IDA18 Mid-Term Review Implementation and Results Progress Report Towards 2030: Investing in Growth, Resilience and Opportunity Delivering on innovation and transformation & managing IDA resources for greatest impact October 24, 2018 ACRONYMS AND ABBREVIATIONS Fiscal year (FY) = July 1 to June 30 AAAA Addis Ababa Action Agenda DFID Department for International ADB Asian Development Bank Development (United ADF African Development Fund Kingdom) ADM Accountability and Decision- DPF Development Policy Making Financing AfDB African Development Bank DPO Development Policy AFR Africa region Operation AIIB Asian Infrastructure DSF Debt Sustainability Investment Bank Framework APA Alternative Procurement DRM Domestic Resource Arrangements Mobilization ASA Advisory Services and EBRD European Bank for Analytics Reconstruction and BFF Blended Finance Facility Development BOAD Banque Ouest Africaine de ECOWAS Economic Community of Développement West African States CAT-DDO Catastrophe Deferred Draw- EDB Eurasian Development Bank Down Option EFI Equitable Growth, Finance CCG Climate Change Group and Institutions CCSA Cross-cutting Solutions Area EITI Extractive Industries CEB Council of Europe Transparency Initiative Development Bank ESF Environmental and Social CEMAC Central African Economic Framework and Monetary Community EU European Union CFAA Country Financial EVP Employment Value Accountability Assessments Proposition CIF Climate Investment Fund FCI Finance, Competitiveness & CPF Country Partnership Innovation Framework FCS Fragile and Conflict-affected CPI Consumer Price Index Situations CPIA Country Policy and FCV Fragility, Conflict and Institutional Assessment Violence CPL Concessional Partner Loan FPNs Forest Policy Notes CPR Country Performance Rating FY Fiscal Year CPSD Country Private Sector G&I Global & Institutional Diagnostic GBV Gender-based Violence CRI Corporate Results Indicator GCF Green Climate Fund CRRF Comprehensive Refugee GDP Gross Domestic Product Response Framework GEF Global Environment Facility CRW Crisis Response Window GEIDCO Global Energy CSC Corporate Scorecard Interconnection Development CSIPs Climate-smart Agriculture and Cooperation Organization Investment Plans GFAR Global Forum on Asset CSO Civil Society Organization Recovery DaLA Damage and Loss Assessment GHG Greenhouse Gas DFi Development Finance Vice- GICA Global Infrastructure Presidency Connectivity Alliance GIHUB Global Infrastructure Hub MAPS2 Methodology for Assessing GNI Gross National Income Procurement Systems 2 GP Global Practice MDB Multilateral Development GPG Global Public Goods Bank GRM Grievance Redress MDRI Multilateral Debt Relief Mechanism Initiative GSURR Social, Urban, Rural and MFD Maximizing Finance for Resilience Global Practice Development GVC Global Value Chain MICs Middle-income Countries GW Gigawatt MIGA Multilateral Investment HD Human Development Guarantee Agency HIPC Heavily Indebted Poor MNA Middle East and North Africa Countries region HNP Health, Nutrition and MPA Multiphase Programmatic Population Approach IADB InterAmerican Development MTR Mid-Term Review Bank NCBP Non-Concessional Borrowing IBRD International Bank for Policy Reconstruction and (I)NDCs (Intended) Nationally Development Determined Contributions ICR Implementation Completion NDCP NDC Partnership and Results Reports NGO Non-Governmental ICRC International Committee of Organization the Red Cross ODA Official Development ICT Information and Assistance Communications Technology OECD Organisation for Economic IDA International Development Co-operation and Association Development IDFC International Development OGP Open Government Finance Club Partnership IDPs Internally Displaced Persons OP Operational Policy IEG Independent Evaluation PA Project Advance Group PAs Programmatic Approaches IFC International Finance PACG Pre-arrears Clearance Grants Corporation PAD Project Appraisal Document IFFs Illicit Financial Flows PBA Performance-Based IFI International Financial Allocation Institution PCPI Post-Conflict Performance ILO International Labor Indicators Organization PCT Platform for Collaboration on IMF International Monetary Fund Tax IoC Instruments of Commitment PEF Pandemic Emergency IPF Investment Project Financing Financing Facility ISR Implementation Status and PEFA Public Expenditure and Results Financial Accountability IYF International Youth PER Public Expenditure Reviews Foundation PforR Program for Results JET Jobs and Economic PIU Project Implementation Unit Transformation PPF Project Preparation Facility LICs Low-income Countries PPP Public-Private Partnerships M&E Monitoring and Evaluation PPR Portfolio Performance Rating PPSD Project Procurement Strategy SDR Special Drawing Right for Development SME Small and Medium Enterprise PSW Private Sector Window SOE State-Owned Enterprise RETF Recipient-Executed Trust StAR Stolen Asset Recovery Fund Initiative RMR Risk Mitigation Regime SUF Scale-up Facility RMS Results Measurement System TA Technical Assistance RPBA Recovery and Peacebuilding TAR Turn-around Regime Assessments UFGE Umbrella Facility for Gender RRA Risk and Resilience Equality Assessment UN United Nations RSW Refugee Sub-Window UNCTAD United Nations Conference SAP Systems, Applications and on Trade and Development Products in Data Processing UNICEF United Nations Children's SAR South Asia Region Fund SADC Southern African UNODC United Nations Office on Development Community Drugs and Crime SCD Systematic Country WBG World Bank Group Diagnostic WHO World Health Organization SD Sustainable Development WDR World Development Report SDGs Sustainable Development YBI Youth Business International Goals TABLE OF CONTENTS EXECUTIVE SUMMARY................................................................................................................... i I. INTRODUCTION AND CONTEXT: TRANSFORMING DEVELOPMENT FINANCE ............................................................................................................................................. 1 II. REPLENISHMENT REVIEW: MAKING IDA18 HAPPEN ............................................. 8 A. DELIVERING IDA18: IMPLEMENTATION AND PORTFOLIO TO DATE ............................................. 9 B. MEETING POLICY COMMITMENTS: PERFORMANCE ACROSS IDA18 SPECIAL THEMES .............. 18 C. ACHIEVING RESULTS: IDA RMS AND IMPACT OVER TIME ....................................................... 23 D. ENHANCING OPERATIONAL SUPPORT: EFFECTIVE IMPLEMENTATION CAPACITY ....................... 30 E. BUILDING ON SYNERGIES: PARTNERSHIPS AND COLLABORATION ............................................. 35 F. MANAGING IDA18’S NEW FINANCING FRAMEWORK: SUSTAINABLE OPTIMIZATION ................ 37 III. ISSUES FOR CONSIDERATION: MANAGING IDA RESOURCES FOR GREATEST IMPACT ............................................................................................................................................. 39 LIST OF ANNEXES Annex 1: IDA18 Portfolio to Date – Key Statistics .................................................................................... 46 Annex 2: IDA18 Windows ......................................................................................................................... 48 Annex 3: Status of IDA18 Policy Commitments and Monitorable Actions ............................................... 50 Annex 4: IDA18 Results Measurement System (RMS) ............................................................................. 67 Annex 5: WBG and IDA Partnerships ........................................................................................................ 83 LIST OF BOXES, FIGURES AND TABLES Boxes Box 1. Doing Things Differently – IDA18 Innovations and Transformations ............................................. 2 Box 2. IDA18 RMS Enhancements ............................................................................................................ 24 Box 3. Expanded Use of Project Preparation Facility (PPF) Helps Strengthen Implementation Capacity in IDA Countries, Particularly in Africa ......................................................................................................... 31 Box 4. Simplification of IDA Windows/Regimes ...................................................................................... 35 Box 5. WBG and UN Signed a Strategic Partnership Framework ............................................................. 36 Figures Figure 1. WBG IDA Value Proposition ........................................................................................................ 8 Figure 2. Regional Share of IDA18 Commitments in the First Five Quarters.............................................. 9 Figure 3. IDA Commitments by Sectors ..................................................................................................... 10 Figure 4. Breakdown of IDA18 Instruments .............................................................................................. 11 Figure 5. IDA17 and IDA18 (Q1-Q5) Commitments to FCS/FCV and Small States ................................ 12 Figure 6. Regional Share of Grant Commitments ....................................................................................... 12 Figure 7. IDA Gross Disbursements ........................................................................................................... 13 Figure 8. IDA IPF Disbursement Ratio ...................................................................................................... 13 Figure 9. Recipient Executed Trust Funds, IDA16-18 ............................................................................... 37 Tables Table 1. IDA18 Mid-Term Review Issues for Consideration ...................................................................... iv Table 2. IDA18 Windows Indicative Allocations ....................................................................................... 14 Table 3. Principles for Flexibility in Managing IDA Resource Allocations ............................................... 41 Table 4. Indicative Ranges for Proposed IDA18 Reallocations across IDA Windows/Regimes ............... 43 Table 5. Overview of Requested IDA18 MTR Guidance ........................................................................... 45 EXECUTIVE SUMMARY i. The IDA18 replenishment is one of the most concrete multilateral responses to our collective 2030 aspirations and needs. With a US$75 billion envelope, ambitious policy commitments, new instruments and transformative financial model, IDA18 represents a landmark replenishment poised to help advance the international community’s “2030 Agenda” spelled out in the Sustainable Development Goals (SDGs) and other major multilateral agreements to address the most pressing development challenges of today. Building on IDA’s global leadership and proven partnerships, the scale and innovation of its eighteenth replenishment equips countries with the needed resources and tools to make progress on this daunting agenda. ii. Recent major breakthroughs were achieved, boosting the strategic relevance, scale and impact of World Bank Group (WBG) funding: (i) at the Spring Meetings, the Development Committee welcomed the successful conclusion of the negotiations on a Capital Package which includes a US$13 billion paid-in capital increase, consisting of US$7.5 billion for IBRD and US$5.5 billion for IFC, and significantly enhances WBG capacity, including to support IDA countries; (ii) the successful introduction of IDA to capital markets, with the historic issuance of IDA’s first bond in April, adds an important new funding channel for the world’s poorest countries; and (iii) the strong delivery of early IDA18 is reflected both in terms of record lending and solid progress in delivering policy commitments. • The capital package is a strong complement to IDA18. First, it made permanent the IDA18 formula for IBRD transfers to IDA, enabling cumulative transfers estimated at US$7-8 billion over FY20-30. Second, IBRD will prioritize support to IDA graduates and new Blends, aiming to make available resources to replace 100 percent of IDA financing for IDA graduates, thus avoiding financial cliffs for countries as they move from IDA to IBRD and helping IDA focus its resources on the remaining poorest and weakest IDA countries. Third, Blends and IDA graduates will be exempted (for six years after graduation) from the price increase that is part of the capital package. And finally, IFC also aims to expand commitments in IDA and Fragile and Conflict-Affected Situations (FCS) countries, reaching up to 40 percent of all IFC commitments by 2030 and an average of 32.5 percent over FY19-30. The strong capital package commitments on global public goods engagement closely align with and provide support to IDA priorities, including countries affected by fragility, conflict and violence (FCV), crisis management, climate, gender, and regional integration. • IDA’s financial position remains strong. With its triple-A rating, IDA’s inaugural bond issuance in April – the first in the institution’s nearly 60-year history – was a resounding success: 4.5 times oversubscribed, raising US$1.5 billion, and priced at par with IBRD. This transformation will significantly scale up IDA’s financing to its client countries. As the most decisive step towards the Financing for Development Goals and Maximizing Finance for Development (MFD) mobilization, IDA’s new financing model responds to shareholders’ calls for enhanced financial optimization and significantly expands the institution’s value for money. Every dollar of IDA18 partner contributions helps generate three dollars in IDA18 commitment authority, up from a ratio of 1-to-2 in IDA17. - ii - • Early delivery of the transformational IDA18 has been robust. Implementation to date is strong and delivering on IDA18’s innovations and ambitions. FY18 commitments have delivered close to US$27 billion in the first five quarters of IDA18 and are expected to reach US$30 billion by the IDA18 MTR, setting a new record for the first half of an IDA replenishment cycle. Management and operational teams increased their focus on IDA18 priorities such as FCV, delivering IDA support in new and innovative ways, and mobilizing private investment to the most difficult markets in line with the WBG’s MFD approach. iii. IDA18 implementation demonstrates the WBG’s leadership on transforming development finance – making contributions from partners to IDA and the WBG a sound and effective investment. Key milestones have been achieved and overall progress towards IDA18 commitments and results is, for the most part, on track: • The main thrust and policy commitments of IDA18 are being delivered and translated at country and regional levels. IDA’s holistic approach enables work across the Special Themes e.g., promoting job creation for both men and women in fragile situations. Early IDA18 implementation has seen robust progress across the 46 policy commitments – with more than three-quarters of commitments solidly on track for delivery, including some already delivered. • Special attention is being paid to challenges to realize key objectives and sustain progress. Management is monitoring specific policy commitments closely to identify course corrections where needed and step up progress on commitments that are important priorities, prove more challenging to meet, or require focus to accelerate delivery. In addition, heightened attention and support is placed on helping teams and countries strengthen capacity to deal with debt sustainability challenges. The WBG is also taking steps to enhance its work in and resources for intensified FCV engagements, addressing rural poverty, and supporting small states. • The institution is strengthening partnerships and enhancing operational policies and staffing. The WBG relationship with the United Nations is particularly important and recently enhanced through the signing of the WBG-UN Strategic Partnership Framework. On the operational side, the Project Preparation Facility (PPF) has been expanded and enhanced; the new Multiphase Programmatic Approach (MPA) adds important operational flexibility; and efforts continue to make internal processes more agile. Internal partnerships have been strengthened under IDA’s new IFC-MIGA Private Sector Window (PSW), which has introduced a governance process clearly intended to advance WBG synergies. Good progress has been made in strengthening the Employment Value Proposition (EVP) for staff working in and on FCV, but more is needed to enhance the Bank’s staffing footprint for IDA countries across the spectrum of fragility. • IDA’s Results Measurement System (RMS) remains a robust accountability and strategic management tool. Significant results were achieved by IDA-supported projects during FY18 in key sectors including health, agriculture, infrastructure, education, social protection, financial inclusion and energy. IEG ratings for development outcomes in IDA operations remained high and feedback from IDA clients positive. Integration of beneficiary feedback mechanisms into the design of IDA projects has become nearly universal. Outcome ratings for country strategies and monitoring and evaluation (M&E) of - iii - operations, however, are areas that require further strengthening. The Bank is renewing its focus on client support and implementation, particularly for FCV, through new initiatives including embedding risk into portfolio management, enhancing management attention during supervision, and improving program-level effectiveness. • Key innovations under IDA18 allow IDA to do things differently. First, IDA has significantly scaled up its financial and operational commitments in countries affected by fragility, while building a more comprehensive approach and allowing greater focus on prevention. Second, as part of the overall WBG MFD efforts to leverage private sector resources, IDA expanded its collaboration with IFC/MIGA through the PSW. Third, IDA18 saw the introduction of new ways to tackle growing development challenges, including crisis preparedness and response, conflict-risk mitigation, and refugees. And fourth, this was enabled by the introduction of IDA’s new integrated financial model built upon donor contributions, which allowed to achieve greater financial leverage and optimization. iv. Deploying funds where they are needed the most and can be the most effective is critical to ensure sustained, successful impact for our clients. IDA18 implementation to date confirms IDA’s effective model for delivering finance at scale. Experience indicates there are several areas where the level of resources allocated for IDA18 may be under-utilized. At the same time, there are other areas showing capacity to absorb additional resources. With the urgency of the SDGs, the opportunity cost of having valuable development resources sitting idle for the rest of IDA18 is too high. v. Management therefore proposes to enhance existing flexibility in managing IDA resource allocations, while assuring the sustained integrity of and alignment with agreed priorities and established policies. Management commitments to IDA Partners, as well as both operational and financial parameters, serve as critically important and firm guideposts to IDA implementation. Yet, greater flexibility is required to increase IDA’s impact, as its architecture and tools have grown in scope and complexity. Going forward, Management seeks endorsement to re-allocate IDA resources throughout a replenishment and across IDA windows (core and non- core), guided by a systematic framework consistent with intended funding purposes. Proposed principles for this approach would be to: optimize the use of IDA commitment authority; keep the overall balance of IDA allocations broadly intact; uphold existing IDA allocation rules; and broadly maintain IDA’s general financial directions. For the remainder of IDA18, this paper proposes some indicative ranges for reallocations. All necessary approvals would be sought with the IDA Board of Executive Directors. vi. This paper reports on implementation of IDA18 to date, identifies emerging challenges and lessons learned, and summarizes proposed mid-course corrections. The details of implementation related to the IDA18 Special Themes, its Windows for dedicated financing, and Financial Framework are provided in