate Depreciation and Real Estate 9 156.8 166.2 - - 156.8 166.2 10.4 Institutional Programs9 34.2 36.1 0.5 0.5 34.8 36.6 10.5 Staff Benefits & Retirement 1,078.3 1,140.1 - - 1,078.3 1,140.1 Sub-Total 91.9 105.8 0.5 0.5 92.4 106.3 G TOTAL ALL FUNDS EXPENDITURE ENVELOPE 3,227.0 3,360.0 1,579.0 1,631.0 4,806.0 4,991.0 H o/w Funded by External Funds DRR (192.0) (190.0) - - (192.0) (190.0) I o/w Funded by External Funds CRR - - (402.3) (398.9) (402.3) (398.9) J o/w Funded by External Funds BETF - - (1,176.7) (1,232.1) (1,176.7) (1,232.1) K o/w Admin Budget Funded by IBRD/IDA 3,035.0 3,170.0 - - 3,035.0 3,170.0 1 CE BB funds include Young Professional (YP) Subsidy set-aside which will be distributed to the Regions based on YP placements. Any additional balance will be held for further distribution across the Regions, and other corporate priorities being programmed. All funds include EF allocation distributed to FCV and to Global Units. 2 FY23 GE and PPM budgets restated with a corresponding increase in Institutional Services for the remap of Prospects Group from EFI to DEC effective March, 2023. 3 Includes the FCV unit, funds for the Environmental and Social Standards unit in OPCS including the areas of GBV and ESF implementation as corporate priorities, and Global Mobility benefits for Operational staff. External funds includes the Global Partnership for Education (GPE) Secretariat 4 Chief Risk Office restated for FY23 to include Data Privacy Office 5 Comprises the Accountability Mechanism Secretariat, the Inspection Panel and the Dispute Resolution Service. 6 Ethics & Internal Justice Services created as a new VPU in FY24 and includes, Internal Justice Services and Office of Ethics and Business Conduct units. FY23 restated to reflect this new structure. 7 Incorporating feedback from Board members, Management has decided to provide additional base funding of US$0.9 million for GIA’s Ukraine Oversight Program which will be funded by a pro-rata reduction of all non-oversight units’ budgets, so as to keep the Corporate Contingency intact. With this US$0.9 million allocation, GIA’s budget be US$12.3 million in FY24 and will increase by US$1.2 million (11 percent nominal/8 percent real) over FY23 and by 37 percent nominal (23 percent real) over FY21. 8 Includes staff benefits recoveries from internal transfer pricing, TF recoveries, and Corporate Services. 9 FY23 restated for the remap of HQ Real Estate costs from Institutional Programs to Depreciation & HQ Real Estate -25-  IBRD/IDA Document No. 1 Annex B: IBRD and IDA Operational Deliverables Table B.1: Operational Deliverables (FY19-23) FY20 FY21 FY22 FY23 Actual Actual Actual Actual Advisory Services and Analytics (#) 1,515 1,357 1,130 1,091 IBRD Net Commitments (US$ billion) 28.5 30.5 33.1 38.6 1 IDA Net Commitments (US$ billion) 30.4 36.1 37.7 34.2 IBRD/IDA Net Commitments (US$ billion) 2 58.9 66.6 70.8 72.8 of which: Development Policy Operations (DPO) 17.8 17.8 16.6 20.5 Investment Project Financing (IPF) 36.9 39.3 43.9 38.7 Program for Results (PforR) 4.2 9.5 10.3 13.6 IBRD Gross Disbursement (US$ billion) 20.2 23.7 28.2 25.5 IDA Gross Disbursement (US$ billion) 21.2 22.9 21.2 27.7 IBRD/IDA Gross Disbursement (US$ billion) 41.4 46.6 49.4 53.2 Note: Numbers ma y not a dd up to tota l s due to roundi ng. 1 Excl udes IDA IFC-MIGA Pri va te Sector Wi ndow (PSW) a cti vi ti es 2 Amounts a re net of ful l termi na ti ons a nd ca ncel l a ti ons a pproved i n the s a me fi s ca l yea r. Incl udes gua ra ntees . -26-  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO IBRD/IFC/IDA Document No. 1 SELECTION OF THE CHAIR AND VICE-CHAIRS OF THE BOARDS OF GOVERNORS AND SELECTION OF THE MEMBERS OF THE JOINT PROCEDURES COMMITTEE AND ITS OFFICERS FOR 2023-2024 Document will be distributed by email to Governors by October 12, 2023 -27-  IFC DOCUMENTS -28-  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO The 2023 IFC Annual Report will be available on this link and on the Corporation’s website on October 4, 2023, https://www.ifc.org/AnnualReport -29-  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO IFC Document No. 1 September 20, 2023 REPORT TO THE BOARD OF GOVERNORS ON IFC FY23 OPERATIONAL & FINANCIAL RESULTS AND IFC FY24 BUDGET This report has been prepared to present the International Finance Corporation’s (IFC) Fiscal Year 2023 operational and financial results and IFC’s Fiscal Year 2024 budget for the information of the Board of Governors at their forthcoming 2023 Annual Meetings. Strategic Context 1. Progress on global development is being challenged by compounding global crises, a fledgling pandemic recovery, and macroeconomic headwinds. Emerging Markets and Developing Economies (EMDEs) are bearing a significant burden of the climate crisis, growing geopolitical fragility, reversals in human capital and poverty eradication gains, and broad-based growth slowdown. These concurrent global crises are stalling gains across the Sustainable Development Goals (SDGs) and threatening prosperity and peace, particularly for the most vulnerable. 2. The World Bank Group (WBG) is responding and evolving to better address these intertwined and mutually reinforcing global challenges through a strategic review of its vision/mission, operating model, and financial capacity (“World Bank Group Evolution”). Working as One WBG, the Evolution Roadmap sets out a plan to confront these global challenges, stepping up efforts to end extreme poverty and promote shared prosperity on a livable planet. Spending needs are significant, with trillions of dollars of additional investment per year required in EMDEs to make progress on the SDGs and address existing global challenges.1 Achieving progress will require a significant increase of development finance with a particular emphasis on facilitating private capital flows and the private sector as a driver of job creation, innovation, and economic growth. IFC, as the leading private sector-focused Development Finance Institution (DFI), is delivering impact at scale through the domestic and international private sector. 