International Bank for Reconstruction and Development

The International Bank for Reconstruction and Development was created in 1944 to help Europe rebuild after World War II. Today, IBRD provides loans and other assistance primarily to middle income countries.

IBRD is the original World Bank institution. It works closely with the rest of the World Bank Group to help developing countries reduce poverty, promote economic growth, and build prosperity.

IBRD is owned by the governments of its 188 member countries, which are represented by a 25-member board of 5 appointed and 20 elected Executive Directors.

The institution provides a combination of financial resources, knowledge and technical services, and strategic advice to developing countries, including middle income and credit-worthy lower income countries.  Specifically, IBRD:

       .    Supports long-term human and social development that private creditors do not finance

•             Preserves borrowers’ financial strength by providing support in times of crisis, when poor people are most adversely affected

•             Promotes key policy and institutional reforms (such as safety net or anti-corruption reforms)

•             Creates a favorable investment climate to catalyze the provision of private capital

•             Facilitates access to financial markets often at more favorable terms than members can achieve on their own

IBRD’s Services

The World Bank Group works with middle income countries simultaneously as clients, shareholders, and global actors. As this partnership evolves, IBRD is providing innovative financial solutions, including financial products (loans, guarantees, and risk management products) and knowledge and advisory services (including on a reimbursable basis) to governments at both the national and subnational levels.

IBRD finances projects across all sectors and provides technical support and expertise at various stages of a project.

IBRD’s financial products and services help countries build resilience to shocks by facilitating access to products that mitigate the negative impact of currency, interest rate, and commodity price volatility, natural disasters and extreme weather.

Unlike commercial lending, IBRD’s financing not only supplies borrowing countries with needed financing, but also serves as a vehicle for global knowledge transfer and technical assistance.

Advisory services in public debt and asset management help governments, official sector institutions, and development organizations build institutional capacity to protect and expand financial resources.

IBRD supports government efforts to strengthen not only public financial management, but to also improve the investment climate, address service delivery bottlenecks, and other policy and institutional actions.

History

The International Bank for Reconstruction and Development (IBRD) and International Monetary Fund (IMF) were established by delegates at the Bretton Woods conference in 1944 and became operational in 1946.[4] The IBRD was established with the original mission of financing the reconstruction efforts of war-torn European nations following World War II, with goals shared by the later Marshall Plan. The Bank issued its inaugural loan of $250 million ($2.6 billion in 2012 dollars) to France in 1947 to finance infrastructure projects. The institution also established its first field offices in Paris, France, Copenhagen, Denmark, and Prague in the former Czechoslovakia. Throughout the remainder of the 1940s and 1950s, the Bank financed projects seeking to dam rivers, generate electricity, and improve access to water and sanitation. It also invested in France, Belgium, and Luxembourg’s steel industry. Following the reconstruction of Europe, the Bank’s mandate has transitioned to eradicating poverty around the world. In 1960, the International Development Association (IDA) was established to serve as the Bank’s concessional lending arm and provide low and no-cost finance and grants to the poorest of the developing countries as measured by gross national income per capita.

Governance

The IBRD is governed by the World Bank’s Board of Governors which meets annually and consists of one governor per member country (most often the country’s finance minister or treasury secretary). The Board of Governors delegates most of its authority over daily matters such as lending and operations to the Board of Directors. The Board of Directors consists of 25 executive directors and is chaired by the President of the World Bank Group. The executive directors collectively represent all 187 member states of the World Bank. The president oversees the IBRD’s overall direction and daily operations. As of July 2012, Jim Yong Kim serves as the President of the World Bank Group. The Bank and IDA operate with a staff of approximately 10,000 employees.

Funding

Although members contribute capital to the IBRD, the Bank acquires funds primarily by borrowing on international capital markets by issuing bonds. The Bank raised $29 billion USD worth of capital in 2011 from bonds issued in 26 different currencies.[10] The IBRD has enjoyed a triple-A credit rating since 1959, which allows it to borrow capital at favorable rates.[11] It offers benchmark and global benchmark bonds, bonds denominated in non-hard currencies, structured notes with custom-tailored yields and currencies, discount notes in U.S. dollars and eurodollars.[  In 2011, the IBRD sought an additional $86 billion USD (of which $5.1 billion would be paid-in capital) as part of a general capital increase to increase its lending capacity to middle-income countries. The IBRD expressed in February 2012 its intent to sell kangaroo bonds (bonds denominated in Australian dollars issued by external firms) with maturities lasting until 2017 and 2022.