accompanying papers. This expansive collection of lessons learned in early IDA18 – combined with the ever-pressing development agenda faced by our clients – will inform the consideration of IDA19’s strategic directions. Table i below provides a tool for readers to identify the key issues for discussion and decision at the IDA18 MTR, and where to find relevant background material, organized by allocations, IDA windows, and cross- cutting issues. - iv - Table 1. IDA18 Mid-Term Review Issues for Consideration Decisions/Endorsement sought now* Feedback to inform future consultations Allocation management Chapeau Paper, Regional Integration Regional Program • Flexibility to include non-core resources Paras 99-107 • Expand instruments for Regional Program: Paper, Paras 43-5 DPOs/PforRs • Clarify support to regional entities through Regional Program and SUF SUF Paper, Para 31 Yemen CRW FCV Paper, Paras CRW Paper, Para 48 • Special allocation • Earlier response capacity 65-68 and Annex 2 Syria Graduation FCV Paper, Paras Graduation Paper, • Re-allocate some of the US$1 billion that had been • Prospects for Graduation in IDA19 84-86 notionally set aside under TAR • Access to Regional Program and CRW for • Paras 84-88 recent Graduates and Small States under certain limited conditions • Paras 69 and 82 • Shift lending terms for Small States once they reach a certain level of development • Para 83 Graduation / Transition support Graduation Paper, • Phase out Transition Support • Para 70 • Retain cap on large Blend countries • Paras 71-2 • Continue suspension of acceleration clause • Paras 73-7 • Revise Small Island exception • Paras 78-81 Refugee Sub-Window FCV Paper, Paras • Update 100% grant exemption 90-93 • Increase size of window • Increase the maximum country allocation from US$400 million to US$500 million PSW PSW Paper, Paras • Delegate authority for programmatic approach 50-1 Portfolio efficiency Chapeau Paper, • IDA Graduates to recommit undisbursed balances Para 24 (on blend terms) *Where necessary, Board approval on above proposals will be sought immediately after the MTR . I. INTRODUCTION AND CONTEXT: TRANSFORMING DEVELOPMENT FINANCE The IDA18 replenishment package 1. IDA plays a key role in the global development landscape, with the agreed IDA18 framework as one of the most concrete multi-lateral responses to 2030 aspirations and needs. With a US$75 billion envelope, ambitious policy commitments, new instruments and transformative financial model, IDA18 represents a landmark replenishment1 poised to help advance the international community’s “2030 Agenda” spelled out in the Sustainable Development Goals (SDGs) and other major agreements such as the COP Climate Change agenda, the Sendai Framework for Disaster Risk Reduction, the Addis Ababa Action Agenda on Financing for Development, and the Busan Partnership for Effective Development Co-operation. Building on IDA’s global leadership and proven partnerships, the scale and innovation of its eighteenth replenishment equips countries with the needed resources and tools to make progress on this challenging agenda (see Box 1 on key IDA18 innovations and transformations). 2. IDA18 supports clients in achieving and protecting their development goals amidst intense vulnerabilities and crises. Responding to heightened global ambitions and escalating risks around the globe, IDA18 represents a bold paradigm shift in how to mobilize resources and invest in development. As the largest replenishment in IDA’s nearly 60-year history, IDA18 heralds a significant step change in the institution’s policy and financing framework to implement the IDA18 overarching theme of investing in growth, resilience and opportunity for the world’s poorest countries. With IDA clients facing a myriad of complex and interrelated challenges, the innovative approaches of IDA18 help advance five agreed Special Themes to: • address the challenges of Fragility, Conflict and Violence; • respond to the threats of Climate Change; • advance Gender and Development goals; • support Jobs and Economic Transformation; and • pursue principles of good Governance and Institutions. 3. Key objectives towards these goals have been agreed with IDA partners in the comprehensive list of monitorable actions (IDA18 Policy Commitments), and overall progress is closely monitored through the IDA Results Measurement System (RMS). This report takes stock of implementation across the 46 policy commitments of IDA18 and reviews the status of the RMS – to give a sense of where IDA18 implementation stands overall. Individual MTR papers on IDA18 windows, Special Themes and other background notes on key issues provide supporting details on IDA18 and are referenced where applicable throughout this chapeau paper. 1 See IDA18 Deputies Report “Additions to IDA Resources: Eighteenth Replenishment. IDA18: Towards 2030 – Investing in Growth, Resilience and Opportunity.” Report from the Executive Directors of the International Development Association to the Board of Governors. World Bank, Washington, D.C., January 2017. -2- Box 1. Doing Things Differently – IDA18 Innovations and Transformations IDA18 introduced important new approaches – through its comprehensive policy agenda, expanded suite of instruments, and enhanced financial management. In the last year, IDA18 innovations have started to demonstrate their major transformational potential: going beyond business as usual, ensuring strong delivery, strengthening partnerships, and significantly helping scale up resources to leverage greater impact. Key IDA18 transformations include: • Scaling up engagements in countries affected by fragility as well as small states, while building a more comprehensive approach to addressing fragility to include more focus on prevention. Significant increase in financial support – doubling allocations for FCS in aggregate, almost quadrupling small state financing, and establishing the Refugee Sub-Window within the Regional Program to provide a dedicated source of funding for host governments to support the integration of both refugees and their host communities; • Achieving greater financial leverage and optimization. Through the paradigm shift of introducing a new hybrid financial model with exceptional value: successfully launched in April, capital market access provides significant increase in IDA18 commitment authority of about US$22 billion – allowing every dollar of donor contributions to mobilize three dollars for client countries (instead of two dollars under IDA17); • Enhancing WBG collaboration and private sector leverage, particularly in fragile environments. As part of the MFD effort, creation of the new Private Sector Window (PSW) to mobilize increased private sector investment in IDA countries, especially FCS, through unprecedented collaboration among IDA, IFC and MIGA to scale up their work in the most challenging markets; • Recognizing the need to introduce additional focus on key development challenges. Introduction of the two new Special Themes on “Jobs and Economic Transformation” as well as “Governance and Institutions” – to spur growth and competitiveness, and strengthen capacities for good governance and domestic resource mobilization; • Expanding instruments available for crisis preparedness and response. Scaling up financing under the Crisis Response Window (CRW) and introducing a new Catastrophe Deferred Draw-Down Option (CAT- DDO) for IDA countries in response to the demand for contingent financing mechanisms; • Strengthening operational effectiveness and support – with particular focus on managing engagements through a more selective and consolidated, risk-based approach. Following the expansion and enhancement of the Project Preparation Facility (PPF), usage has nearly doubled – with increasing use of single Project Advances to support multiple operations and exceptional demand from Africa and East Asia regions. The new Multiphase Programmatic Approach (MPA), approved by the Board in July 2017, adds important operational flexibility to allow IDA to support Bank clients in structuring a long, large, or complex engagement as a set of smaller linked operations. Important external trends and developments 4. Recent developments affirm the essence of the IDA18 framework – and call for maintaining a strong IDA with clear strategic directions for IDA19. Increases in the level of public debt in many IDA countries is a concern that requires attention. Growing refugee and mass- displacement challenges across regions confirm the urgency of scaling up FCV funding and implementing tools such as the IDA Refugee Sub Window, in close coordination with others. Increasingly constrained and complex development assistance trends reinforce the need for greater coordination and mobilization. The IBRD/IFC capital package agreed this Spring, together with the MFD approach, IDA18 financial leverage and new tools like the IDA18 PSW, confirm the significance of WBG leadership and innovation in development finance – responding to scaled up demand across the client spectrum and donors’ call for continued optimization. The institution’s -3- strategic focus and new initiatives provide a framework to prioritize our development engagements and programs across the WBG and the IDA policy agenda. 5. Fragility continues to be one of the most pressing challenges to sustainable poverty While the number of people living in extreme reduction – with migration and refugee crises poverty around the world continues to decline, exacerbating the threat. The share of global the pace of progress is slowing, with poverty poor living in FCV contexts is expected to increasingly concentrated in Sub-Saharan increase significantly, violent conflicts are on the Africa and conflict-affected countries. The rise, and there are record numbers of forcibly world is not on track to meet the goal of ending displaced peoples: reinforcing the urgency of extreme poverty by 2030 (Poverty and Shared tackling these issues. More countries experience Prosperity Report: Piecing Together the Poverty violent conflict than at any time in nearly three Puzzle, World Bank Group. September 2018). decades. By the end of 2017, almost 70 million people were forcibly displaced worldwide – an increase of close to 3 million in just one year. 2018 remains a year of tensions, conflicts and crises, including the massive refugee exodus of Rohingya fleeing from Myanmar into Bangladesh; the war in Yemen escalating into one of the world’s worst humanitarian crises with eight million people on the brink of famine; and states across the Sahel region struggling with intercommunal conflict, jihadi violence and fighting over smuggling routes. All of these and many more conflict areas – together with the spill-over impact they have across the world – show that FCV remains a key obstacle to achieving the SDGs. 6. In addition, without inclusive and climate-informed development efforts and sustained focus on resilience building, climate-related shocks and stresses could erode development gains in IDA countries. The IPCC 1.5 Degree Report2 calls for accelerated actions with climate-related risks to health, livelihoods, food security, water supply, human security, and economic growth projected to increase significantly with global warming. Maintaining a 1.5° Celsius world could reduce the number of people both exposed to climate-related risks and susceptible to poverty by up to several hundred million by 2050 compared with 2° Celsius – but will require systematic transformations and resilience-building: with investments, reforms, technological advances and behavioral changes at a scale not seen before, and with a window of opportunity closing rapidly. Increased negative impacts particularly affect the world’s poorest and most vulnerable regions, as these tend to have high exposure and sensitivity to climate impacts, while also exhibiting low adaptive capacity to buffer their economies and communities from climate and disaster risks. According to the Shock Waves report, climate-related shocks could result in more than 100 million additional people living in poverty by 2030.3 Climate change will also act as a threat multiplier, exacerbating natural resource scarcity in certain areas. Water scarcity could cost some regions up to 6 percent of their GDP, spur migration, and spark conflict.4 Climate migration is increasingly emerging as the human face of climate change. According to the Bank’s 2 Intergovernmental Panel on Climate Change (IPCC), 2018. Global Warming of 1.5° Celsius. http://www.ipcc.ch/report/sr15/ 3 World Bank. 2016. Shock Waves: Managing the Impacts of Climate Change on Poverty. https://openknowledge.worldbank.org/handle/10986/22787 4 World Bank. 2016. High and Dry: Climate Change, Water, and the Economy. http://documents.worldbank.org/curated/en/862571468196731247/High-and-dry-climate-change-water-and-the-economy -4- Groundswell report, worsening climate impacts could drive over 140 million people to migrate within their countries in just three regions – Sub-Saharan Africa, South Asia, and Latin America – unless urgent climate and development action is taken.5 7. Debt risks are increasing in Low-Income Countries (LICs). 33 IDA clients (49 percent of 68 IDA countries classified under the joint Bank-Fund LIC Debt Sustainability Framework, LIC DSF) are currently at high risk of external debt distress or in debt distress – 13 of which are small states.6 For countries classified as fragile and conflict-affected, 18 out of 31 countries that are assessed under the LIC DSF are at high risk of debt distress or are in debt distress. Debt indicators in certain IDA countries have been deteriorating after 2013, reversing the highly favorable post-Multilateral Debt Relief Initiative (MDRI) trend. Increased indebtedness poses risks to development outcomes including countries’ progress on poverty reduction, shared prosperity and the SDGs. It also raises longer-term issues for IDA’s ability to tailor the terms of its support to clients – requiring close attention to continued policy dialogue and capacity building with clients on debt management, data and reporting, appropriate use of IDA’s toolkit of funding mechanisms and instruments, and sustained attention and coordination with external partners – particularly in the most fragile and vulnerable country environments. 8. The volume and composition of Official Development Aid (ODA) has changed significantly. The new era of global development finance is characterized by slowing ODA flows to poor countries, emergence of new players and platforms that compete for development funds from the same set of donors and have resulted in earmarking of ODA funds to specific themes, sectors, and countries – all contributing to growing fragmentation of aid efforts. Official flows to middle and low-income countries now account for less than 10 percent of development financing flows,7 a reduction from 50 percent in 1990. And while the number of donor-funded activities has increased, the financial size of such aid commitments has gone down. Humanitarian assistance is the fastest growing component of ODA, reaching almost US$21 billion (or 13 percent of ODA) by 2016 from just US$3.2 billion in 2000. Responses to address global public goods and challenges have also fueled the emergence of multi-donor vertical funds. The World Bank now provides trustee services to 26 active financial intermediary funds that cover topics such as agriculture and food security; education; debt relief; environment and climate change; health infrastructure; natural disasters; fragility, conflict, and violence; and gender—in all resulting in US$21 billion in funds held in trust in 2017.8 Concerted WBG response, vision and value proposition 9. The IBRD/IFC capital package endorsed by shareholders at the Spring Meetings ensures strong contributions towards the 2030 agenda throughout the WBG, building on a 5 World Bank. 2018. Groundswell: Preparing for Internal Climate Migration. https://openknowledge.worldbank.org/handle/10986/29461 6 See Annual Meetings and IDA18 MTR background note on Debt Vulnerabilities in IDA Countries. 7 Net financial flows comprised of: private flows (foreign direct investments, portfolio investments, and long-term debt), worker remittances, and official flows which include official development assistance (ODA), and long-term debt. 8 2017 Trust Fund Annual Report. -5- number of innovations pioneered by IDA.9 Affirming the importance of multilateralism and complementing IDA18, the US$13 billion capital increase enables the WBG to support the development challenges of a growing number of Middle Income Countries (MICs), deploy private sector solutions at scale in both MICs and LICs, as well as deliver on the global public goods (GPG) agenda. The transformative package of capital measures and integrated policy reforms for both IBRD and IFC10 assures that all parts of the WBG are operationally fit for purpose and have the financial capacity to help advance the sustainable development agenda. It aims to increase the effectiveness and collaboration of WBG operations, including through mutual leveraging of the delivery channels of all of its institutions – transforming how the WBG enhances, calibrates and delivers development services across its diverse membership. A stronger WBG means a stronger IDA, both in terms of capital market access but also for future replenishments. Specifically, the package positively impacts IDA countries in a number of ways: • IDA countries will directly benefit from the capital package: By making permanent the IDA18 formula for IBRD transfers to IDA, IBRD transfers to IDA will increase to an estimated US$7-8 billion over FY20-30. By the mid-2020's, IBRD would be one of the five largest donors to IDA. Over FY19-30, IFC aims to expand commitments in IDA and FCS countries and reach up to 40 percent of all IFC commitments by 2030 and an average of 32.5 percent over FY19-30, with a share in IDA and IDA FCS countries of 15-18 percent and 15-20 percent by 2026 and 2030 respectively.11 • IDA will also benefit indirectly from the capital package: IBRD aims to make available IBRD resources to fully replace the IDA financing for new Blends and IDA graduates – to avoid any financial cliffs for countries as they move from IDA to IBRD. In addition, Blends and IDA graduates will be exempted (for six years after graduation) from the price increase of the capital package. Strengthening support to IBRD countries will also create regional spill over benefits for neighboring IDA countries. • GPG support and policy commitments of the capital package are particularly relevant for IDA priorities vis-à-vis FCV and crisis management, climate, gender, regional integration and mobilizing private investment through MFD: It will help IBRD deliver climate co-benefits averaging at least 30 percent over FY20-23, with this ambition maintained or increasing to FY30, while IFC aims to grow the share of its climate investments, including mitigation and adaptation, to 35 percent by 2030; support continued implementation of the gender action plan, with at least 55 percent of IBRD operations contributing to narrowing the gender gap by FY23; enable IFC to quadruple the amount of annual financing dedicated to women and women-led small and medium enterprises by 2030; help increase financing to FCS countries and focus on crisis prevention; strengthen responses to national, regional and global crises, as well as support additional efforts to prevent escalation of FCV situations and their spillovers. 9 Adopted by IBRD shareholders on October 1, 2018. 10 See World Bank Group. 