1 A recent report of the G20 Independent Expert Group cited the need for US$3 trillion in additional investments per year by 2030, and the World Bank estimates that average annual spending needs for developing countries to address the global challenges of climate change, conflict, and pandemics are US$2.4 trillion per year between 2023 and 2030. -30-  IFC Document No. 1 3. As FY23 results show, IFC has successfully increased its efforts and played a stabilizing and catalytic role in client markets, which have endured precarious financing conditions on the back of significant economic headwinds and intensifying global challenges, such as climate shocks, increasing fragility and rising food insecurity. Looking ahead, IFC will step up its engagement across all client countries, with a clear focus on addressing global challenges. Key thematic areas of focus include: (A) climate change, (B) gender and inclusion, (C) building resilience through food security and health, (D) fragility, and (E) digitalization. These near-term strategic priorities, as highlighted in IFC’s Strategy and Business Outlook (SBO FY24-26) 2, are anchored in the 2030 Capital Increase Package (CIP) commitments and align well with the WBG Evolution aspirations. 4. As IFC embarks on extending its efforts to meet the ambitions of its 2018 capital package and the World Bank Group Evolution, it will build on the strong momentum achieved in FY23 despite challenging external conditions. At over $43 billion, IFC’s FY23 commitments resulted in the highest-ever year-on- year growth, at roughly 30 percent, and the largest commitment volume achieved in IFC’s history. Specifically, IFC outperformed on both its own account and mobilization targets, while achieving unprecedented highs for trade, supply chain, and working capital finance. IFC also exceeded its climate and gender targets and committed higher than the target number of projects in Low Income Countries (LICs) and fragile markets. 5. In line with strategic priorities, IFC has continued to pursue new approaches, initiatives, and innovative partnerships to help address the development challenges prevalent across EMDEs. In climate, IFC’s upstream work on blue bonds, including the launch of the Blue Finance Guidelines to set market standards, has enabled IFC’s blue bond and loan commitments across geographies from East Asia to Europe and Latin America. IFC issued a first-of-its-kind Biodiversity Finance Reference Guide for investors, endorsed by the UN Convention on Biological Diversity, to articulate accepted use of proceeds for biodiversity finance. With respect to gender and inclusion, IFC delivered landmark deals such as the issuance of the first gender bond in Brazil by Itaú Unibanco, supporting women-owned Small and Medium Enterprises (SMEs). IFC’s Platform approach is being leveraged to scale program delivery, including further work in supporting resilience in food and healthcare value chains, amongst others. To further promote digitalization and entrepreneurship, IFC has also launched new platforms supporting technology- enabled SMEs through, for example, the expansion of the Startup Catalyst Expansion Platform and the Africa and Middle East, Central Asia, and Pakistan Venture Capital Platform. To deepen IFC’s ongoing engagement in forced displacement, the Corporation is partnering with the United Nations High Commissioner for Refugees (UNHCR) to build opportunities for IFC and UNHCR to increase impact in this important space. 6. Global stakeholders are calling upon MDBs to enable more private investment in EMDEs; IFC has been and will continue to be at the forefront of this effort. To grow private sector investment opportunities, IFC will further strengthen its origination capabilities and utilize its Upstream and Advisory work to expand the pipeline of bankable projects, including through the deployment of more blended finance where appropriate. IFC will leverage the One WBG approach in support of private sector facilitation through reforms and increase mobilization through a range of efforts, including scaling its use of mobilization platforms, pioneering an originate-to-distribute model (WESP) to efficiently scale mobilization, and deepening collaboration with new and existing partners, such as institutional investors or the recently established Private Sector Investment Lab. 2 IFC/SecM2023-0104 -31-  IFC Document No. 1 FY23 Operational Results 7. In delivering to clients, IFC employed its comprehensive suite of products, delivering exceptional results with a combined volume of US$43.7 billion for long- and short-term finance commitments – IFC’s strongest performance on record. At the end of FY23, IFC's total LTF commitments – which include Core Mobilization – reached US$31.7 billion, 120 percent of the FY23 Corporate Scorecard target of US$26.4 billion. IFC Own Account (O/A) commitments reached US$16.7 billion (110 percent of US$15.2 billion target). Core Mobilization represented 47 percent of IFC’s LTF commitment volume (US$15.0 billion). Notwithstanding the significant year-on-year ramp up in program, delivery was consistent throughout the year without bunching in the final quarter. The total number of LTF projects was 325 compared to 296 in FY22, with an average AIMM score of 56 (above the annual target of 50). 8. Short-Term Finance (STF) reached a record US$11.0 billion, representing 133 percent of the FY23 target and 14 percent above FY22, driven by increased demand globally, and particularly in IDA-FCS markets. STF IDA-17+ FCS commitments were over US$7.5 billion or 68 percent of the total, compared to US$6.7 billion or 69 percent in FY22. 9. IFC’s investment portfolio exposure as of FY23-end stood at US$70.1 billion, a US$6.3 billion increase from FY22-end, with an outstanding portfolio of US$57.5 billion, higher than FY22-end (US$49.5 billion). 