                African Development Bank

The African Development Bank Group (AfDB) is a multilateral development finance institution established to contribute to the economic development and social progress of African countries. The AfDB was founded in 1964 and comprises three entities: The African Development Bank, the African Development Fund and the Nigeria Trust Fund. The AfDB’s mission is to fight poverty and improve living conditions on the continent through promoting the investment of public and private capital in projects and programs that are likely to contribute to the economic and social development of the region. The AfDB is a financial provider to African governments and private companies investing in the regional member countries (RMC). While it was originally headquartered in Abidjan, Côte d’Ivoire, the bank’s headquarters moved to Tunis, Tunisia in 2003, due to the Ivorian civil war; before returning in September 2014.

History

Following the end of the colonial period in Africa, a growing desire for more unity within the continent led to the establishment of two draft charters, one for the establishment of the Organisation of African Unity (established in 1963, later replaced by the African Union), and for a regional development bank.

A draft accord was submitted to top African officials, then to African Ministers, before being cosigned by twenty-three African governments on August 4, 1963, in the form of an agreement establishing the African Development Bank. The agreement came into force on 10 September 1964. Although established officially in under the auspices of the Economic Commission for Africa, the AfDB began operation in 1966.

Although originally only African countries were able to join the bank, since 1982 it has allowed the entry of non-African countries as well.

During its forty years of operations, AfDB has financed 2,885 operations, for a total of $47.5 billion. In 2003, it received an AAA rating from the major financial rating agencies and had a capital of $32.043 billion.

Group entities

The African Development Bank Group has two other entities: the African Development Fund (ADF) and the Nigeria Trust Fund (NTF).

Management and control

The AfDB is controlled by a Board of Executive Directors, made up of representatives of its member countries. The voting power on the Board is split according to the size of each member’s share, currently 60%-40% between African (or “regional”) countries and “non-regional” member countries (“donors”). The largest African Development Bank shareholder is Nigeria with nearly 9 percent of the vote. All member countries of the AfDB are represented on the AfDB Board of Executive Directors.

Dr. Akinwumi Ayodeji Adesina is the 8th elected President of the African Development Bank Group, having taken the oath of office on September 1, 2015. He chairs the Boards of both the African Development Bank and the African Development Fund. Dr. Adesina served as Nigeria’s Minister of Agriculture and Rural Development from 2011 to 2015.

Member governments are officially represented at the AfDB by their Minister of Finance, Planning or Cooperation who sits on the AfDB Board of Governors. The AfDB Governors meet once a year (at the Annual Meetings of the AfDB each May) to take major decisions about the institution’s leadership, strategic directions and governing bodies. The Governors typically appoint a representative from their country to serve in the offices of the AfDB’s Board of Executive Directors.

Day-to-day decisions about which loans and grants should be approved and what policies should guide the AfDB’s work are taken by the Board of Executive Directors. Each member country is represented on the Board, but their voting power and influence differs depending on the amount of money they contribute to the AfDB.

Functions

The primary function of AfDB is making loans and equity investments for the socio-economic advancement of the RMC. Second, the bank provides technical assistance for development projects and programs. Third, it promotes investment of public and private capital for development. Fourth, the bank assists in organizing the development policies of RMCs. The AfDB is also required to give special attention to national and multinational projects which are needed to promote regional integration.

(i) Mobilizing financial resources from the Government or the foreign financial institutions with; (ii) A view to lending the money for development of specific sectors of the economy

Status

The ADB promotes economic development and social progress of its RMCs in Africa and the bank commits approximately 3 billion dollars annually to African countries. It’s relatively small lending and tendency to follow in the footsteps of more prominent public institutions like the World Bank, implies that the African Development Bank has been receiving little interest from civil society organizations as well as academia.

AfDB emphasizes the role of women along with education reforms, and lent its support to key initiatives such as debt alleviation for Heavily Indebted Poor Countries and the New Partnership for Africa’s Development (NEPAD).

The Bank is currently based in Abidjan, Côte d’Ivoire again. It employs approximately 1,020 employees as of 2007, and has 78 members: 53 countries in Africa and 25 American, European, and Asian countries.