2018. “Sustainable Financing for Sustainable Development: World Bank Group Capital Package Proposal.” Washington, D.C. 11 For this commitment, IDA countries are those eligible for IDA financing as of July 1, 2016, including Blend and Gap countries as per prior commitments listed in Board document “IFC/R2016-0326/1” titled “A revised Approach to IFC designations” of November 2016; FCS list may vary over time. -6- 10. The WBG’s institutional leadership, organizational focus and strategic initiatives provide a guiding framework to scale up and prioritize engagements with greatest impact across the client spectrum: • The Forward Look: A Vision for the World Bank Group in 2030, endorsed by the Development Committee in 2016, lays out how the institution – as one, better and stronger WBG – will deliver on the Twin Goals and its three priorities of accelerating sustainable and inclusive growth, investing in human capital, and strengthening resilience to support the 2030 development agenda and SDGs. Progress on its four pillars: (i) serving all clients; (ii) creating markets, (iii) leading on global issues; and (iv) improving the business model helps guide program design and priorities across the institution.12 • The WBG focus on flagship initiatives – such as the Human Capital Project and Index, or efforts associated with harnessing Disruptive Technologies13 – can significantly enhance the impact of WBG engagement: recognizing the centrality and transformative potential of development interventions that can help end extreme poverty and build shared prosperity for all. Building demand for more and better investments in people, helping countries strengthen their human capital strategies and investments, and improving how we measure human capital will be an essential leap for both the human and economic development agenda. Important commitments to accelerate global action for disability-inclusive development were recently announced at the Global Disability Summit in July 2018. Investing in human capital and updating social protection systems in response to technological advancement are subjects of the new World Development Report 2019 on the Changing Nature of Work.14 • Maximizing Finance for Development (MFD) – the WBG’s approach to systematically leverage all sources of finance, expertise, and solutions for both IBRD and IDA clients – drives the creation of new instruments and tools, such as the IDA18 PSW, to help crowd in private sector investments, bolster scarce public resources, and support countries’ growth trajectory. The MFD framework functions as a guiding principle for WBG operations, and a tool to catalyze private sector capital to generate the trillions of investments that are needed to meet the SDGs. Crowding in all possible funding and innovation, IBRD, IDA, IFC and MIGA work in concert with public and private sector partners to meet this challenge by improving the enabling environment, developing regulatory conditions, building capacity, putting in place standards, financing a first mover or innovator, and reducing risks.15 o The MFD effort is helping establish the incentive environment to mobilize greater private investment to support the Jobs and Economic Transformation (JET) agenda in IDA countries. The WBG is rapidly mainstreaming the MFD approach across operations, in line with objectives of the Forward Look. Among the nine MFD pilot countries are four IDA countries – Cameroon, Côte d’Ivoire, Kenya, and Nepal. 12 See Forward Look Implementation Update, World Bank Group, September 2018. 13 See 2018 Annual Meeting background papers prepared for the Development Committee on “Human Capital: A project for the world” and “Disruptive Technologies: Creating opportunities – mitigating risks” 14 See World Development Report 2019: The Changing Nature of Work. 15 See Maximizing Finance for Development: Leveraging the Private Sector for Growth and Sustainable Development. Development Committee paper. September 19, 2017. -7- Successful MFD operations have also been implemented in Afghanistan, Bangladesh, Benin, Madagascar, and the Solomon Islands. These interventions have included support for development of agricultural value chains and improvements in access and quality of critical connective infrastructure (including electricity and water). o Requisite complementary efforts to mobilize finance from all sources, including domestic public finance and the private sector, also require partnership with all stakeholders. For example, the WBG-IMF-OECD-UN joint Platform for Collaboration on Tax aims to mobilize domestic resources through policy dialogue, technical assistance, capacity building, knowledge creation, and input into the design and implementation of standards for international tax matters. The WBG is a signatory to the MDB’s G20 Hamburg declaration to maximize finance for development, leveraging scare public resources to mobilize private investment towards the SDGs. 11. As part of the WBG, IDA’s unique policy mandate and value proposition provides a critical platform for addressing the key challenges and opportunities faced by IDA countries. The historic replenishment of IDA18 confirmed the value of IDA to its clients. It provides a critical platform to address key global challenges at scale across countries and sectors. It is uniquely positioned to help countries realize the 2030 agenda, tackle key challenges facing them, and benefit from its wide-ranging expertise and instruments. IDA has an unmatched ability to help the world address complex problems at global, regional and country levels. This capacity is rooted in a number of important and interconnected attributes (see Figure 1). 12. This report takes stock of IDA18 implementation at nearly its mid-point. It focuses on progress to date vis-à-vis the transformative nature of the replenishment, doing things differently, delivering the agreed agenda, and identifying emerging lessons and needs for adjustment. • Section II.A takes stock of IDA18 Operations and use of windows and regimes; • Section II.B reviews implementation of IDA18 Special Themes and Policy Commitments; • Section II.C provides highlights from the IDA RMS and emerging results; • Section II.D documents progress on enhancing operational support and capacity; • Section II.E discusses key partnerships and collaborations; • Section II.F summarizes introduction of the new hybrid financial model and latest thinking on continued optimization; and • Section III notes issues and proposals for discussion, including enhanced flexibility to optimally manage IDA resource allocations – to ensure continued success and maximum effectiveness in delivering IDA ambitions by the summer of 2020, and beyond. -8- Figure 1. WBG IDA Value Proposition Strong monitoring and evaluation culture, with Leadership on innovation & demonstrated transformation results and impact Strong financial Proven efficiency and cost effectiveness for greatest capacity and value for money leverage to maximize finance for development Convening power and agenda setting with Global country leadership on Global presence Public Goods Donor coordination and WBG synergies Partnerships and collaboration Multi-sectoral expertise and thematic engagement II. REPLENISHMENT REVIEW: MAKING IDA18 HAPPEN 13. Management has made significant progress in developing IDA18’s expanded range of priorities and tools to support clients. The scale, complexity, and novelty of IDA18 instruments and innovations required significant upfront investment of time and coordination at the outset of IDA18. Major achievements have already been made. The new PSW and Refugee Sub-Window are fully operational and seeing substantial demand. Regional projects and the SUF are piloting new, transformational approaches. Implementation of IDA’s new hybrid financing model is proceeding successfully, and options for further optimization are being explored. 14. Management is focused on facilitating continued scale up and impact. The portfolio has seen record lending and delivery pace is accelerating in challenging areas, such as FCV and Small States, in close collaboration across the WBG and with partners. Management is simplifying processes and making them more agile. Management has also identified re-allocation opportunities for maximum use and impact of IDA resources within the replenishment cycle. -9- A. DELIVERING IDA18: IMPLEMENTATION AND PORTFOLIO TO DATE IDA lending commitments 15. Delivery of IDA18 lending to date has been robust. Financing to clients has been strong, and Management is placing special attention on client segments (FCV, small states) that are more challenging to implement to accelerate delivery pace. 16. IDA commitments set a new record, amounting to US$26.9 billion in the first five quarters of the replenishment, and expected to exceed US$30 billion by the time of the mid- term review (MTR). This represents a 26 percent increase compared to the same period of IDA17, which had similarly set a new record. The poorest countries continue to receive the vast majority of IDA financing: IDA-only countries accounted for 63 percent of IDA18 commitments, totaling US$16.8 billion, while IBRD/IDA blend countries received US$7.5 billion or 28 percent and Gap countries received US$2 billion or seven percent. Transitional support for IDA18 graduates and financing for regional institutions accounted for the remaining one percent each. 17. IDA18 financing is supporting a diverse client base. Among regions, the Africa region (AFR) accounted for the largest share of IDA commitments (65 percent), a considerable increase compared to the same period of IDA17, followed by the South Asia region (SAR), with 25 percent of total IDA18 commitments during the first five quarters (Figure 2). All regions but East Asia (EAP) saw an increase in total IDA commitments in IDA18 when compared to the same period in IDA17, including the Middle East and North Africa region (MNA) where financing doubled responding to the crisis in Yemen. 24 percent of total IDA commitments went to FCS/FCV countries (US$6.5 billion). See Annex 1 for further portfolio details. Figure 2. Regional Share of IDA18 Commitments in the First Five Quarters 18. Demand from clients for IDA’s support spans a wide range of sectors. While there is volatility in annual data and focus on key support emerges throughout the replenishment, the largest amount of the first four quarters of IDA18 (FY18) funding has gone to infrastructure sectors with US$8.0 billion or 33 percent of total IDA commitments, with a focus on energy and - 10 - extractives. Another 29 percent went to social sectors (US$7.0 billion), with an increase in projects covering education. FY18 support to public administration has significantly increased, close to doubling compared to FY15. IDA’s support in agriculture saw a dip in FY18, partly explained by several significant operations slipping into FY19 and by the fact that increasing lending for the “agricultural markets” sub-sector is reported under the Industry and Trade Sector, including climate-relevant and agribusiness opportunities (see Figure 3 and Annex 1 for full overview). Figure 3. IDA Commitments by Sectors (US$ billion) By Combined Sectors FY15 (IDA17) FY18 (IDA18) *Note that FY19 Q1 sectoral information is still under internal review and not yet available. 19. Use of IDA resources by instrument balances investment and policy support. While Investment Project Financing (IPF) comprised most of IDA18 commitments up to now, a strong and increasing use of Program for Results (PforR) operations can been seen: accounting for over a quarter of IDA commitments in IDA18 to date, this instrument helps deliver sustainable results and build institutions and capacity16 by using, and improving a country’s own institutions and systems, and linking disbursement of funds directly to the achievement of specific program results.17 Effective use of Development Policy Financing (DPF) also plays an important role in supporting client countries in achieving sustainable development through a program of specific policy reforms and institutional actions (see Figure 4). In context of current debt sustainability concerns and emphasis, particular attention is placed on ways to enhance and increase DPF use in IDA18. Reflecting IDA18’s introduction of the Catastrophic Deferred-Drawdown Option (Cat- 16 IEG’s evaluation of Program for result: Early Stage Assessment of the Process and Effects of a New Lending Instrument (FY17) suggests that an appropriate use of the PforR instrument can help enhance IDA results. The high demand noted for PforR underscores the importance of the evaluation’s findings and recommendations, emphasizing the quality of results frameworks and disbursement-linked indicators. 17 Since its creation in 2012, there has been steady increase in the use of PforR. PforR supports government programs and helps leverage World Bank development assistance by fostering partnerships and aligning development partner goals and results that can lead to greater development effectiveness. - 11 - DDO), one such operation was approved for Kenya.18 IDA clients are at varying stages of readiness to take up Cat DDOs, including amid challenging macroeconomic conditions. Figure 4. Breakdown of IDA18 Instruments (Commitments in the first five quarters in a replenishment) 20. IDA18 introduced several adjustments to IDA18 support to facilitate FCV scale-up IDA’s Performance-Based Allocation (PBA) system in Chad, with country allocation more to provide more IDA resources to tackle the broad than doubled from IDA17 – to help spectrum of fragility, while keeping a strong revitalize the economy and tackle fragility emphasis on country performance. The main through climate-resilient agriculture, changes implemented to the PBA model have multi-sectoral response to improve access enhanced its poverty orientation, intensified support to to services and livelihoods in refugee small states, removed the 20 percent grant discount, hosting areas. and established the Risk Mitigation Regime to support countries facing increasing risks of FCV.19 Combined with a larger IDA envelope, these adjustments led to a doubling of core IDA allocations to FCS/FCV in aggregate in FY18 compared to FY15, the first year of IDA17. 21. Increased allocations have led to a rapid increase in commitments for fragile and small states. Compared to the same period of IDA17, the first five quarters of IDA18 commitments to FCS/FCV increased by 78 percent to US$6.5 billion, of which US$5.6 billion was financed from core IDA, and the remaining US$0.9 billion from non-core windows (US$0.35 18 US$200 million Disaster Risk Management Development Policy Credit with a Catastrophe Deferred Drawdown Option, approved in June 2018 for the Republic of Kenya to strengthen the Government’s institutional, technical, and financial capacities to manage the impact of climate and disaster risks. 19 Specifically, these measures: (a) enhanced the poverty orientation of the PBA formula by reducing the CPR exponent from 4 to 3; (b) intensified support to small states by increasing the minimum base allocations from SDR4 to SDR15 per annum; (c) removed the 20 percent grant discount and MDRI netting which would preliminary benefit FCS; and (d) established the Risk Mitigation Regime to provide a vehicle for enhanced support to countries with increasing risks of FCV and characterized by governments that are committed to addressing them. - 12 - billion from Regional Program, Figure 5. IDA17 and IDA18 (Q1-Q5) US$0.2 billion from CRW, and US$0.3 Commitments to FCS/FCV and Small States billion from SUF). US$2 billion was (of which financed from Core IDA) committed to Sahel countries20 in IDA18 to date, doubling from the same period of IDA17. For small states, IDA commitments increased by 89 percent to approximately US$544 million (US$457 million from national PBA, US$18 million from Regional Program, and US$70 million from CRW). However, comparing core IDA financing alone, small state lending has almost quadrupled from US$134 million in the first five quarters of IDA17 to US$457 million in the same period of IDA18 (see Figure 5). 22. While this is an encouraging initial scale-up for FCV, continued progress is not without challenges. Management will continue to prioritize support for operational delivery in these difficult contexts. A variety of efforts are underway or are already completed to strengthen operational support and enhance operational effectiveness to help boost implementation capacity in challenging environments. This includes expansion and enhancements to the Project Preparation Facility (PPF), implementation of the new Multiphase Programmatic Approach (MPA), implementation of the FCV staffing plan, support for Small states, as well as Operational Agile pilots and Simplification of IDA Windows (see Section E on Operational Support for more details). In addition, heightened attention and support is being placed on helping teams and countries strengthen debt management capacity. Figure 6. Regional Share of Grant Commitments 23. IDA18 provides highly concessional terms, (Total of US$6.3 billion) sustaining the agreed focus on concessionality to support the poorest and most fragile countries in the replenishment. IDA committed almost US$6.3 billion in grants in the first five quarters of IDA18, with an overall concessionality rate estimated at 54 percent. IDA commitments for FCS/FCV accounted for over half of the grants committed in IDA18 to date. For comparison, out of US$21.4 billion in total commitments during the first five quarters of IDA17, approximately US$2.6 billion were grants, with a concessionality rate of about 49 percent. Among regions, AFR accounted for the largest share of grant commitments (77 percent), followed by SAR and MNA (Figure 6). 20 Including Burkina Faso, Chad, Mali, Mauritania and Niger, per the WBG’s Sahel Initiative. - 13 - 24. Disbursements in FY18 have increased markedly and, exceeding early expectations, the disbursement ratio has remained relatively flat. As explained during the IDA18 discussions,21 when a replenishment volume increases as substantially as anticipated in IDA18, there is a natural lag between commitments of these new resources and disbursements, which draw on commitments from previous (and smaller) replenishments. Thus, while FY18 disbursements have increased by 11 percent compared to the last three years average (in IDA17), the disbursement ratio has only slightly decreased (see Figures 7 and 8, as well as details in Annex 1). Total undisbursed balance has increased, with the undisbursed balance of PforR commitments most pronounced – mainly due to the “young” age of the PforR portfolio, and reflecting the recent rapid growth in PforR commitments. Given that undisbursed balances of concessional financing22 for IDA graduates amount to over US$7 billion, it may be helpful to consider incentives to encourage graduates to restructure older programs, which would greatly enhance the efficiency of IDA’s portfolio. Figure 7. IDA Gross Disbursements Figure 8. IDA IPF Disbursement Ratio (US$ billion) (Percent) 25. Looking to the FY19 pipeline, demand from clients for IDA remains solid (particularly in Africa and South Asia regions). IDA financing for the remaining IDA18 years is projected in the range of US$22.5 billion to US$26.5 billion in FY19, and US$22 billion to US$26 billion in FY20 – which assumes full utilization of IDA18 resources. Outlook for the FY19 pipeline is sufficiently robust to meet projections, with AFR and SAR Regions demonstrating particularly strong demand for IDA with the largest volumes in the pipeline. Implementation of IDA Windows, Special Regimes and Set Asides 26. The innovation and expansion of IDA windows, special regimes and set asides under IDA18 greatly expanded IDA’s toolkit to assist clients in meeting complex development challenges. Key new instruments have been introduced, in particular, the Refugee Sub Window and Private Sector Window – to help address increasing fragility issues and scale up private sector engagement. In addition, existing windows – the Regional program, Scale-up Facility, and Crisis Response Window – were expanded due to their high demand and wide-reaching impact. While the operationalization of the new windows has required substantial upfront investments of time and resources, overall use of windows has been solid to date. Demand for the new Refugee Sub 21 See IDA18: The Demand for IDA18 resources and the Strategy for their Effective Use, May 31, 2016. 22 Includes IDA financing on Regular, Blend, and Hard Term credits. - 14 - Window has been substantial. With few crises calling for support over FY18, the CRW is the only window with commitment amounts lower than in the first year of IDA17. 