10. IFC’s advisory program delivered US$260 million in client-facing projects, growing by four percent (US$9 million) compared to last FY. The advisory program is focused on strategic priority areas with a substantial share of the program being in IDA countries (54 percent), FCS countries (28 percent) and in the climate space (27 percent). The Upstream program enabled 47 mainstream Investment projects in FY23, with a total LTF volume of US$4.4 billion, of which 55 percent was climate focused, and 31 percent in IDA-FCS countries. 11. FY23 total LTF delivery and the advisory program spending by region are in Table 1. Table 1: FY23 IFC LTF Program Delivery and Advisory Program Spending by Region US$, millions LTF Program Advisory Program Delivery Spending Africa (AFR) 6,900 98 Middle East (ME) 670 13 Central Asia and Türkiye (CAT) 3,836 12 Europe (EUR) 3,612 21 Latin America and the 9,492 27 Caribbean (LAC) East Asia and the Pacific (EAP) 3,663 34 South Asia (SA) 3,451 23 Global (WLD) 81 32 Total 31,705 260 -32-  IFC Document No. 1 Performance in IFC’s Strategic Focus Areas 12. Program delivery in FY23 maintained a sharp focus on the strategic areas of climate as well as gender and inclusion, with an increasing number of projects addressing multiple priorities. IFC’s delivery in IDA-17 + FCS expanded its geographic footprint compared to FY22, with project count increasing 18 percent year-on-year, including in countries where IFC has had a limited presence in recent years. 13. IFC’s strong commitment to climate finance was showcased by the unprecedented delivery in FY23. IFC finished the year with O/A commitments at 46 percent, well above the 35 percent target, with a record US$7.6 billion committed. Climate-focused investments exceeded US$14 billion for the first time, on the back of a spectrum of innovative and first-of-their-kind projects across the financial and real sectors. Among the innovative instruments, IFC committed US$2.4 billion in green finance, US$198 million in the emerging area of blue finance, and US$1.7 billion in sustainability-linked finance. 14. In FY23, IFC also closed its largest-ever climate transaction, with US$1.4 billion in total financing to enable the construction and operation of the first zero-fossil fuel pulp mill in Latin America and the Caribbean (LAC), Suzano Climate. In addition to supporting pioneering financial instruments to tackle the climate challenge, IFC provided US$47 million in financing to the Africa Go Green Fund, the first structured debt fund in Africa focused on energy efficiency, anchored a local-currency sustainability-linked bond in Poland, and made inroads into decarbonizing the hard-to-abate sectors through an equity investment in Brazil. Other landmark climate transactions included ALD Green Fleet (largest e-mobility project in IFC’s history), Sococim Low Carb (IFC’s first Green Loan for cement in Africa), OCP Solar (IFC’s first Green Loan in the real sector in Morocco and its largest ever investment in the commercial and industrial sector), and Boston Metal (IFC equity investment to support commercialization of breakthrough technology aimed at eliminating carbon emissions from steel production). 15. As the pandemic has reversed many hard-won gains in gender equality, IFC remains steadfastly committed to an inclusive recovery. Given that women face increased difficulties accessing formal finance, IFC provided additional financing to women and women-owned enterprises. Gender targets were surpassed in FY23, with unprecedented levels of financing committed to women-owned enterprises. These notable investment results were complemented by impactful advisory engagements. In FY23, 55 percent of new Advisory Services projects and 33 percent of committed LTF Investment projects included a gender lens. For example, IFC supported a risk-sharing facility to scale Bank of Africa’s lending to small and medium enterprises, including women-owned businesses, in 10 countries in Sub-Saharan Africa. In parallel, IFC continues to provide advisory support to help the bank strengthen its women-owned SME portfolio. Another notable project in FY23 included the first Banking on Women engagement in Moldova, an IDA-17 country. 16. In LICs and fragile markets, IFC executed a record-breaking number of projects in FY23. While LTF IDA-17+FCS investments reached 21 percent of IFC’s LTF O/A volume, below the 31 percent target, volumes were nearly on par with an all-time high FY22 result of US$3.5 billion. Projects included a host of smaller, impactful investments with many in countries that IFC had not committed transactions in several years, such as Chad, Moldova, Samoa, and South Sudan. LTF IDA-17+FCS & LIC-IDA-17 was 8 percent of LTF O/A volume, which is below the 11 percent target. While smaller, these transactions are highly impactful, driving the goal of inclusive growth in the face of mounting development challenges. 17. In support of private sector financing needs in Ukraine in the wake of Russia’s invasion and in preparation for reconstruction, IFC committed US$366 million in trade and SME finance, agriculture, and technology sectors, almost entirely without blended finance. IFC secured US$251 million from donors to support scale-up of the response in FY24. IFC is also working Upstream and providing advisory support to enable private capital mobilization during reconstruction. In FY24-25, IFC will further scale climate, -33-  IFC Document No. 1 inclusion, and innovation as well as focus on Ukraine’s reconstruction and regional ramifications in energy, transport, and value chains. Beyond FY24, IFC will focus on (i) the incomplete transition, (ii) stagnating productivity, (iii) shallow financial markets, and (iv) the use of PPPs to reduce fiscal pressure and improve service provision. 