27. The following section lays out key considerations on windows’ resource use and policies to complete their successful implementation over the remainder of IDA18 (see Table 2 for overview on IDA18 window allocations, and Annex 2 for further background on IDA18 windows and their use). Table 2. IDA18 Windows Indicative Allocations (SDR and USD million, as of July 2018*) SDR billion USD billion Concessional IDA 44.9 63.0 Core IDA 37.0 51.8 National PBA (PBA+RMR+Alloc TAR) 35.0 49.1 Unallocated TAR 1.9 2.7 o/w Syria set-aside 0.7 1.0 Non Core IDA 7.9 11.1 Regional Program 3.6 5.0 Refugee Sub-window 1.4 2.0 CRW 2.1 3.0 Arrears Clearance 0.8 1.1 Non-Concessional IDA 6.4 9.0 Scale-up Facility 4.4 6.2 Transitional Support 2.0 2.8 Private Sector Window 1.8 2.5 TOTAL 53.1 74.5 *Based on the Commitment Authority as of early June 2018. Concessional resources converted from SDR to USD million using IDA18 replenishment exchange rate of 1.40207. Non-Concessional resources converted from USD to SDR using the same replenishment exchange rate. 28. IDA Regional Program: Total commitments from the Regional Program IDA18 support for the regional integration project reached US$1.3 billion in the first five on Unique Identification (ID) in West Africa, quarters of IDA18, with most of the US$122 million – first regional MPA program assistance supporting the Africa Region (69 increasing the number of persons with government- percent, or US$0.9 billion), followed by the recognized proof of identity, mutually recognized South Asia Region (27 percent, or US$0.4 billion). FCS/FCV support accounted for 27 across ECOWAS states and helping facilitate service percent of Regional Program commitments. access, to 100 million beneficiaries (27 percent of Feedback is sought on two potential ECOWAS population). modifications for IDA19: (i) ways to - 15 - encourage more policy work to help advance regional integration; and (ii) the possible extension of financing on credit terms to regional entities.23, 24 29. IDA Refugee Sub-Window (RSW): While IDA18 RSW support to help address the this new window had to be operationalized in the refugee crisis in Bangladesh, US240 million – past year, including development of this novel approach for IDA assistance and extensive first direct intervention to address critical needs of Rohingya refugees and host communities less consultations with the Board, the uptake has been substantial – with demand mostly from the Africa than a year since the crisis broke out, supporting the Government in developing a broader region – and approximately US$570 million response to the socio-economic dimensions of approved in the first five quarters of IDA18 for 11 the crisis. projects. The current pipeline of more than 10 projects covers various sectors including education, health, social protection, access to jobs, water and sanitation. At this stage, demand indicates that the window could absorb up to an additional 15 percent increase during IDA18, and in line with this, the national cap is proposed to be raised from US400 million to US$500 million. Feedback is also sought on a proposal to reframe the 100 percent grant exemption to provide 100 percent grants only to countries that experience a sudden massive inflow of refugees, defined as receiving at least 250,000 new refugees or at least 1 percent of their population within the last twelve months. 25 30. IDA-IFC-MIGA Private Sector Window (PSW): In its first year of operations, IDA18 PSW support to SME-focused the window has demonstrated significant microfinance banking in Cambodia, US$20 leveraging impact: Deploying just US$185 million – enabling Hattha Kaksekar Ltd in the million of PSW resources enabled about US$800 issuance of local currency bonds to support million in additional private sector financing in local currency financing to SMEs in the most difficult environments (with one-third of underserved rural areas, including women- the financing going to FCS countries) and in the owned SMEs. most challenging markets (e.g., by helping address key SME investment challenges). Management seeks endorsement for a delegation of authority for a programmatic approach for better impact and more efficiency.26 23 Preliminary findings of the forthcoming IEG’s evaluation Two to Tango: An Evaluation of World Bank Group Support to Fostering Regional Integration (see Regional Program paper). 24 With the Regional program in place since IDA13, a separate stock take paper has been prepared for the MTR: See further details in “IDA Regional Program Update”. 25 In these exceptional cases, the usual one-sixth requirement from national IDA would also be provided on grant terms. See further details on IDA18 Refugee Sub-Window implementation in the MTR Special Theme paper on Fragility, Conflict, and Violence. 26 See further details in the separate paper on the Private Sector Window (PSW) for the IDA18 Mid-Term Review. - 16 - 31. IDA Crisis Response Window (CRW): CRW commitments to date totaled IDA18 CRW support to the Pacific Resilience US$350 million. Demand has been modest so Program, US$20 million – including US10 million far compared to earlier replenishments. for Tonga to help “build back better” after Tropical Management therefore expects capacity to Cyclone Gita, strengthening resilience for critical re-allocate between US$1-1.5 billion from infrastructure by supporting school recovery, the CRW for the remainder of the reconstruction, and retrofitting (often shelters in replenishment.27 Also, while the CRW is disasters). assessed as performing well against its objectives, a policy question for the future is whether and how the CRW could contribute to the broader WBG pivot towards greater crisis prevention and preparedness, while preserving its core function as a vehicle for crisis response. In particular, Management is exploring using CRW resources to support earlier response to slower- onset crises, such as food insecurity that is related to CRW-eligible events, like drought and food price increases.28 Regarding the new IDA18 Cat DDOs, more time is needed to build the pipeline. It is proposed not to develop a framework to utilize the Regional Program for multi-country Cat DDOs at this time. This could be revisited in the future if conditions and opportunities evolve. 32. IDA Scale-Up Facility (SUF):29 In the first IDA18 SUF and Regional Program support to five quarters of IDA18, SUF financed 11 the West African Development Bank for operations, across three regions, nine countries Regional Off Grid Electrification, US$150 and one regional institution, with total million (pending) – programmatic approach to commitments amounting to US$2.3 billion – building foundations and markets for renewable with the Africa region fielding the strongest off-grid energy (solar), while promoting regional demand. Resources have primarily supported Integration in West Africa (including the Sahel). large-scale infrastructure programming aimed at improving electrification, sanitation and access to water. To the degree there are unutilized funds from another non-concessional IDA18 window, Management expects the SUF to have potential scope for financing additional transformational projects in IDA countries. Issues going forward include managing an appropriate balance between Blends and IDA-only countries while monitoring Blends’ enhanced access to IBRD under the IBRD Capital Package and ways to clarify the role of SUF across the spectrum of IDA clients; and the possible extension of SUF eligibility to credit-worthy institutions which can promote regional integration.30 33. IDA Transitional Support: In the first five quarters of IDA18, US$228 million of Transitional Support was committed across all three recent graduates. Given the agreed IBRD Capital package, Management is proposing to reduce total Transition Support by about one-third, in the range of US$0.9-1.3 billion. In addition, upon review of IDA’s graduation policy and 27 If needed, commitment authority can be increased through the introduced balance sheet flexibility of the financial hybrid model should a last minute CRW replenishment be required. 28 With the Crisis Response Window in place since IDA16, a separate stock take paper has been prepared for the MTR: See further details in “IDA18 Mid-Term Review. Crisis Response Window: Review of Implementation” 29 At the IDA17 Mid-Term Review, IDA Deputies endorsed the creation of the US$3.9 billion SUF non-concessional financing facility. 30 See further details in the separate paper on the Scale-Up Facility (SUF) for the IDA18 Mid-Term Review. - 17 - transition process, Management proposes a three-prong approach to help Blend countries prepare for IDA graduation: ensuring that every Country Partnership Framework (CPF) for Blend countries includes measures to support the transition to IDA graduation; assisting them in addressing risks of debt distress; and strengthening knowledge and tools available to country teams. Management also proposes to retain the existing cap for large Blend countries, and to continue to suspend the acceleration clause for the three IDA18 Graduates – Bolivia, Sri Lanka and Vietnam. Further, Management is proposing to revise the 1985 exception on small islands. Looking ahead, feedback is also sought on: (a) prospects for graduation of IDA countries; (b) exploring access to IDA windows for IDA recent Graduates and Small States; and (c) shifting in lending terms for those Small States with a sustained GNI per capita above a certain threshold.31 34. IDA Risk Mitigation Regime (RMR): The RMR was introduced in IDA18 to help countries address the drivers of fragility and build institutional resilience. Work is focused in the four eligible countries – Guinea, Nepal, Niger, and Tajikistan – with implementation progressing well. Nepal has committed two-thirds of its RMR allocation to address drivers of fragility identified in their Risk and Resilience Assessment (RRA), enabling the Bank to support at the outset the fiscal underpinning of Nepal’s new federal state – helping to deliver on an inclusive social contract called for by citizens and historically marginalized people and also bringing closure to the 2006 Comprehensive Peace Agreement.32 For IDA18, no change to the RMR eligible country list is being proposed. 35. IDA Turn-Around Regime (TAR): Under IDA18, TAR continues to provide exceptional levels of financial assistance beyond regular IDA country allocations to help support momentous transitions in currently three countries and help build stability and resilience. The Central African Republic and Madagascar continued their eligibility that started in IDA17. Gambia will start receiving TAR support in FY19. Finally, while US$1 billion had been notionally set-aside within the TAR for Syria in IDA18, the situation in Syria has not since turned around, and the conditions set for the use of those funds are unlikely to be met during IDA18. Management is therefore seeking feedback on options to re-deploy all or part of this set-aside.33 36. IDA Arrears Clearance Set Aside: US$1.1 billion (SDR 0.8 billion) was set aside under IDA18 to support three potentially eligible countries in their re-engagement. Somalia has been coordinating with the IMF, meeting progress towards HIPC under a milestones-based approach. The WBG prepared a 4-year Country Partnership Framework for Somalia that was discussed at the Board this September. The package included an exceptional allocation of US$140 million pre- arrears clearance grants (PACG) to accelerate momentum toward arrears clearance and HIPC Decision Point. The first two projects under the PACG were approved in September (the Domestic Revenue Mobilization and Public Financial Management Capacity Strengthening project for US$20 million; and the Recurrent Cost and Reform Financing project (additional financing) for US$60 million). Continuing dialogue and reform programs are underway for Sudan and Zimbabwe. Consistent with prior practice, if resources in this set-aside are not tapped in IDA18, it 31 The overall approach to IDA Graduation and Transition financing has been reviewed in more detail, as agreed during the IDA18 replenishment – see IDA18 MTR: Transitioning out of IDA financing: A review of graduation policy and transition process. 32 See further details on IDA18 RMR implementation in the MTR Special Theme paper on Fragility, Conflict, and Violence. 33 See further details on IDA18 TAR implementation in the MTR Special Theme paper on Fragility, Conflict, and Violence. - 18 - is proposed that they be rolled over to IDA19. In addition, as is regular practice, an assessment will be prepared on the adequacy of the arrears clearance set aside during IDA19. 37. The growing suite of IDA set asides, accounting for about one-third of IDA18, creates important flexibility beyond IDA’s core national allocations to respond to key development challenges across countries – it is therefore important to streamline internal processes to manage them most effectively. Bank operational teams have reported that differing requirements across the windows tax staff resources, increase the complexity of the IDA framework, which complicates planning and programming with clients, and slow preparation. IDA Management has responded by clarifying requirements and streamlining where possible, while preserving the intentions and agreed policies to guide the prudent use and governance of IDA18 windows (see update on the simplification of IDA Windows in section E. on Enhancing Operational Support). 38. To ensure that valuable IDA resources are not left unutilized but used for maximum impact and targeted where needed most at this time, re-deployments from some IDA windows and set-asides may be warranted. For instance, requirements for utilizing the set asides for IDA arrears clearance or Syria’s potential IDA re-engagement may not be met before the end of IDA18. Crisis needs to date have not called on the full FY18 CRW allocation, and IDA18 Transition Support is proposed to be reduced, given the recently agreed IBRD Capital package. At the same time, demand for other windows has been strong and may begin to exceed their allocations. In addition, unique country circumstances may call for specific dedicated reallocations. For instance, core IDA funding for Yemen – which has been critical and had impressive impact – is now exhausted at a time when the war in Yemen continues to escalate into one of the world’s worst humanitarian crises, with eight million people on the brink of famine. In this context Management seeks endorsement of a special IDA18 allocation of US$400 million for the country, driven by the cost of maintaining the social safety net program for the next two years. Redeploying resources across IDA windows and country allocations, to some degree, would assure that IDA funds are optimally redeployed and support clients where needed the most. See Section III on Issues for Consideration for specifics on the proposal to enhance flexibility for managing IDA resource allocations and other updates to the IDA18 framework. B. MEETING POLICY COMMITMENTS: PERFORMANCE ACROSS IDA18 SPECIAL THEMES 39. The Special Themes of IDA18 have broadened the institution’s development ambitions and focus. Introducing two new Special Themes – Jobs and Economic Transformation, as well as Governance and Institutions – IDA18 set out to tackle key, cross-cutting development impediments in conjunction with IDA’s long-standing areas of focus. In addition, existing agendas on Fragility, Conflict and Violence, Gender, and Climate Change were broadened – for example, with more ambitious policy commitments across these Special Themes, mainstreaming of fragility, gender and climate considerations across IDA planning and operations, and the goal to double IDA’s FCV support. Implementation is helping address key development challenges on the road to 2030, with particular attention to linkages and synergies across themes and scaling up engagements where most needed. Five dedicated reports on individual Special Theme implementation have been prepared for the MTR and provide a detailed picture on implementation progress, key challenges and actions taken. In addition, important issues are raised in these papers - 19 - for discussion to ensure strong delivery of IDA18 by 2020 and to inform important considerations for upcoming IDA19 discussions.34 40. The comprehensive suite of IDA18 Policy Commitments spans and connects key development challenges – with much progress to date. IDA18 themes support central objectives of the 2030 agenda, e.g., to advance energy for all objectives, help address gender-based violence, focus on mitigating core elements of fragility and refugee crises, encourage better pandemic preparedness, and mobilize private sector-led growth. Moreover, IDA’s holistic approach to development also enables work which tackles issues across the themes, for instance: promoting job creation in fragile environments, and addressing displacement of people which can be exacerbated by both climate change and fragility. At the same time, managing across this breadth of work program areas is complex and stretches operational focus and capacity. The first half of IDA18 implementation has seen robust progress across the 46 policy commitments of the replenishment. As of September 30, 2018, more than three-quarters of policy commitments are solidly on track for delivery, with some already delivered (see Annex 3 for full IDA18 Policy Commitments targets and status). Key highlights include: • FCV: To provide better fragility support, all CPFs in FCV countries have been informed by Risk and Resilience Assessments (RRAs). There is also good progress on operations providing vital services for refugees and host communities – with important demand for Refugee Sub-Window financing. The flagship report Pathways for Peace has been finalized and launched to deepen knowledge on the mitigation and prevention of FCV risks. • Climate: All country planning products (SCDs and CPFs) as well as all operations have reached mainstreaming targets, with 100 percent compliance for incorporating/being screened for climate and disaster risk considerations. Also, the goal to help countries translate their (I)NDCs into policies and investment plans is close to being met already with nine countries supported (out of 10 targeted for the full IDA18 period). GHG accounting and carbon pricing commitments have been met with 100% compliance as well. Supporting the addition of five GW in renewable energy generation has already been met with approved delivery of 6.0 GW to date through direct and indirect financing35 – in line with MFD objectives to leverage the private sector while optimizing the use of scarce public resources and concentrating Bank funds on facilitating the penetration of renewable energy generation. Further addition is expected over the remaining IDA18 period depending on country capacity and project gestation, with close attention paid to encouraging additional private sector investments. 34 See separate MTR papers on each Special Theme for details on their IDA18 implementation. 