18. Core Mobilization made a critical contribution to IFC’s record result in FY23, with US$15 billion raised from partners, up 42 percent from FY22. A broad array of IFC mobilization products contributed to this result, led by syndications (US$5.5 billion) and Public-Private Partnerships (US$3.7 billion). By region, LAC (US$5.6 billion), Central Asia and Türkiye (CAT) (US$2.1 billion), and Europe regions (US$1.4 billion) each ended FY23 with their highest Core Mobilization volumes ever. Mobilization in Africa (US$3.1 billion, up by US$588 million) and South Asia (US$1.3 billion, up by US$936 million) also showed impressive year-on-year increases. On the industry side, global MAS delivered record Core Mobilization volume of US$3.5 billion while global INR delivered US$2.8 billion, up by US$797 million. Notably, the global climate-related mobilization volume (45 percent, up from 32 percent) also recorded a significant year-on-year increase. 19. Notable FY23 Core Mobilization projects included the sustainability-linked loan for the Brazilian pulp and paper mill deal Suzano Climate (US$1.2 billion); IFC’s largest-ever mobilization in Egypt, the AMEA joint wind-solar projects (US$603 million); Uzbekistan’s three mobilizations: the country’s first competitively tendered gas-based thermal power plant Syrdarya CCGT (US$262 million parallel loan), Syrdarya UZ CCGT (US$624 million PPP), and Uzbek Scaling Solar 2 (US$355 million PPP), the Growth Equity Fund project Multiples IV (US$349 million) in India; and the Trade and Supply Chain Mauritania deal RSE GTST MRT22 (US$340 million). 20. IFC continued its proactive COVID-19 response with financing totaling US$25.4 billion in long and short-term O/A finance and core mobilization as of FY23-end (see Table 2). Initially, IFC focused on working with financial intermediaries to channel immediate liquidity assistance to viable companies. It also sustained the functioning of international trade amid dire logistical disruptions. The Fast-Track COVID-19 Facility (FTCF), which reached 97 percent usage at expiration, was critical for these efforts. During its three years of operation, the FTCF reached 185 clients in over 70 countries in all of IFC’s regions of operation. Complementing the financial sector response, IFC also had a robust footprint in the real sector, including in tourism, manufacturing, construction, education, and retail. Investment projects were supplemented with advisory engagements to help clients navigate the new operating environment. With the approval of the GHP and Base of the Pyramid (BoP) platforms, the response began to pivot away from emergency support to existing clients toward systemic interventions, paving the way for a sustainable and inclusive recovery, including with new clients. 21. Providing essential services to the poorest and boosting inclusion continued to be a prominent theme of IFC’s delivery focus in the past fiscal year. The Base of the Pyramid (BoP) platform was extended in June, with a US$400 million increase of the envelope. Initially conceived as an extension of the FTCF, the platform has been instrumental in providing access to finance for underserved small enterprises, mostly in IDA-17+FCS countries, where close to two-thirds of the platform’s commitments have been deployed so far. In FY23, the BoP provided a US$15 million loan to CJSC Kyrgyz-Investment and Credit Bank, a long-standing IFC client, to increase access to finance for underserved individuals and micro-enterprises in the Kyrgyz Republic, with a particular focus on sustaining affordable housing finance for low-income individuals. -34-  IFC Document No. 1 Table 2: IFC COVID-19 Response Own Account Core Total Mobilization (Cumulative as of June 30, 2023) Project Volume o/w IDA17+FCS US$, millions Count IDA17+ % FCS FTCF Real Sector Envelope 49 1,871 544 29 % 929 2,800 Working Capital Solutions 42 1,970 1,208 61 % 182 2,152 Global Trade Liquidity Program 6 1,925 376 20 % 1,925 3,850 Base of the Pyramid 39 600 416 69 % 105 705 Global Trade Finance Program n/a 2,000 1,140 57 % n/a 2,000 Sub-Total 136 8,366 3,685 44 % 3,141 11,507 COVID GTFP Broader Crisis Response n/a 4,780 3,277 69 % n/a 4,780 Financing Global Health Platform 20 1,353 88 7% 576 1,929 Outside Broader LTF Crisis Response 38 2,617 505 19 % 4,537 7,154 of the Sub-total 58 8,750 3,871 44 % 5,112 13,862 FTCF Total 194 17, 116 7,555 44 % 8,253 25,369 22. The Financial Institutions Group (FIG) achieved record performance by seizing market opportunities, particularly in climate, housing finance, and gender, while also expanding key partnerships with global and regional banks through innovative capital market transactions that also helped mobilize private capital (such as the innovative synthetic risk transfer with BNP Paribas and a host of thematic bonds). In FY23, FIG made significant strides in financial inclusion in challenging markets, including by leveraging blended finance support. FIG employed targeted platforms such as the Small Loans Guarantee Program (SLGP) and BoP, with notable investments in IDA-17+FCS as well as engagements with new clients. Examples include the SLGP EC project in Ukraine and IFC's first investment in Samoa in 14 years. Table 3: FY23 IFC Financial Institution (FI) LTF Program Delivery US$, millions FY23 FY22 Africa (AFR) 2,583 1,879 Middle East (ME) 284 278 Central Asia and Türkiye (CAT) 1,390 960 Europe (EUR) 2,025 450 Latin America and the Caribbean region (LAC) 3,538 2,980 East Asia and the Pacific (EAP) 2,115 2,085 South Asia (SA) 1,156 908 Global (WLD) 58 1 Total 13,149 9,541 23. Moreover, IFC’s LTF and STF trade and supply chain finance program together delivered US$15.6 billion in FY23, of which STF contributed another record of US$12.0 billion (see Table 4). This trade and supply chain finance program was an immensely impactful contributor for both FIG and MAS, reaching its highest commitments on record. In addition to significantly increasing volumes, the trade and supply chain team is focused on expanding its reach into the most difficult markets by onboarding new banks and suppliers in countries such as Burundi, Iraq, Mauritania, Samoa, and Yemen. This is leading to the development of new relationships in countries where trade is critically needed to foster development. -35-  IFC Document No. 1 Table 4: IFC FY23 Trade and Supply Chain Finance Commitments US$, millions Own Account Core Mobilization LTF STF LTF STF Global Trade Liquidity Program (GTLP) 875 - 875 - Global Structured Trade Finance Program (GTST) 80 - 635 - Global Warehouse Finance Program (GWFP) 160 - 440 - Global Trade Finance Program (GTFP) 21 8,884 - 996 Global Trade Supplier Finance (GTSF) - 2,143 - 21 Global Supplier Chain Finance Program (GSCF) 38 - 38 - Working Capital Solutions (WCS) COVID-19 only 400 - - - Total 1,574 11,026 1,988 1,017 24. In FY23, Manufacturing Agribusiness and Services (MAS) capitalized on an improved investment environment, closing several large climate-focused transactions with significant mobilization volumes in agriculture and forestry, as well as manufacturing. Supporting the transition of hard-to-abate sectors, such as cement production (BUA Nigeria, Sococim Senegal), is a key focus for IFC’s work in the climate space. Overall, MAS climate commitments reached a record 58 percent of O/A volume, with the climate share reaching a remarkable 86 percent for investments covering the tourism, retail, and property sectors. 25. Agribusiness remained in focus during FY23 amid acute food insecurity, with particularly dire implications in IDA-17+FCS countries. In FY23, IFC committed a total of US$1.5 billion in agribusiness investments. The deployment of the GFSP will allow IFC to build on this delivery momentum going forward, enabling teams to tackle food security issues from a more systemic, cross-cutting perspective. The first two GFSP investments not only strengthened food supply chains in Bangladesh (Meghna Rice) and Morocco (OCP Solar, IFC’s first green loan in the country’s real sector) but also made them more sustainable. Table 5: FY23 IFC Real Sector LTF Program Delivery - MAS and INFRA MAS INFRA Industry FY23 FY22 FY23 FY22 US$, millions Africa (AFR) 2,178 1,345 1,707 1,594 Middle East (ME) 337 50 25 91 Central Asia and Türkiye (CAT) 569 169 876 526 Europe (EUR) 943 362 432 32 Latin America and the Caribbean region (LAC) 2,378 803 1,536 856 East Asia and the Pacific (EAP) 465 1,613 929 884 South Asia (SA) 497 439 533 364 Global (WLD) 5 1 1 0 Total 7,371 4,782 6,038 4,347 26. With the objective to promote resilient recovery, IFC prioritized investments in sectors with the potential to play a key role in green recovery efforts, such as green energy and climate smart cities, as well as those that build local capacity for weathering future crises, especially in the healthcare space. The GHP was a key tool in this respect, supporting the localization of vaccine and medical equipment production. Since its launch in July 2020, the GHP reached US$1.9 billion in commitments for 20 projects. Five projects were committed under the GHP in FY23, including investments to support pharmaceutical companies in Brazil and medical distribution and manufacturing networks in Africa, moving the IFC response toward longer-term healthcare solutions across client countries. -36-  IFC Document No. 1 27. Infrastructure (INR) markedly increased its year-on-year volumes, but also sharpened its climate and gender focus, offering clients a range of innovative sustainability-linked products. These pioneering instruments are critical for meeting evolving market needs and broadening the client base. A remarkable 75 percent of INR transactions in LAC were gender-tagged on the back of strong demand from power and sanitation utilities for sustainability-linked financing tied to gender equity. 28. Similarly, Disruptive Technology and Funds (CDF) grew its program considerably by continuing to focus its activities on (i) growth equity funds supporting mid-market companies, with co-investments now representing 18 percent of commitments, (ii) early-stage VC funds, including in the climate and agribusiness space, and (iii) ecosystem building initiatives in fragile and low-income countries, often supported by blended finance instruments. To realize the potential for developing economies, IFC has built on the FY21-FY22 momentum and continued to grow its investments in digital infrastructure, reaching US$1,460 million in commitments in FY23 (see Table 6). 29. The recently approved platforms – Start-Up Catalyst (ISC) Expansion II and Africa MCAP Venture Capital Platform – will be critical tools for IFC to deepen its reach to the nascent venture ecosystems in these underserved markets. For example, one of the first projects under the Africa MCAP Venture Capital Platform is a US$3.7 million investment in ANKA that will support small creative-industry entrepreneurs in West Africa. Table 6: FY23 IFC CDF LTF Program Delivery US$, millions FY23 FY22 Africa (AFR) 278 210 Middle East (ME) 25 36 Central Asia and Türkiye (CAT) 9 6 Europe (EUR) 200 69 Latin America and the Caribbean region (LAC) 113 196 East Asia and the Pacific (EAP) 142 173 South Asia (SA) 675 265 Global (WLD) 18 7 Total 1,460 962 30. Looking ahead, IFC’s LTF O/A investment pipeline for FY24 was US$25.2 billion as of FY24 July-end. This represents a 38 percent increase (US$6.9 billion) compared to the same period in the previous fiscal year and stands in sharp contrast to previous fiscal years, where the pipeline volume would typically drop following strong commitment momentum in the fourth quarter. This shift is the result of IFC’s concerted efforts to deliver its program at a more measured pace, minimizing bunching. More importantly, it also clearly demonstrates IFC’s commitment to increasing emphasis on, and ramping up, its business development activity. 