35 Includes 0.8 GW through direct financing and 5.2 GW through indirect financing (of renewable energy generation facilities, renewable energy integration, and technical assistance for renewable energy generation in IDA countries) – see Annex 1 and IDA18 MTR paper on Climate Change Special Theme for further details. - 20 - • Gender: 100% of operations financed in primary and secondary education (totaling close to IDA18 support to the Priority Skills for US$2.3 billion) address gender-based Growth Program for Results in Rwanda, disparities. Similarly, 100% of operations US$120 million - addressing gender gaps financed in maternal and reproductive health in skills development for growth through (totaling US$1.5 billion) support improvement technical and vocational education and in availability and affordability of services. training, and tracking the number of Skills development operations have even female graduate from these programs – surpassed their target, with 92% (instead of which include training in key sectors such 75%) considering how to support women’s participation, improve the productivity of their as transport and logistics, energy, and economic activity, and reduce occupational manufacturing. segregation. Likewise, more ICT operations than targeted – 3 out of 4 (instead of half) – support better access to the Internet and IT services for women. • Jobs and Economic Transformation: The policy commitment to catalogue learnings from Jobs Diagnostics has already been met with the report Pathways to Better Jobs in IDA Countries finalized and publicly available. Operational guidelines for integrated youth employment programs have also been prepared for task teams and begun to inform a new generation of integrated programs such as in Nepal and Ghana. Other examples of good progress include global value chain analyses (with seven out of ten ongoing or done), impact analysis done as a standard part of undertaking SME and entrepreneurship programs, and assessment of jobs impacts of prospective infrastructure investments (with five macro model pilots for job measurement carried out). • Governance: Several commitments to provide country support have already been delivered IDA18 support for the Growth and and exceeded, or are likely to exceed, targets in Competitiveness DPO in Ethiopia, key areas: for example, on increasing Tax/GDP US$1.2 billion (pending) – helping ratios (with support to close to two-thirds, facilitate major restructuring of the state instead of one-third, of countries), Public around (i) maximizing finance for Expenditure and Financial Accountability development; (ii) boosting (PEFA) assessments (with the targeted ten competitiveness through a better countries already delivered and several more environment for the private sector; and (iii) ingoing), or helping identify and address institutional bottlenecks to service delivery in enhancing public transparency and health, water, and/or education sectors (with accountability to promote good eight out of ten countries already supported and governance. eight more ongoing). Assisting with implementation of user feedback or enhanced grievance redress mechanisms (GRMs) for service delivery to ensure participation by women in these processes – a commitment with cross-supporting gender goals – has already been exceeded with 26 projects in 21 countries (instead of 10 targeted). Delivery of another commitment with linkage to FCV Special Theme goals – strengthening governance and institutional analysis in half of Risk & Resilience Assessments and three-quarters of Recovery & Peacebuilding Assessments – has also exceeded targets with 78 percent and 100 percent delivery respectively. The new - 21 - Methodology for Assessing Procurement Systems 2 (MAPS2) assessment tool has been finalized and is seeing strong demand (way beyond the goal of five countries). 41. Management is focused on advancing important policy commitments to do even more. Across Special Themes, Management is carefully monitoring specific policy commitments: paying close attention – and putting action plans in place where needed – to accelerate progress on commitments that are important priorities, prove more challenging to meet, or have made good progress but need close monitoring to ensure their delivery pace stays on track. While details are provided in the individual Special Theme papers, key highlights as of September 30, 2018 include: • FCV: Priority attention is placed on accelerating progress for FCV staffing (both numbers and locations), while attention remains on the methodology and monitoring of the Facetime Index. Addressing Gender-Based Violence (GBV) also remains a key concern – with particular focus on increasing the number of operations in fragile contexts which prevent or respond to GBV, including through access to essential services and livelihood supporting activities for women. • Climate Change: Implementation of climate-smart agriculture investment IDA18 support to the regional WACA Resilience plans (CSIPs) and forest policy notes Investment Project in West Africa, US$190 (FPNs) is on track, with task teams million – fostering climate-smart design and focused on pipelines to ensure strong resilience-focused investments in Benin, Côte delivery. While targets for renewable d’Ivoire, Mauritania, São Tomé and Príncipe, energy generation have already been Senegal, and Togo: promotes harmonized coastal met and are expected to be significantly zone management at a regional level, surpassed, the balance between Bank interventions at policy and institutional levels, and private sector funded support is being closely monitored as part of MFD physical and social investments at local level, and efforts, together with the pace of establishment of integrated support systems and assumed delivery. early warning – with 100% climate change adaptation co-benefits. • Gender: Specific attention is paid on building up the pipeline for gender considerations in urban passenger transport projects (one project has been approved: Urban Transport Greater Abidjan Port-City and its project design meets the expectation of addressing the different mobility and IDA18 support to the Agribusiness and Trade personal security needs of women) and for project in Zambia, US$50 million - supporting launching pilot data collections in at least job creation through agricultural six IDA countries to gather household transformation and leveraging analysis of information on employment and assets value chain opportunities: training and support (data collection has been completed on Malawi and work is underway for Ethiopia to SMEs to help link them to larger markets; and Tanzania). regulatory reform and financing investments to access regional and global markets – with over • Jobs and Economic Transformation: 30,000 direct beneficiaries, of which at least Close attention is being paid on how one-third women, expected. analyses and diagnostics (e.g., on migration lens) inform IDA operations and - 22 - create impact in the IDA portfolio. Accelerating project origination and delivery of the PSW is also a key focus—an important endeavor to bring WBG entities together for MFD. • Governance and Institutions: Sustained attention is placed to make more progress on areas of high demand and global priority, including strengthening Domestic Resource Mobilization (DRM), firming up pipelines related to preparation of pandemic preparedness and response plans (especially given their long lead times), and accelerating Illicit Financial Flows (IFFS) assessments and their prevention impact. Lessons learned on enhancing SOE performance will also be important, as well as enhancing the impact of value-for-money items of the IDA18 portfolio (e.g., MAPS2 and PEFA). 42. IDA is working with clients and partners across sectors and themes to reinforce IDA18’s impact for enhanced growth, resilience and opportunity. Strengthening presence on the ground in fragile states remains a key priority – as is attention to capacity support, for example, in small states. IDA is fostering strategic linkages, synergies and joint initiatives across themes and global practices – e.g., across the infrastructure, gender, economic empowerment, and fragility agenda and mainstreaming gender, climate, jobs, fragility, and governance perspectives across country planning and project design. IDA is also collaborating with partners at the humanitarian- development nexus to work strategically together, leverage respective expertise and operations, and scale up joint impact (see also Section F). To broaden our impact, MFD and private sector mobilization are integrated more comprehensively into IDA engagements, especially in the most difficult contexts. Special Theme synergies – Providing cross-cutting solutions: infrastructure development to spur job creation, private sector development, market access and connectivity, economic growth, regional integration, and gender equality: Through IDA, the World Bank has helped build the transport infrastructure and systems necessary to connect people with jobs, goods and services. During FY18, 5,931 km of roads were built in IDA projects, linking rural areas in Bangladesh, Nepal, the Democratic Republic of Congo, Guinea and many other countries with markets and urban areas. In cities such as Abidjan, the World Bank is helping to improve urban mobility, transport management, and logistics in a way that identifies and addresses the differing transportation needs of women and men. Continuing a growing focus on development corridors, a newly approved project will expand the economic activity between Pakistan and Afghanistan, improving regional connectivity and promoting private sector development along the Khyber Pass corridor. 43. Beyond meeting numerical targets, operational teams are focused on the most effective ways to scale up and pilot novel approaches that increase the quality of IDA programs. Recognizing the challenges of a significantly larger portfolio, more programmatic and risk-based approaches are pursued, with agile initiatives and simplification efforts focused on freeing up implementation space for task teams (see Section E). Collective responsibility and synergies across the WBG are fostered through new windows like the PSW. To address growing concerns, IDA is also stepping up the policy dialogue with borrowers on debt sustainability challenges, including debt management, enhanced reporting transparency, and sustainable implementation of IDA operations. Additionally, teams are paying close attention to solidifying operations in the pipeline, to continue the strong delivery seen over the first half of IDA18. - 23 - 44. In view of persistent development challenges, continued success in implementing IDA18 requires sustained commitment and attention to implementation, operational effectiveness, and long-term impact. Overall experience with managing five themes and 46 policy commitments to date has raised implementation and organizational challenges and pointed toward the need for sustained focus, synergies and consolidation. Recognizing the exceptional size of the IDA18 agenda and framework, IDA Management and teams are addressing implementation challenges and key capacity constraints. Client demand confirms that IDA’s priorities and themes remain critical for IDA18 support to MPA for Improving Nutrition advancing the SDGs. The new focus on Outcomes in Madagascar, US$90 million – to help Jobs and Economic Transformation is foster human capital, the program’s first 5-year phase helping address critical, cross-cutting aims to increase utilization of evidence-based impediments to equitable and scaled up reproductive, maternal and child health and nutrition growth prospects. Governance, a long- interventions, improve key nutrition behaviors known to standing, well embedded practice across reduce stunting, and provide immediate and effective Bank programs, has highlighted the response to crisis or emergency. importance of effective and efficient institutions. Solid headway is being made, thanks to the exceptional financing scale, ambitious commitments, and IDA18’s innovative tools. C. ACHIEVING RESULTS: IDA RMS AND IMPACT OVER TIME 45. IDA remains one of the global leaders in defining, measuring, delivering and communicating the results of its development program. Measuring and tracking the changes that IDA makes in client countries have been a critical part of the World Bank’s focus on results. During IDA18, results continue to be at the core of IDA, typically captured both qualitatively and quantitatively. Quantitative results are typically tracked with the IDA Results Measurement System (RMS); at a qualitative level, results are captured in a narrative form through results stories and briefs to complement quantitative data and shows the human side of the IDA results. 46. Since it was introduced in IDA13, the IDA Results Measurement System (RMS) has proven to be a robust accountability and strategic management tool to focus on results in IDA countries. The IDA RMS is a central part of the WBG’s framework for tracking progress of IDA countries at an aggregate level and integral to the World Bank’s efforts to improve focus on results. Since 2002, the IDA RMS has played an important role in driving change and focusing attention on strategic subjects in results management. 47. The RMS was further refined in IDA18 to continue improving IDA’s focus on results monitoring and measurement at the country, program and project levels. The IDA RMS has evolved over the years to better capture results in the key focus areas set for each IDA replenishment cycle and continues to be an innovative and flexible tool, useful in the oversight and strategic direction of IDA lending. The current version of the RMS is the result of the sustained effort over the years of introducing and improving indicators that are strategically relevant for our clients, fine tuning of methodologies for data collection and aggregation, and the need to reflect the Bank’s corporate priorities and global emerging issues (see Box 2 on key enhancements introduced in the IDA18 RMS). - 24 - Box 2. IDA18 RMS Enhancements • Alignment with the World Bank’s Corporate Strategy and the 2030 Sustainable Development Agenda: The IDA18 RMS was developed in alignment with the Bank’s corporate strategy and reflecting the spirit of the Sustainable Development Goals, while maintaining the RMS’s ability to serve specific needs in monitoring IDA’s performance. • Harmonization with World Bank Scorecards: The IDA18 RMS is harmonized with World Bank Scorecards to the extent possible. Both tools now have the same three-tier structure with common indicators organized under the same categories and using a three-year reporting cycle. • Enhancement the quality of data and validity of reported results: The IDA18 RMS adopted a set of Corporate Results Indicators to better track results directly supporting IDA and a new approach for aggregating and reporting results using the cumulative totals of outputs achieved during a specific time period. The IDA18 RMS also disaggregates data for FCV and female beneficiaries when feasible and applicable. • Addressing key emerging issues that are relevant to the IDA18 Special Themes: The strategic objectives of the five IDA18 Special Themes are fully reflected in the RMS with specific indicators tracking their implementation progress during the IDA18 cycle. 48. IDA support helps countries realize key development results. The following provides important highlights from the FY18 RMS on IDA sector interventions, organizational and operational effectiveness, development outcome ratings, portfolio performance and financial sustainability, as well as progress on advancing IDA18 Special Themes. For a complete list of results please refer to Annex 4 – IDA18 Results Measurement System. Key results achieved in FY18 on IDA-supported Operations (Tier 2) 49. Following are highlights of key results achieved by IDA-supported projects during FY18 in key sectors including HNP, agriculture, infrastructure, education and provision of energy. While these results are being reported in the IDA18 RMS for the first year of the IDA18 cycle, they are mostly attributed to achievements of operations formerly approved and currently under implementation. 50. During FY18, IDA-funded operations provided essential health, nutrition and population services to almost 37 million people. This included 18 million children immunized, mainly attributed to the implementation of large health projects in Pakistan, the Democratic Republic of Congo and Niger. There were also 4.8 million deliveries attended by skilled health personnel with key contributions from key projects including Tanzania’s Strengthening Primary Health Care for Results Project and Kenya’s Transforming Health Systems for Universal Care Project aimed at improving the quality of primary health care services nationwide with focus on maternal, neonatal and child health services. Finally, almost 14 million women and children received basic nutrition services during FY18 with important contributions from projects in Afghanistan and Benin targeting the increase in coverage and utilization community-based child growth and nutrition interventions, as well as other important health services in Afghanistan including essential primary care and basic hospital services to the population. 51. Important IDA-supported results have been achieved in education, social protection and financial inclusion in the first year of IDA18. More than half a million teachers were trained - 25 - by IDA investment operations focusing – together with efforts on more integrated, whole-team teacher development approaches – on improving teacher skills, providing instructional materials, and strengthening accountability of schooling systems, among other areas. In social protection, there were more than 12 million new beneficiaries of operational approaches designing and financing programs that deliver social safety nets through cash transfers and more; more than six million of such beneficiaries were women. Finally, more than 270 thousand beneficiaries including people, microenterprises and SMEs were reached with financial services in operations funded by IDA during FY18. 52. IDA-financed operations contributed to meet the basic needs of a large number of people by providing access to water, sanitation and improving urban living conditions. During FY18, 13.2 million people gained access to improved water sources and 8.5 million people to improved sanitation facilities. Also through the direct interventions of operations financed by IDA, about 3.4 million people living in urban areas obtained access to improved services. These results were mostly attributed to the Water Supply Sanitation and Hygiene Project in Ethiopia and the Nigeria’s National Urban Water Sector Reform Project. 53. IDA’s support in the energy sector remains focused on helping client countries achieve universal energy access and accelerate efforts to expand energy efficiency and renewable energy. During FY18, about 9 million people received new or improved electricity service through IDA-supported operations, mainly attributed to the Kenya Electricity Expansion Project, the Senegal Electricity Sector Support Project, and Myanmar’s National Electrification Project – with these three projects contributing to direct provision of electricity for approximately 4.5 million people. In line with the IDA18 policy commitment to support the addition of five GW in renewable energy generation in IDA countries, operations supporting the addition of 6.0 GW of renewable energy generation in IDA countries have been approved by the Board of Executive Directors as of September 30, 2018. 54. IDA continued its efforts in agriculture, crucial to economic growth, reducing poverty, helping raise incomes and improving food security for IDA countries. In the agriculture sector, IDA-financed agriculture projects assisted almost two million farmers to adopt improved practices of technologies in agriculture such as seed preparation, planting time, feeding schedule, feeding ingredients, postharvest storage/ processing, etc. IDA organizational and operational effectiveness (Tier 3) Development Outcomes Ratings 55. IEG ratings of development outcomes for completed IDA country strategies, programs, and IDA operations showed mixed results.36 The share of country programs rated 36 IEG’s recent Results and Performance Review (RAP -2017) highlights improvements in IDA performance. Going forward, IDA teams can build on what has worked well to improve the outcome ratings of IDA portfolios in recent years. Furthermore, the breakdown of performance data by Global Practice provided in the RAP 2017 can help encourage cross-GP learning and transfer of good practice from well-performing GPs. - 26 - satisfactory (FY15-FY18 four-year rolling average) decreased to 4837 percent compared to 57 percent as previously reported in the IDA17 RMS (FY14-FY17 four-year rolling average). This decrease is mostly due to the exit of FY14 data which included a larger sample38 with a higher rate of satisfactory completion of CPFs (thus higher weight in the average) in the moving average.39 The Bank is further enhancing our work program to improve CPF design and implementation, such as updates to the Country Engagement Guidance and Procedure and training programs, including the CPF Academy and a CLR clinic. On the other hand, the percentage of satisfactory development outcome of IDA operations remained high. Most recent data for projects exiting during fiscal years FY15-17 for which at least 60 percent of the projects for each fiscal year and evaluated by IEG stood at 85.4 percent, above the IDA18 performance standard of 80 percent. This represents a slight improvement since the last update which stood at 83.2 covering the FY14- 16 period. 