31. IFC’s Upstream pipeline had 587 projects at FY23 Q4-end, targeting nearly US$33.8 billion in potential IFC O/A investment over the next five years. Pipeline growth moderated over the course of FY23 after an early period of rapid growth, increasing by approximately 13 percent against its FY22 volume as IFC’s Upstream effort approached a more steady state of operations, and new projects replaced successful conversions and dropped projects. For FY24, IFC will continue to shift its focus to investment conversion and pipeline replenishment. -37-  IFC Document No. 1 FY23 Financial Results 32. Net income for FY23 was US$672 million as compared to a net loss of US$464 million in FY22, an increase of US$1.1 billion or 245 percent. This was primarily driven by reversal of mark-to-market losses from the previous year and additional interest income in Treasury, as well as higher income from loans and debt securities. Treasury's results benefited from more favorable market movements, while strong returns for the debt portfolio were due to portfolio growth and lower loan loss provisions. 33. IFC's equity investment portfolio returned US$191 million in FY23 as compared to US$208 million in FY22, a decrease of US$17 million, or 8 percent. The FY23 return comprised dividends (US$164 million), realized gains on sales (US$161 million) and unrealized losses (US$134 million). 34. Net income from loans, debt securities and associated derivatives, net of allocated charges on borrowings, was US$1.6 billion in FY23 as compared to US$1.1 billion in FY22, an increase of US$0.5 billion, or 45 percent. Unrealized gains from loans and debt securities was US$175 million in FY23, as compared to unrealized losses of US$123 million in FY22. IFC recorded provisions for losses of US$29 million as compared to US$140 million in FY22. Included in the FY22 provision was a qualitative overlay of US$135 million, which remained unchanged at FY23-end. 35. IFC reported income of US$241 million on liquid assets, net of allocated charges on borrowings in FY23, compared to a loss of US$521 million in FY22, an increase of US$762 million or 146 percent. Treasury income benefited from more favorable market movements in FY23. 36. IFC’s administrative expenses were US$1,175 million in FY23 compared to US$1,102 million in FY22, an increase of US$73 million (or 7 percent) primarily driven by higher staff costs and higher travel expenses. Pension expenses decreased by US$48 million (or 18 percent), to US$214 million in FY23, from US$262 million in FY22. 37. IFC’s capital adequacy measure, as measured by the Capital Utilization Ratio, decreased to 60.7 percent at the end of FY23, down from 62 percent at the end of FY22. The improvement in the ratio was largely attributed to an increase in Capital Available. There was also an increase in Capital Required. Throughout FY23, IFC’s CUR was well within the established threshold of < 88 percent. -38-  IFC Document No. 1 Table 7: Consolidated Statements of Operations for each FY ended June 30 US$, millions 2023 2022 2021 Income from investments Income from loans and guarantees, including realized gains and losses on loans and associated derivatives $ 2,290 $ 1,156 $ 1,116 (Provision) release of provision for losses on loans, off-balance sheet credit exposures and other receivables (22) (126) 201 Income from equity investments and associated derivatives 191 208 3,201 Income from debt securities, including realized gains and losses on debt securities and associated derivatives 518 414 340 Provision for losses on available-for-sale debt securities (7) (14) (3) Total income from investments 2,970 1,638 4,855 Income (loss) from liquid asset trading activities 1,464 (413) 327 Charges on borrowings (2,598) (302) (326) Income from investments and liquid asset trading activities, after charges on borrowings 1,836 923 4,856 Other income Upstream and Advisory services income 247 233 237 Service fees 128 142 146 Other 143 44 212 Total other income 518 419 595 Other expenses Administrative expenses (1,430) (1,441) (1,355) Upstream and Advisory services expenses (317) (287) (277) Other, net 26 75 (55) Total other expenses (1,721) (1,653) (1,687) Foreign currency transaction (losses) gains on non-trading activities (86) 76 (148) Income (loss) before net unrealized gains and losses on non-trading financial instruments accounted for at fair value and grants to IDA 547 (235) 3,616 Net unrealized gains (losses) on non-trading financial instruments accounted for at fair value 125 (229) 806 Income (loss) before grants to IDA 672 (464) 4,422 Grants to IDA — — (213) Net income (loss) $ 672 $ (464) $ 4,209 -39-  IFC Document No. 1 FY24 Budget 38. Following record results achieved in FY23, the FY24 budget will enable IFC to support its ambitious FY24 program delivery as IFC leans into its strategic priorities that are anchored in the 2030 CIP commitments and fully aligns with the WBG Evolution Roadmap aspirations. 39. IFC’s Board approved the FY24 Administrative Budget of US$1,306.6 million, representing an increase of US$52 million or 0.75 percent in real terms (4.15 percent in nominal terms) over FY23’s Administrative Budget. Additionally, the Board approved the FY24 Capital Budget of US$64 million, which will fund IFC’s investments in facilities and information technology. 40. The incremental budget resources will be primarily used to (i) strengthen staff capacity in priority areas by bringing in additional/new skills and increasing seniority in Country Offices (COs), (ii) finalize the implementation of the London Interbank Offered Rate (LIBOR) transition to the Secured Overnight Financing Rate (SOFR), (iii) ramp up business development activities across all client countries, and (iv) ensure adequate funding for proactive management of the portfolio, which is growing in size and complexity. 41. Management remains committed to cost discipline. From FY19 through FY23, IFC has realized a total of $314 million of efficiency savings and estimates another $60 million in FY24. 42. The Administrative Budget comprises 68 percent of IFC’s Total Resources of US$1,918 million. Other funding sources account for the remaining 32 percent (US$612 million) as shown in Table 8. Table 8: IFC’s FY24 Total Resources US$, millions FY20 FY21 FY22 FY23 FY24 Administrative Budget 1.112 1,139 1,177 1,255 1,307 Trust Funds1 421 460 430 430 430 Earmarked Service Fees and Others 241 224 196 196 182 IFC Total Resources 1,773 1,823 1,803 1,880 1,918 % Growth Total Resources 2.8% (1.1%) 4.3% 2.0% 1Includes CMAW, FMTAAS and Donor Funds. Use of IFC’s FY23 Net Income: Retained Earnings and Designation of Retained Earnings 43. IFC's contributions to Upstream and Advisory funding are made from both its Administrative Budget and Income Designations. 44. Amounts available to be designated are approved by the Board of Directors and are determined based on a Board-approved income-based formula and on a principles-based financial distribution policy, also approved by the Board. Since FY17, in accordance with a Board-approved framework, IFC has utilized a sliding scale formula and a waterfall of priorities for its income designations. For FY23, the amount available for designations, based on IFC’s income excluding Unrealized Gains and Losses on Investments and Borrowings, was US$681 million, allowing for a maximum designation of US$66 million under the Board-approved sliding-scale formula. -40-  IFC Document No. 1 45. Creating Markets Advisory Window (CMAW) and Funding Mechanism for Technical Assistance and Advisory Services (FMTAAS) are mechanisms for IFC to contribute its funding through designations of its Net Income. Based on the projections for FY24-25 spend, IFC will maintain a two-year cushion for CMAW. As the June 30, 2023 balance for CMAW is already sufficient for a two-year cushion, no designation to CMAW in FY24 is needed. 46. For FMTAAS, the available balance as of June 30, 2023 was not sufficient to cover the projected spend in FY24-25. The amounts needed to replenish a two-year and a three-year cushion for FMTAAS were US$52 million and US$102 million, respectively. Therefore, IFC will designate the entire amount available for designation to FMTAAS. 47. In FY22, IFC designated US$6 million to FMTAAS that should not have been designated, due to a classification issue regarding the timing of realizing losses on the sale of an equity investment, which led to an overestimation of the amount available for designations under the income-based formula. IFC will resolve the issue by adjusting the designations to FMTAAS from US$66 million to US$60 million. 48. From FY04 through FY23, IFC cumulatively designated US$5.8 billion out of retained earnings, of which US$3.9 billion was to IDA and US$1.9 billion was towards FMTAAS, CMAW, and other special initiatives that included activities in Fragile and Conflict-Affected Situations (FCS) and International Development Association (IDA) countries. This reflects IFC’s strong commitment to increasing private sector investment and making a difference in the poorest and most fragile countries. -41-  IFC Document No. 1 INTERNATIONAL FINANCE CORPORATION BOARD OF GOVERNORS (DRAFT) Resolution No. ____ RESOLVED: 1. THAT the Board of Governors of the Corporation consider the Consolidated Financial Statements and Independent Auditors’ Report included in the 2023 Annual Report and the Administrative Budget contained in the Report to the Board of Governors on IFC’s FY23 Operational and Financial Results and FY24 Budget (the “Report”), as fulfilling the requirements of Article IV, Section 11, of the Articles of Agreement and of Section 16 of the By-Laws of the Corporation. 2. THAT the Corporation’s FY23 Net Income of US$672 million shall be transferred to undesignated retained earnings; and 3. THAT the Corporation be authorized to conclude the designation of US$60 million of retained earnings for IFC’s Funding Mechanism for Technical Assistance and Advisory Services (FMTAAS) in IFC's Fiscal Year 2023 financial statements is hereby noted with approval. -42-  MIGA DOCUMENTS -43-  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO The 2023 MIGA Annual Report will be available on MIGA’s website. (https://www.miga.org/2023-annual-report) - 44 -  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO MIGA Document No. 1 October 2023 MULTILATERAL INVESTMENT GUARANTEE AGENCY COUNCIL OF GOVERNORS (DRAFT) Resolution No. __ Financial Statements and the Report of the Independent Accountants ___________________________________ RESOLVED: THAT the Council of Governors of the Agency considers the Financial Statements, and the Report of Independent Accountants included in the 2023 Annual Report, as fulfilling the requirements of Article 29 of the MIGA Convention and of Section 16(b) of the By- Laws of the Agency. - 45 -  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO MIGA Document No. 2 SELECTION OF THE CHAIR AND VICE-CHAIRS OF THE COUNCIL OF GOVERNORS AND SELECTION OF THE MEMBERS OF THE MIGA PROCEDURES COMMITTEE AND ITS OFFICERS FOR 2023-2024 Document will be distributed by email to Governors by October 12, 2023 - 46 -  ICSID DOCUMENTS 47  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO The advance copy of the 2023 ICSID Annual Report can be accessed through this link. The report will be publicly available on ICSID’s website on October 13, 2023 (https://icsid.worldbank.org/resources/publications/icsid-annual-report) - 48 -  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO ICSID Document No. 1 September 7, 2023 THE 2023 ANNUAL REPORT OF THE CENTRE Note of the Secretary-General The 2023 Annual Report on the operation of the Centre, covering the period July 1, 2022 to June 30, 2023, is being distributed separately to the Administrative Council for its approval pursuant to Administrative and Financial Regulation 5(3). It is recommended that the Council approve this Report, in accordance with Article 6(1)(g) of the Convention, by adopting the following resolution: APPROVAL OF THE ANNUAL REPORT The Administrative Council RESOLVES To approve the 2023 Annual Report on the operation of the Centre. - 49 -  OFFICIAL USE ONLY THE WORLD BANK BOARDS OF GOVERNORS • 2023 ANNUAL MEETINGS • MARRAKECH, MOROCCO ICSID Document No. 2 June 30, 2023 PROPOSED BUDGET OF REVENUES AND EXPENDITURES FOR FISCAL YEAR (FY) 2024 Report and Proposal of the Secretary-General 1. Pursuant to Administrative and Financial Regulation 19(2), I have prepared and hereby submit the Centre’s budget for FY2024 (the period of July 1, 2023 to June 30, 2024) to the Administrative Council. The results of the Centre’s FY2023 budget will be published in the 2023 Annual Report of the Centre. 