56. Feedback from clients in IDA countries remained positive during FY18. Fiscal year 2018 data from the World Bank Group’s Country Opinion Survey Program40 (FY18) tracking client feedback on the effectiveness of WBG engagements indicate an overall positive perception of clients interacting with the Bank. Average rating (in a scale of 1 to 10) for overall WBG effectiveness and impact on results stood at 6.90 (6.59 in FCS) in FY18. The average rating on contribution of the WBG knowledge was positive with a rating of 7.30 (7.28 in FCS). The average rating on client feedback regarding WBG’s responsiveness and staff accessibility reached 6.52 (6.29 in FCS) at the end of FY18. Finally, clients’ perception on WBG collaboration with other donors had an average rating of 7.05 in FY18, compared to 7.4 reported in FY17. 57. Integration of beneficiary feedback mechanisms into the design of IDA projects has become nearly universal. When first introduced in FY15, the Strategic Framework for Mainstreaming Citizen Engagement aimed at mainstreaming citizen engagement in operations for improving development results and building effective national mechanisms for citizen engagement with governments and the private sector. Since then, the framework has been systematically implemented across all Global Practices and Regions into WBG operations focusing on integrating beneficiary feedback (where beneficiaries can be clearly identified) into the design of all investment projects. As a result, IDA projects that include a beneficiary feedback indicator in the results framework reached 94 percent at the end of FY18 compared to 92 percent at the end FY17 and only 38 percent reported at the beginning of the IDA17 cycle (FY15). Portfolio Performance and financial sustainability 58. Bank performance in IDA-financed operations remained strong. The percentage of closed IDA projects (as a share of IDA commitments), reviewed by IEG, that were rated Moderately Satisfactory, Satisfactory, or Highly Satisfactory on overall Bank’s performance reached 84.2 percent41, exceeding the performance standard of 80 percent. Performance during 37 Calculated on a four-year rolling basis for years FY15-18 for a total 33 IDA strategies reviewed by IEG. 38 FY14 data included 15 CPSs rated moderately satisfactory or better, compared to only 6 in FY18. 39 Although the average saw a reduction, FY18 experienced a higher rate than in FY17 representing an upward trend 40 The Country Opinion Survey (COS) uses a representative but different sample of countries surveyed every year. 41 Based on projects exiting IEG’s review during FY15-17. - 27 - supervision stood at 81.7 percent, while performance at entry remained below the threshold with 66.8 percent. As noted by IEG, key commonly identified project-level success factors included supervision quality and the ratings record of projects managed by the task team leader, as well as incorporation of lessons learned and analytical work, the quality of the project’s results chain and project design. 59. Quality of monitoring and evaluation in IDA-financed operations has shown progress, but there is great scope for further improvement. While IEG ratings of the quality of M&E in IDA-financed operations increased to 44.4 percent, from the 39.3 percent previously reported in the IDA17 RMS (October 2017), they remain below the IDA18 performance standard of 80 percent. These ratings assess operations after they have already closed and therefore have a significant lag. Currently the rating of M&E quality used in corporate reporting comes from the IEG assessment of closed operations at the ICR stage. Recent changes to the Project Appraisal Document (PAD) and Implementation Completion and Results Reports (ICRs) in the last two fiscal years aim to strengthen further results management, and combined with greater emphasis and accountability during implementation, are expected to improve the quality of M&E. For instance, innovative approaches, like the Anti-Corruption and Results Monitoring Action Plan endorsed for Afghanistan (June 2018), are helping improve results and monitoring of programs. 60. Preparation time for IDA operations was slightly shortened. The average preparation time from concept note to first disbursement for IDA IPF projects stood at 22.8 months (21.2 for FCS) for FY18 – about six weeks less than last fiscal year. Time taken from project concept note to Board Approval, the initial milestone the World Bank has more control over, remained unchanged with an average of 13.8 months compared to FY17. This has improved slightly in FCSs, with a reduction of about a month compared to FY17 data. 61. IDA operations continue to draw lessons for their design from impact and other evaluations. IDA operations have continued to incorporate evaluative approaches into project design, drawing lessons from other operations and deploying knowledge from within and outside the Bank. As reported in the IDA18 RMS, the share of IDA operations approved during FY18 that document lessons learned —from Impact Evaluations, IEG reviews of ICR Reports, or such other analytical and evaluative documents e.g., Public Expenditure Reviews (PERs), Country Financial Accountability Assessments (CFAA) —and reflect them in their project design reached 75 percent. 62. Key measures tracking IDA financial sustainability remained stable for FY18. The IDA administrative expense as a share of operational revenues (IDA Budget Anchor) was around 102 percent in FY18, slightly higher than the RMS performance standard of equal to or below 100 percent - an indication of IDA’s expansion during the first year of the IDA18 cycle with increased revenue from IDA scale-up expected to materialize with a lag; the Budget Anchor for IDA is expected to fall below 100 percent from FY19 onward. 63. The IDA portfolio supervision costs are projected to slightly increase. The total administrative Bank Budget per $ billion portfolio under supervision (i.e., Bank Budget to Portfolio Volume Ratio) reached US$12.1 million in FY18, compared to US$12 million reported in FY17. This reflects the stable, long-term portfolio dynamics (timing of exits versus entries to - 28 - the stock of projects under supervision, and efforts underway to contain portfolio growth and make it more programmatic). 64. IDA’s Proactivity Index, a key measure of the actions taken to resolve critical portfolio problems, increased in FY18. The index reached 79.9 percent in FY18 compared to 73.9 percent reported back in FY17. For FCS, the index stood at 89.7 percent surpassing the IDA18 performance standard of 80 percent. Advancing Special Themes 65. Notable results were achieved in FCS through IDA-supported operations in FY18. People receiving essential health, nutrition and population services reached almost 18 million. Almost 8 million new beneficiaries were served by social safety net programs (primarily in Yemen), more than three million people provided with access to improved water sources and sanitation services, and more than a million of people with access to new or improved electricity service. About 600 thousand people were beneficiaries of job-focused interventions of IDA through labor market programs, agricultural assets and services provided to farmers, financial services, and education. 66. Climate change considerations continued to be systematically integrated in IDA and through IDA’s knowledge work operations. In line with the IDA18 policy commitments, all IDA country programs and operations are screened for climate risk and include appropriate measures to address any such risks. In FY18 alone, there were 134 IDA-supported operations (of which 34 in FCS) with climate change co-benefits (equivalent to about $6.8 billion); there were also 85 Advisory Services and Analytics (ASA) products conducted in IDA countries including climate change considerations. Of these, 28 are focused on adaptation, 10 focused on mitigation, and 47 included both adaptation and mitigation. Nineteen percent of all completed ASA tasks in IDA-eligible countries during FY18 addressed climate change issues. 67. IDA investment projects also contributed to reducing greenhouse gas (GHG) emissions. Green House Gas accounting has been applied to IDA investment lending operations in key sectors42 approved during FY18. As a result, 48 projects are helping to reduce annual net emissions of about -5.243 million tCO2eq/year (-0.89 million tCO2/year in FCS). 68. More IDA countries are introducing legal changes supporting gender equality. As part of the measures tracking the implementation of gender considerations, the IDA18 RMS introduced a key indicator measuring the number of legal gender changes that increase gender parity over a 42 This includes IDA investment lending in Sustainable Development Global Practices (Energy & Extractives, Transport & ICT, Environment & Natural Resources, Social, Urban, Rural and Resilience, Water, and Agriculture) where agreed GHG accounting methodologies exist. 43 The Net Greenhouse Gas (GHG) Emissions indicator is based on an ex-ante estimation performed during project preparation using World Bank approved GHG accounting methodologies. The indicator value is negative if the project is reducing emissions, and positive if the project is increasing emissions. Net GHG emissions at the portfolio level are calculated as sum of project net emissions. - 29 - two-year period. According to the 2018 edition of Women Business and the Law 44, a total of 42 legal changes (15 in FCS) were reported in 27 IDA countries during the last two years. Most legal changes that supported gender equality over the past two years occurred (in descending order) in the areas of facilitating access to credit (12) and securing a job (9) followed by the areas of protecting women from violence (7) and going to court (7). Countries that have implemented most legal changes are in Sub-Saharan Africa and include Congo, Dem. Rep. (3), Kenya (3), Tanzania (3), and Zambia (4). 69. IDA is addressing the gaps between men and women through a more systematic approach, in line with the implementation of the Bank’s gender strategy. The share of IDA operations demonstrating a results chain by linking gender gaps identified in analysis to specific actions tracked in the results framework increased slightly to 56 percent. For projects in FCS the percentage stood at 66 percent, surpassing the IDA18 RMS target of 55 percent. Separately, the number of operations that identified Gender-Based Violence (GBV) as an issue in the design phase and have responded with mitigating actions throughout the operation. Out of 204 operations in FY18, 25 projects (about 12 percent) provide specific actions to address GBV. Most of such operations were implemented in the education and HNP sectors in the Africa region. 70. The ambition of the JET theme is being reflected in IDA’s more deliberate approach and IDA18 PSW support to the Rikweda Fruit investments that aim to have a transformative Processing Company in Afghanistan, impact on the ground. The JET theme has US$3.1 million – increasing exports of introduced a more purposeful approach for IDA locally-produced raisins by supporting investments to target the areas for job creation and processing plant and integrating local economic transformation. The special theme is more farmers into structured a supply chain. embedded in the country strategies and in IDA’s intervention at the regional level. Increasingly, the WBG joint interventions through the MFD framework including the PSW45 are supporting efforts to address challenges from both public and private sector sides. Quality analytical work and continued dialogue with partners are informing IDA support. 71. In FY18 alone there were about 9 million beneficiaries reached by interventions contributing to the jobs agenda in operations funded by IDA. Of these, half a million were in FCS and 2.5 million were female beneficiaries. This is mostly driven by figures reported from agriculture, education, and social protection projects. These jobs-focused interventions directly contributed to the IDA jobs agenda by either creating more, better, and/or inclusive jobs. 72. The RMS placeholder in Tier III for tracking economic transformation in IDA countries has been defined and methodology for its calculation formally developed. The new 44 The indicator covers legal changes taking place across seven indicators as measured by the Women, Business and the Law dataset: accessing institutions; using property; getting a job; providing incentives to work; going to court; building credit; and protecting women from violence. 45 IFC’s Anticipated Impact Measurement and Monitoring (AIMM) assessment system estimates the development impact of IFC projects, including those supported by the PSW. - 30 - indicator has been defined as the “share of IDA Country Partnership Frameworks (CPFs) which reflect at least one of the following four principles underpinning economic transformation: (i) sectoral productivity; (ii) value chain expansion; (iii) increased productive capital stock or investment in energy, transport, manufacturing or services; and (iv) export sector output/value added or trade facilitation.” Based on the assessment, six46 out of the eight of the CPFs analyzed (75%) were in the Africa region and have at least one objective addressing challenges related to Economic Transformation. The most common dimensions were Sectoral productivity and Export sector output/value added, and trade facilitation. 73. IDA countries performed well on key measures of governance and institution building. Twelve out of 15 countries with the Bank providing support on tax issues showed an increase in the number of registered taxpayers. The indicator, a key measure of domestic resource mobilization, reflects the countries that have increased their number of registered taxpayers to strengthen the base for revenue collection compared to their 2014/2015 level. On a separate measure, 18 IDA countries operationalized reform commitments towards the Open Government Partnership (OGP) agenda to strengthen transparent, accountable, participatory, and inclusive governments. The OGP is a multilateral initiative that aims to secure concrete commitments from governments to promote transparency, empower citizens, fight corruption, and harness new technologies to strengthen governance. D. ENHANCING OPERATIONAL SUPPORT: EFFECTIVE IMPLEMENTATION CAPACITY 74. Implementing the significantly scaled-up IDA18 effectively requires strengthened capacity and resources for operational teams and clients – particularly to support project preparation and supervision, presence in FCV countries, and simplification for processing access to windows. Operational design and implementation support has been an important issue that Management is paying particular attention to with a focus on key tools and priority areas such as enhancing FCV support. 75. Expansion and enhancements to the Project Preparation Facility (PPF) supports clients that lack resources to adequately prepare operations. In January 2017, the Board approved the following two important changes to the PPF (i) an increase in the commitment authority delegated by the Board to World Bank Management from US$290 million to US$750 million, marking the first increase in 20 years; and (ii) the introduction of new flexibilities in accessing the PPF through a “programmatic” approach that allows a single Project Advance (PA) to support multiple operations under preparation and/or to strengthen core government functions critical to the implementation quality of the country portfolio. The PPF continues to provide critical resources to government counterparts to prepare operations in the pipeline, whether it is to undertake key technical design studies, develop safeguards instruments, undertake stakeholder consultations, upgrade fiduciary capacity, develop procurement documents, put in place an M&E system, prepare an operational manual or set up a Project Implementation Unit (PIU). The Bank team has prepared a new Procedure, Guidance, templates, dashboard, and is offering BBLs and operational clinics to raise awareness and better equip task teams in accessing the PPF. (Box 3 below outlines key trends in PPF usage and support to clients). 46 Tanzania, Niger, Guinea, Benin, Mauritania and Burkina Faso. - 31 - Box 3. Expanded Use of Project Preparation Facility (PPF) Helps Strengthen Implementation Capacity in IDA Countries, Particularly in Africa Current PPF usage has increased nearly 50 percent from the pre-2017 Board approved changes. Two of the six regions (Africa and East Asia) have had exceptional demand for the PPF that has necessitated an increase in their regional allocations from the reserve. The Africa region now accounts for roughly half of the PPF allocation. The South Asia region has also been steadily using their regional allocation and is likely to need an increase in the future. The vast majority of the nearly 130 currently active Programmatic Approaches (PAs) are used for IDA credit or IDA grant terms – helping to prepare downstream operations in the areas of Agriculture; Education; Energy; Environment; Finance, Competitiveness and Innovation; Governance; Health, Nutrition and Population; Poverty, Social Protection and Labor; Social, Urban, Rural and Resilience; Transport, and Water. For IDA countries, there are three PAs under implementation - Micronesia, Kiribati, and Tonga - to help prepare the IDA18 pipeline and specifically support small states. In Micronesia, for instance, a US$5.5 million PA aligns with the entire IDA18 country portfolio. The CMU felt that this wholesale approach would allow for administrative efficiencies over processing PAs for individual operations while also allowing any technical complementarities to be leveraged among preparation activities for different projects. It is likely that the uptake in programmatic PAs will increase particularly in small states. 76. The new Multiphase Programmatic Approach (MPA) adds important operational flexibility to allow IDA to support Bank clients in structuring a long, large, and/or complex engagement as a set of smaller linked operations. Approved by the Board in July 2017, the MPA provides better opportunities to focus on chronic and strategic development issues, which require consistency in IDA support, provide a programmatic platform that other partners and donors can join, and where learning and quick adaptation to changing situations is needed, especially in capacity constrained and fragile situations. In FY18, the Board of Executives Directors approved two IDA MPA proposals: the Madagascar Improving Nutrition Outcomes Program, which aims to reduce stunting among children by half over the next decade (US$200 million); and the first IDA regional MPA, the West Africa Unique Identification program for regional integration and inclusion, which focuses on providing foundational identification to six ECOWAS member countries over the next decade (US$317.1 million). In the immediate IDA pipeline are three more MPAs focusing on reducing infant mortality, reducing chronic malnutrition and under five mortality in Côte d’Ivoire, the Marshall Islands and Nigeria. 77. Sustained attention has been placed on ensuring commensurate budgetary provisions and staffing resources to support the IDA18 scale up, particularly in key priority areas. Resources have been directed towards the preparation and delivery of the IDA18 scale up, especially vis-à-vis FCV – and in alignment with other related strategic priorities for the institution, including “Forward Look” focus on creating markets, as well as advancing climate action, gender, and crisis response: • As a result, FY18 budget allocations continued to shift resources towards operations and client facing services, particularly for IDA countries and also reflecting increased supervision, monitoring, and fiduciary requirements. Overall work program allocations to IDA countries increased from US$359 million in FY17 to US$420 million in FY18 – an increase of US$61 million (17 percent), which brought the IDA-funded share of the Bank’s Country Engagement work program from 53 percent to 57 percent. To support the higher cost of operating in FCV-affected countries, the Bank expanded the share of FCV in its - 32 - Country Engagement budgets from 18.3 percent in FY17 to 19.4 percent in FY18. Sustaining these trends and successful IDA18 delivery remains a key priority for FY19-21 budget plans. • The WBG increased staffing levels in IDA FCS and RMR locations by 13 percent through end-September 2018, and, while progress must be accelerated, the Bank is on track to meet its IDA18 FCS footprint objective.47 Costs for security and other institutional, governance, and administrative support have also increased correspondingly. More focused attention has been given to locally recruited staff in these locations through new compensation and benefits tools. The employment value proposition for staff in FCS locations has been strengthened through more proactive career management, enhanced learning and development opportunities, focus on health and safety, and targeted rewards for staff contributing in high priority areas. Focus on enhancing FCV and small states capacity 78. To meet IDA’s heightened ambitions to scale up support to clients facing FCV risks, the Bank has undertaken a number of measures to improve the Bank’s staffing, operational policies and partnerships. First, important progress has been made in strengthening the Employment Value Proposition for staff working in and on FCV. While such efforts have facilitated some progress in increasing its staffing footprint in FCS and countries with significant risks of FCV, as noted above, further progress needs to be accelerated. Also, several adjustments to the World Bank policy framework have been put in place, including the PPF and MPA initiatives described above which have facilitated IDA’s work in Afghanistan and Côte d’Ivoire. Third party monitoring and innovative use of ICT methods are being scaled up to contribute to effective programming, supervision and monitoring in constrained environments.48 79. The Bank is taking steps to enhance its work in small states that often face capacity constraints, which raises challenges for implementing the scaled-up IDA18. This includes adopting simpler project designs, utilizing greater flexibility in procurement policy, and building in Contingent Emergency Response Components (CERCs) to give clients greater flexibility to avail of IDA during emergencies. Additionally, the programmatic approach is used for core country capacity building, pipeline development and multi-project advances. Addressing implementation risks, including debt sustainability 80. Heightened attention and support is being placed on helping teams and countries strengthen debt management capacity. With 19 percent of the projected FY19 IDA pipeline in countries at high risk of debt distress (up from 13 percent in FY18), key activities to address rising debt sustainability concerns include: (a) enhanced country dialogue and programming (including through DPOs), increasingly mindful of clients’ deteriorating debt situations and balance sheet implications; (b) the WB/IMF LIC-DSF prepared in FY18 has been rolled out as of July 1, 2018; 47 As of end-September 2018, there had been a net increase of 85 staff based in IDA FCS and RMR countries, representing just over half of the IDA18 objective to increase staffing by at least 150 net staff. See FCV IDA18 MTR paper for greater detail. 48 See FCV IDA18 MTR paper for greater detail. - 33 - (c) operational teams are stepping up technical assistance on debt management; (d) studies are being conducted on debt to inform Bank policies, including the NCBP; and (e) a separate technical paper was prepared for discussion with IDA Deputies and Partners at the Annual Meetings in October.49 81. Implementation of the new Procurement Framework is helping to mitigate fiduciary risks more effectively while lessening operational burden for clients. The framework (effective since July 2016) is predicated on a fit for purpose approach, enabling the Bank to customize procurement methods and approaches to suit operational context and project needs, relevant market dynamics, and client capacity to reduce the burden on borrowers, mitigate risks more effectively, and help deliver development results more efficiently. The Project Procurement Strategy for Development (PPSD), a cornerstone of the framework, is used to identify the specific procurement arrangements and sets out the degree of project-specific training and capacity building. In line with IDA18 focus, specific needs for capacity building are prioritized – particularly in situations of crisis, fragility, conflict or violence, Small States and IDA countries. Adequate funding and hands-on, expanded implementation support is provided where needed to help expedite procurement arrangements through (a) drafting procurement documents; (b) identifying strengths and weaknesses of bids/proposals; (c) observing dialogues and negotiations with bidders/proposers/consultants; and (d) drafting procurement reports and contract award documentation. In addition, borrowers may select UN Agencies directly where their expertise or rapid mobilization on the ground is critical. 82. Alternative procurement arrangements in collaboration with partners have successfully been used to respond to the crisis situations. Utilizing the new options available in the Procurement Framework, the Bank team supporting the humanitarian response in Yemen utilized UN Agencies in seven operations to rapidly respond, permitting them to use their own procurement arrangements/existing frameworks to efficiently deploy goods, and services on the ground quickly. A similar approach was approved for the Somalia Emergency Drought Response and Recovery Project allowing the Bank to rely on the procurement policies and procedures of the Food and Agriculture Organization, and the International Committee of the Red Cross (ICRC). Management is also exploring alternative procurement arrangements to engage ICRC and other stakeholders in the implementation of IDA country funds, e.g., in South Sudan. 83. The Bank is also making progress on Alternative Procurement Arrangements (APA) with other Multilateral Development Banks (MDBs) to increase efficiencies for borrowers. A model template to enter into APA agreements and set procurement aspects when co-financing has been agreed with the African Development Bank (AfDB), the Asian Development Bank (ADB), the InterAmerican Development Bank (IADB), the European Bank for Reconstruction and Development (EBRD), and the Council of Europe Development Bank (CEB). Bilateral agreements are being finalized with each Bank and this model template has been tested and used in two APA agreements. 84. The launch of the Bank’s new Environmental and Social Framework (ESF) will be a major step forward in safeguard risk management. Approved by the Board in August 2016, 49 See Annual Meeting note on “Debt vulnerabilities in IDA countries.” - 34 - the framework is expected to become operational in FY19. It embraces a modern, fit-for-purpose approach, making important advances in the areas of transparency, accountability, nondiscrimination, and public participation. Strategic engagement with the Board and effective partnerships with institutional partners, such as leading IFIs, bilateral development partners, UN agencies and civil society organizations will support the ESF launch, ensuring harmonized E+S risk management plans – with a number of bilateral partners having indicated that they will adopt the ESF as their own system. Extensive launch preparation efforts include the development of a comprehensive set of procedures, guidance materials, tools and templates; training of 1,000+ Bank staff (well under way and continued in FY19-21); borrower and stakeholder workshops to raise awareness and identify capacity building needs – particularly focused on national systems and institutions in IDA and FCV environments. Furthermore, operational processes, systems and tools are being strengthened and streamlined, and a new monitoring system is under implementation to support integrated E+S risk management on IPF projects in the Bank Operations Portal with automatic data updates for supervision, performance and corporate reporting, and replacing multiple stand-alone risk monitoring systems. Making Bank operations more streamlined and agile 85. The Agile Pilots initiative aims to (i) increase client value, (ii) institute better ways of delivering operations, and (iii) enhance staff satisfaction. The Agile Pilots program was launched in September 2016. After analysis and discussion about the Bank’s instruments and their respective policies in several piloted areas, participants identified multiple areas of improvements to help achieve the said goals. More than 80 projects in the IDA pipeline (with estimated IDA financing of more than US$14 billion) are testing one or more Agile interventions. A number of the initiatives tested by the Agile pilots have been rolled out, including: (i) simplified Investment Project Financing (IPF) Implementation Completion and Results Reports (ICRs); (ii) the Multiphase Programmatic Approach (MPA); (iii) agile SCD and CPF pilots; (iv) simplified IPF Project Appraisal Documents (PADs); and (v) a streamlined restructuring of Accountability and Decision-Making (ADM) frameworks. In addition, other initiatives are expected to be rolled out in FY19, including: (i) simplified PforR ICR; (ii) delegated budget authority for selected projects; and (iii) simplified documentation for meetings and missions. These initiatives will help teams deliver operations more efficiently, especially in IDA countries. 86. Simplification of IDA Windows has been a key priority: IDA18’s introduction of several new financing windows provides important new financing opportunities for IDA clients, and creates incentives outside national IDA allocations to advance key development challenges and priorities. At the same time, different requirements and processes have increased the demands on Bank operational teams. With experience gained from early IDA18 implementation, Management has focused on streamlining procedures to eliminate unnecessary administrative burdens while ensuring prudent stewardship of IDA resources, through enhanced clarity of information and implementation guidelines, and reduced clearance requirements and corporate reviews, where appropriate. Overall, simplification steps sought to establish greater consistency in approach – including determining allocations, agreeing project selection, and aligning procedures across windows and to regular Bank project cycles as much as feasible. Such streamlining is being implemented for the SUF, CRW, RSW, RMR, TAR and Regional Program (see details in Box 4). - 35 - Box 4. Simplification of IDA Windows/Regimes Enhancing information management: A new internal dashboard provides interactive information on allocations, utilization, and available IDA resources, to improve monitoring and tracking of ongoing operations and commitments vis-à-vis IDA allocations (through the PBA and special windows) within the replenishment cycle. Reducing clearance requirements: Guidelines on the use and access of IDA windows have been streamlined and procedures aligned with regular Bank processing cycles where applicable, for example, by reducing clearance/corporate reviews. For many windows, Technical Briefings will only be held upon the Board’s request rather than being a default requirement. Specific Eligibility Notes will go to the Board for information. Additionally: - Scale-Up Facility (SUF): Moving to a single corporate clearance point, and with focused monitoring undertaken by operational development effectiveness units. - Crisis Response Window (CRW): All CRW-funded operations to be approved on an absence-of-objection basis, with the option for the Board to call for a discussion if needed. - Refugee Sub-Window (RSW): Clearance to be given at concept review stage, with request for further information at decision stage if needed. - Turnaround Regime (TAR): Eligibility Notes to be combined with country strategy documents, when timing allows, to minimize the burden of country teams. - Regional Program: To improve predictability, confirmation of project financing as early as possible (at project concept review) – as long as adequate, robust justification is given. Greater consistency in approach across IDA windows management E. BUILDING ON SYNERGIES: PARTNERSHIPS AND COLLABORATION 87. Meeting the World Bank Group’s ambitious Twin Goals and the Sustainable Development Goals (SDGs) requires strong partnership with all stakeholders. One of IDA’s core strengths is partnerships and how we work with other bilateral and multilateral agencies and national institutions, the private sector, local NGOs and CSOs to advance common priorities and pressing development needs. In IDA countries, the relationship with the United Nations (UN) is of particular importance. The World Bank Group and the United Nations collaborate and build on complementary strengths in many areas of work that support the SDGs; while scaling up the partnership in several of IDA’s special thematic areas: Climate Change; Fragility, Conflict and - 36 - Violence (FCV); and Gender. In April 2018, the WBG and UN signed a Strategic Partnership Framework (see Box 5). Box 5. WBG and UN Signed a Strategic Partnership Framework In April 2018, the WBG and UN signed a Strategic Partnership Framework to express a firm commitment to cooperate in four key strategic areas: (i) finance and implementation support to help countries reach the Sustainable Development Goals; (ii) decisive global action on climate change; (iii) joint work in post-crisis and humanitarian settings, and; (iv) harnessing data to improve development outcomes. In addition, many IDA operations, particularly in fragile countries, are being implemented by UN agencies. Against this backdrop – and in line with the Addis Ababa Action Agenda that lists financing, data, capacity building, and technology as key means of implementation for the SDGs – the UN remains a critical partner in IDA18 implementation. A few highlights in the partnership under the auspices of IDA18 include: • Climate Change. To mitigate the disconnect between the demand for climate action with the supply of finance, the Bank Group and UN jointly convened the platform Invest4Climate. The platform brings together a variety of stakeholders to identify and facilitate transformational investments in IDA countries to support climate action. Systematically crowding-in multiple sources of finance has informed the UN’s thinking and will be an element of the Secretary-General’s 2019 Climate Summit. The Bank Group has further collaborated with UN Environment on the Roadmap for a Sustainable Financial System. The research sought to create a financial system that is fit-for-purpose and integrates sustainability considerations into operations. • FCV. Recognizing that the number of the world’s extreme poor living in countries affected by FCV is likely to increase, resulting in greater accessibility challenges, the Bank Group has also recognized the importance of forging partnerships with other key international partners to secure better access to people in FCV contexts. Against the backdrop of the “Grand Bargain” – a network of multilateral and bilateral public, private, and NGO stakeholders – the humanitarian-development nexus provides growing opportunities to strengthen the partnership with the UN at the global and country levels. IDA18 Partnerships and Collaboration 88. In scaling up and doing things differently, IDA18 places particular focus on external as well as internal partnerships at both strategic and operational levels – from strengthened global coordination and frameworks to joint regional initiatives, sector collaborations, and local cooperation on project implementation in countries. 89. The Third International Conference on Financing for Development defined a new global framework for financing the SDGs. The framework is of particular relevance to IDA countries which rely heavily on ODA flows. In fact, the IDA18 replenishment can be considered a key part of the global response to this need. The IDA18 package responds to the calls of the international community for the World Bank Group to innovate and do everything it can to be a critical implementation agent for achieving the SDGs. 90. At the operational level, the Bank has spearheaded an effort to systematize standard forms of agreement for Borrowers to use when contracting UN agencies under IPF projects. This will significantly impact the ease with which the Bank Group can partner with UN agencies, given that approximately 90 percent of the Bank’s financing of activities and projects through UN agencies is done on the basis of standard agreements. So far, eight UN agencies have signed a Standard Agreement with the Bank Group, with nine more UN agencies planned for FY19. - 37 - 91. Across the WBG, the new IDA Private Sector Window facilitates close Bank-IFC- MIGA collaboration to enhance private sector engagement and mobilization. Bringing WBG teams together, IDA can help IFC and MIGA close transactions in risky markets and helps operationalize the MFD approach. For instance, in Afghanistan, IFC, MIGA and IDA joined forces to finance a raisin factory processing plant, in line with other support from IDA to the Government of Afghanistan to develop the agriculture and agri-business sector. In West Africa, IFC and IDA teams worked closely together to invest in housing financing and, along the way, contribute to building the local currency capital market. 92. Partnerships with other development partners, like in the case of Trust Funds, promote parallel financing for IDA countries and support alignment with IDA priorities when such resources are used to co-finance IDA projects. Trust funds managed at the World Bank complement IDA resources in two important ways: (i) overall, two thirds of Trust Funds disbursed to recipient countries find their way to IDA countries – through projects they execute (RETFs); (ii) more importantly, about 40 percent of these RETFs are used to officially co-finance IDA financed projects (see Figure 9 below). Figure 9. Recipient Executed Trust Funds, IDA16-18 93. Across IDA priorities and Operations, the Bank Group is working closely with development partners – strategically and on the ground – to effectively implement the IDA18 agenda. See Annex 5 for partnership details and examples, at corporate and project levels, across IDA18 Special Theme areas. F. MANAGING IDA18’S NEW FINANCING FRAMEWORK: SUSTAINABLE OPTIMIZATION 94. IDA remains in strong financial position and successfully introduced capital market access this year. With its triple-A rating, IDA’s inaugural April bond issuance – the first in the institution’s nearly 60-year history – was a resounding success: 4.5 times oversubscribed, raising - 38 - US$1.5 billion, and priced at par to IBRD. Thinking continues on further optimizing the use of IDA’s balance sheet.50 95. The new financial hybrid model has been introduced successfully. The first IDA bond issuance marked the successful launch of IDA’s borrowing program, with an investor orderbook of US$4.6 billion (versus the originally intended bond size of US$1 billion) representing 110 investors from 30 countries. IDA will continue establishing its presence in the capital markets and issue bonds as and when needed for liquidity needs following the disbursement profile of IDA18. Discussion with investors highlighted the importance of IDA’s impact story, strong results achieved on the ground, transparency and robust results monitoring and reporting system. Socially Responsible Investors around the world showed strong support for IDA, representing more than 1/3 of investors participating in IDA’s inaugural bond and with more than US$600 million of the US$1.5 billion allocated. 