2. The proposed FY2024 budget authorizes expenditures in an amount of US$17,946,895 and is presented below: US$ Projected receipts of the Centre from registration fees, administration fees, other sources, and carryover funds from prior years 17,946,895 Staff services 14,968,595 Communications and information technology 1,448,010 Office occupancy, equipment and supplies 1,225,759 Travel 58,625 Contractual services 133,192 Other expenses 112,714 Total 17,946,895 -50-  ICSID Document No. 2 3. The funds to cover the expenditures of the Centre during FY2024 recommended in paragraph 2 will be provided from the Centre’s projected receipts from registration fees, administration fees, other sources and funds carried over from the previous years. Effective July 1, 2023, the Centre will adjust its annual administrative fee from US$42,000 to US$52,000 for all new and pending cases. No contribution from the administrative budget of the International Bank for Reconstruction and Development (IBRD), pursuant to the Memorandum of Administrative Arrangements concluded between the IBRD and the Centre, will be necessary in FY2024. No assessment of Contracting States pursuant to Article 17 of the Convention will be necessary either. 4. The proposed expenditures of US$17,946,895 for FY2024 include: (a) the provision of services by legal and support staff; (b) information technology, such as document management, case management and finance systems, web-related services and office equipment; (c) office space and administrative services and facilities, such as communications, supplies, printing and translation services; (d) miscellaneous information activities, attendance at international conferences in the area of the Centre’s functions, and contacts with present and prospective member governments; and (e) specialized publications, including the 2023 Annual Report of the Centre. 5. During FY2023, the Centre registered 45 new cases. In addition, the Centre registered 11 applications to institute annulment proceedings, one application for the revision of the award, five requests for the rectification of the award, one request for rectification and supplementary decision, and one request for a supplementary decision of the award. The Centre also received one request for mediation under its new Mediation Rules. Sixty-eight proceedings were concluded and over 200 hearings and sessions were held. Two hundred and seventy-six cases are now pending before the Centre, bringing the total number of ICSID cases at the end of FY2023 to 933. In the course of the fiscal year, the Centre administered 329 ICSID cases. The Centre’s expenses, which are directly attributable to the proceedings, are borne by the parties in accordance with the Centre’s Administrative and Financial Regulations and are not a charge to the Centre’s budget. 6. During FY2023, the Centre published three issues of ICSID Review—Foreign Investment Law Journal and completed two updates to the Investment Laws of the World and Investment Treaties collections. During FY2023, the Centre also published two issues of its online publication The ICSID Caseload-Statistics. The Centre continues to use Twitter, LinkedIn and YouTube, providing further means to share information on trends and developments at ICSID and engage with the public. 7. Administrative and Financial Regulation 19(5) provides that, pending adoption of the budget by the Administrative Council, the Secretary-General may incur expenditures for the purposes and within the limits specified in the proposed budget, up to one quarter of the amount authorized for FY2024. 8. Article 6(1)(f) of the Convention provides that the Administrative Council shall adopt the annual budget of revenues and expenditures of the Centre. It is proposed that the Council do so by adopting the following Resolution: -51-  ICSID Document No. 2 ADOPTION OF BUDGET FOR FISCAL YEAR 2024 The Administrative Council RESOLVES To adopt the budget for the period July 1, 2023 to June 30, 2024 set forth in paragraph 2 of the Report and Proposal of the Secretary-General on the Budget for Fiscal Year 2024, dated June 30, 2023. -52- Saatja: Governors Portal <[email protected]> Saadetud: 29.09.2023 18:41 Adressaat: Governors Portal <[email protected]> Teema: 2023 Annual Meetings of the Governors of The World Bank – Annual Meetings Governors’ Documents Manused: 2023 Annual Meetings Governors Documents_16932993240220000.pdf Dear Governors and Alternate Governors of the World Bank and ICSID Council Members: Please find attached the documents for the 2023 Annual Meetings of the Boards of Governors of the IBRD, IFC, and IDA, the MIGA Council of Governors, and the ICSID Administrative Council. Governors’ documents will also be posted under “Annual Meetings Documents” in the Governors’ Portal. • 2023 Annual Meetings Governors Documents Weblinks to Annual Reports: • 2023 IBRD-IDA Annual Report • 2023 IFC Annual Report (Link will be launched on October 4, 2023) To access the Report before the launch date, please use this link. • 2023 MIGA Annual Report • 2023 ICSID Annual Report (Link will be launched on October 13, 2023) To access the Report before the launch date, please use this link. Sincerely, Mercy Tembon Vice President and Corporate Secretary Corporate Secretariat 1818 H Street NW Washington DC, 20433 USA *** This is an automated message, so please do not reply directly to this email. For any questions/queries, please email WBG Corporate Secretariat at [email protected]. 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