96. IDA’s new hybrid model relies on strong contributions from donors and access to capital markets. Donor contributions continue to be a critical element supporting IDA’s financial model to preserve focus on concessional financing and support IDA’s ability to leverage its equity as a triple-A rated issuer. While in the past donor contributions were a source of cash to fund disbursement of new commitments in each replenishment, in the new model donor grant contributions play a dual role of (i) supporting concessionality of IDA’s financing, and (ii) providing additional risk capital to support IDA bond issuances. The success of IDA18 was underpinned by the coalition of strong pledges from 55 donors and timely submission of their Instrument of Commitments (IoCs) and payments. To date, 48 out of 55 partners have submitted their IoCs representing approximately 99 percent of the IDA18 pledged amount. • IDA18 replenishment effectiveness was achieved slightly ahead of schedule on November 27, 2017, when 60 percent of partner IoCs and concessional loan agreements were received. As of June 30, 2018, 48 out of 55 partners submitted their IoCs to IDA18 for a total amount of SDR16.4 billion, out of SDR16.6 billion pledged. Out of the IDA18 Concessional Partner Loan (CPL) envelope, US$5.0 billion has already been signed and US$0.2 billion is yet to be signed. • IDA18 commitment authority includes SDR 2.9 billion for MDRI, which relates to the FY26-28 commitments that partners are expected to unqualify during the IDA18 replenishment period. Of this amount, SDR2.7 billion has become available for use in IDA18. • WBG Transfers. IBRD and IFC have historically demonstrated their strong commitment to support IDA via income transfers. In the new model, transfers from IBRD and IFC contribute directly to IDA’s income and support grant financing provided to IDA clients as well as improve IDA’s overall financial capacity. For the IDA18 period, the volumes of IBRD and IFC transfers are calculated annually based on the income allocation formula adopted by the two institutions. For FY18, the transfer amounts by IBRD and IFC equaled US$123 million and US$80 million respectively. As noted above, the IDA18 formula for 50 See further details in the separate IDA18 MTR Finance paper “IDA’s Long-term Financial Sustainability: Review of Elements of IDA’s Financing Framework and Options for Further Refinements of IDA’s Financial Model”. - 39 - IBRD transfers to IDA was made a permanent part of the recently agreed IBRD capital package, enabling cumulative transfers to IDA estimated at US$7-8 billion over FY20-30. 97. The IDA bond issuance was preceded by extensive work to update IDA’s financial and risk management framework to ensure that policies ensure sustainable implementation of the new model and are easily understood by investors, rating agencies and regulators. Preparatory activities for the first transaction also included drafting legal agreements for IDA’s bond issuance program and setting up IT systems that IDA needed. IDA continues to work with rating agencies and regulators, providing all necessary information for rating assessments and to get regulatory approvals and exemptions similar to IBRD. 98. Continued financial optimization and innovation remains a key focus for Management. The flexibility of the new financial model allows IDA to continue expanding the range of financial products, to explore opportunities to offer risk management products to IDA clients helping address their development needs, as well as to support the MFD approach adopted by the World Bank Group to crowd in more private sector financing. Management is also looking at continuous refinements to IDA’s financial model, including additional measures to moderate IDA’s sensitivity to interest rates that could increase IDA equity’s resilience to interest rate risk and, as a result, provide greater stability and predictability in IDA’s financing to clients. III. ISSUES FOR CONSIDERATION: MANAGING IDA RESOURCES FOR GREATEST IMPACT 99. Going forward, it will be important to balance high degrees of demand and complexity. Record levels of FY18 lending commitments and robust operationalization of IDA windows reflects strong demand for the IDA18 package. At the same time, the IDA18 agenda is large and complex – making it difficult to predict exact resource utilization needs accurately at the start of a three-year period. In line with SDG ambitions and MFD commitments, IDA18 represents a significant scale up in aid volume, complexity, and scope for IDA to manage: • Unprecedented size: Financing of US$75 billion enlarged the IDA funding envelope by 50 percent compared to the previous replenishment. • Increased number of windows/regimes: The number of windows/regimes expanded to nearly ten now. Almost a third of IDA18 resources are allocated outside country allocations (core PBA) (see Table 2 above). • New business territory: With the creation of the Refugee Sub-Window, PSW and SUF (since IDA17), IDA is spearheading novel development approaches and funding modalities that are often still unpredictable and uneven in demand/capacity as they are being introduced. • Greater uncertainty in the project pipeline: Shifting a large part of resources to fragility and crisis response (incl. FCV doubling, expanded CRW) introduces a much higher degree of uncertainty to IDA resource planning and use. - 40 - 100. Feedback from IDA Partners on potential adjustments to the IDA18 framework is critical to successfully respond to client needs and complete this ambitious agenda. Anticipating every possible scenario resulting from changes in demand, implementation capacity, and global developments at the outset of the replenishment is nearly impossible. For most effective use of resources throughout the replenishment, it is important to (i) enhance existing allocation flexibility, and (ii) strengthen the scope and impact of allocations where needed – with a particular focus on providing targeted FCV support, using resources to their full potential, and ensuring effective implementation capacity. Prior sections throughout this paper, and individual MTR papers on specific areas of IDA18 implementation, outline the details of identified redeployment potential and proposed policy/structural improvements in the IDA18 framework. This section provides an overview of Management’s recommendations. Following endorsement/discussion with IDA Partners, Board approval will be sought on proposals where necessary. Enhance allocation flexibility 101. Management is of the view that enhanced flexibility in managing allocations is important to maximize the use of resources in a given IDA cycle. IDA18 progress and emerging lessons confirm IDA’s effective model for delivering finance at scale, success in meeting ambitious policy commitments, and leadership in championing innovative development solutions. Responding to client demands and successfully implementing IDA’s more complex allocation and policy framework requires room for course correction: to utilize resources of the ambitious IDA18 envelope to full effect. While agreed policies, commitments and priorities, as well as financial parameters are firm guideposts to implementing IDA replenishments, flexibility is required to deploy and adjust resources where needed to implement this broad agenda with maximum impact. 102. Flexibility to manage resource allocations already exists, notably for the IDA core funding envelope. An existing set of comprehensive rules governs the management of re- allocations within the IDA core envelope including: options for countries to front-/backload parts of their national allocations; re-allocations within and across regions in the last year of a replenishment; and re-deployment of exceptional regime funds under changed country circumstances. Further, allocations within windows are by definition rather flexible and Management has received support for specific re-allocations across windows at past MTRs (e.g. the transfer of unused CRW funds to the Regional program and carry over to IDA17 at the IDA16 MTR,51 or the top up of CRW resources and the creation of the SUF at the IDA17 MTR).52 103. To manage funds for greatest impact, Management proposes to take a strategic approach across the IDA portfolio, including flexibility in the allocation of non-core IDA resources. Given the difficulties of anticipating all funding needs – and the high opportunity costs of having IDA resources sit idle when IDA18 was designed to help achieve the SDGs – it would be prudent to enhance existing flexibilities in managing the allocation of replenishment resources. Deploying funds where they are needed the most and can be the most effective is critical to ensure sustained, successful delivery. Management is therefore proposing to exercise enhanced flexibility for re-allocating existing IDA resources – including non-core funding (provided across IDA Windows and special regimes) and in year two and three of a replenishment. 51 See IDA16 Mid-Term Review Summary Note. Delivering Development Results. 52 See IDA17 Mid-Term Review. Enhancing IDA’s Financial Support in IDA17. Proposal for a Scale-Up Facility. - 41 - 104. Agreed allocation principles would assure the integrity of the agreed replenishment framework. To guide flexibility in allocating IDA resources throughout a replenishment and across core and non-core funding, Management proposes a systematic, principles-based framework to assure that enhanced allocation flexibility – and any resulting resource re-allocations – fully adheres to the replenishment framework, balance overall allocations, and not skew intended focus or purpose of IDA funding. Further, financial implications of any redeployment (particularly changes in non-concessional volumes) would be fully tested from a financial perspective to confirm the continued robustness and sustainability of the overall financing framework, for IDA and its clients. Principles would guide reallocation decisions to (i) optimize the use of IDA’s commitment authority; (ii) keep the overall balance of IDA allocations intact; (iii) uphold existing allocation rules; and (iv) maintain broad general financial directions within the requirements of IDA’s capital adequacy framework (see Table 3 below). Table 3. Principles for Flexibility in Managing IDA Resource Allocations 1. Optimize use of commitment authority • Avoid leaving unallocated resources • Make re-allocations as early as possible (as early as the 2nd year of implementation) to enable quality planning and preparation – balanced with the original purpose to use the resources as intended (incl. delivery of IDA policy commitments) 2. Keep the overall balance of IDA allocations • Share of overall unearmarked funding for country programming (PBA core allocations) will not drop below that agreed at the start of the replenishment • Maintain ambition to doubling FCV • Balance supply and demand of windows among the windows themselves and transfer excess resources back to the PBA 3. Uphold existing allocation rules • Additional resources to the IDA core envelope would be allocated through existing process • Additional resources to Windows/non-core funding would go through eligibility notes and criteria in place 4. Maintain general financial directions • Preserve overall focus on concessionality in the replenishment framework • Broadly maintain relative levels of concessionality across windows, targeting redeployments within similar windows 105. Any redeployment process would be undertaken with regular Management review and governed through regular reporting to IDA Partners and the Board: a) Decisions and any related release of resources would be made in close consultation with Operations teams throughout replenishment implementation, and confirmed at the bi- annual (typically June/December) Management Seminars on IDA Replenishment Implementation; - 42 - b) Updates to long-term projections of the IDA financing framework, including any changes in projected allocations, would be presented at MTR (for the ongoing replenishment), and the June meeting (for proposed scenarios of the upcoming replenishment – depending on decisions in June, the October replenishment paper may present revised projections for updated scenarios). Updated allocation projections would also be incorporated in the regular assessment of IDA’s capital adequacy projections and reporting on IDA Commitment Authority; and c) Report back to IDA Partners on any adjustments would be provided through updates at the MTR and the Annual/Spring Meetings ‘IDA Day’ before conclusion of the replenishment period (including associated Board briefings) and be reflected in the final Replenishment Retrospective. 106. Management and operational teams have paid close attention to delivery and client demand, identifying opportunities for adjustment to sustain or scale up progress. Although delivery is strong with the record US$24 billion in FY18 commitments and robust progress underway in all windows, implementation to date (as described above in Section IIA) indicates areas where allocations are under-utilized and other areas with increased demand and/or capacity to absorb additional resources. Potential adjustments include: • Expected surpluses in the CRW and Transition Windows, as well as the TAR Syria Set- aside. Compared to historic trends, present pace of CRW commitments suggests that US$1-1.5 billion could be left untapped. Given the recent IBRD Capital Package agreement, transition support for current graduates is proposed to be reduced by about 1/3 (in the range of US$0.9-1.3 billion). In addition, it is possible that up to US$0.5 billion of the PSW may not committed by the end of IDA18. Finally, as conditions are unlikely to be met to fully utilize the US$1 billion notionally set aside for Syria within the TAR, Management proposes to reallocate US$600 million. Of this, US$200 million is proposed to be used to benefit the Syrian people in Lebanon and Jordan.53 The remaining US$400 million would be reallocated along the principles outlined above and consistent with the TAR conditions set for the original notional set-aside for Syria. • Prospective room to absorb resources under Refugee Sub-Window, SUF, and specific core/country funding needs. The Refugee Sub-Window is seeing substantial uptake, with close to US$450 million approved in FY18, a total of US$1.5 billion allocated, and requests for further financing expected. The SUF has funded almost US$2.3 billion in FY18 and is seeing potential scope for financing additional transformational projects in IDA countries. In addition, given the escalating crisis in Yemen, with eight million people on the brink of famine, Management seeks endorsement of a special IDA18 allocation of US$400 million for the country, driven by the cost of maintaining the social safety net program, as well as the intention to maintain key institutions in the country. Finally, as described earlier, demand for core PBA resources is also very strong (see Table 4 below). 107. Reallocations within the ranges noted above would be consistent with the principles in Table 2 (if agreed with Participants). While the share of non-concessional resources is 53 See FCV paper Annex 2. - 43 - expected to be reduced somewhat, the balance with concessional resources would be largely maintained and will not affect the IDA18 focus on concessionality in a material way. Financial implications of re-allocation scenarios are expected to be minimal and will be fully tested for any redeployments to assure the continued robustness and sustainability of the IDA financing framework. IDA’s new financial model offers sufficient flexibility to accommodate changes in IDA18 allocations, with corresponding adjustments to be made in the future replenishments, if needed, to ensure compliance with IDA’s capital adequacy limits. Table 4. Indicative Ranges for Proposed IDA18 Reallocations across IDA Windows/Regimes (US$ billions) Potential Original IDA18 Allocation Deductions Concessional TAR, Prioritized for Syria ¹ 1.0 0.6 Crisis Response Window 3.0 1.0 - 1.5 Private Sector Window 2.5 0 - 0.5 Non-concessional Transitional Support 2.8 0.9 - 1.3 TOTAL 9.3 2.5-3.9 Potential Original IDA18 Allocation Additions Concessional PBA 51.8 1.05 - 1.50 Refugee Sub-Window 2.0 0.1 - 0.3 Regional Program 5.0 0.25 - 0.75 Syrian Refugees -- 0.2 (in Jordan and Lebanon) Yemen Special Allocation -- 0.4 Non-concessional Scale-Up Facility 6.2 0.5 - 0.75 TOTAL 65.0 2.5-3.9 ¹ Usage to be consistent with the conditions set for the original notional set-aside for Syria. Strengthen IDA’s impact through structural enhancements 108. Management is also exploring some structural enhancements to respond to client demand, reflect lessons learned from early IDA18 implementation, and ensure the most effective use of resources: - 44 - • Transition: As committed under IDA18, Management has reviewed a number of critical issues related to transition and seeks endorsement of: (i) retaining the suspension of the Contractual Acceleration Clause; and (ii) retaining the existing cap on large blend countries. In addition, endorsement is sought on a revision of the 1985 exception for small islands, which would imply that Fiji would become eligible for IDA. And looking toward IDA19, Management would like to explore: o prospects for graduation/transitional phase of IDA countries; o exploring exceptional access to the Regional Program and CRW for IDA recent graduates and small states under certain limited conditions; and o shifting in lending terms for those Small States once they reach a certain level of development (see Graduation Paper). • Private Sector Window: Reflecting early implementation lessons, Management seeks endorsement of, where appropriate, a programmatic approach to pool together risks for better impact and more efficiency (see PSW paper). • Refugee Window: Early experience under the window has raised operational challenges, leading Management to seek endorsement of a proposal to reframe the 100 percent grant exemption to provide 100 percent grants only to countries that experience a sudden massive inflow of refugees, defined as receiving at least 250,000 new refugees or at least 1 percent of its population within the last twelve months. In addition, endorsement is sought to increase the maximum allocation per country from US$400 million to US$500 million (see FCV paper). • IDA’s menu of support for the regional integration agenda in IDA19: o Regional Program: Building on the Program’s experience in supporting regional integration using IPFs, feedback is sought to explore expanding the instruments that the Regional Program could use to provide more results-based and policy-oriented support (i.e., through PforRs and DPOs) to further advance the regional integration agenda. Management proposes to develop guidelines over the remainder of IDA18 to prepare to pilot use of DPOs and PforRs in IDA19 (see Regional Program paper). o Support for IDA’s Regional Organizations: Feedback is sought on whether IDA should consider expanding its menu – within appropriate limits - of support by providing credits to regional organizations which have the ability to repay IDA credits. Beyond the grant envelope the IDA Regional Program currently provides to regional organizations, in some instances, regular IDA and SUF credits have provided targeted support on an exceptional basis to specific types of regional organizations to advance the regional integration agenda (e.g., IDA’s recent regular credit to CEMAC central bank institutions and SUF credit to BOAD). While the implications of more regular IDA lending to regional organizations without a sovereign guarantee would need to be carefully examined (see Regional Program and Scale-up Facility review papers), under appropriate circumstances – and within a framework underpinned by appropriate eligibility and creditworthiness criteria - IDA could expand its menu of support to regional organizations, which could further enhance the impact of IDA regional integration efforts. - 45 - • Crisis Response Window: Management seeks feedback on using CRW resources to support earlier response to slower-onset crises, such as food insecurity, arising from CRW-eligible events, like drought and food price increases (see CRW note). • Portfolio Efficiency: Management seeks feedback on allowing IDA graduates to restructure – on Blend terms – undisbursed IDA balances of concessional financing, so as to enhance the efficiency of IDA’s portfolio. 109. The following provides a summary overview of decisions needed at MTR. Issues requiring guidance for remaining IDA18 implementation and/or to enhance existing elements of the IDA framework are in the left column. Proposals for initial feedback at this stage – and to be further elaborated and discussed in future replenishment consultations – are in the right column. Table 5. Overview of Requested IDA18 MTR Guidance Decisions/Endorsement sought now Feedback to inform future consultations • Allocation management • Regional Integration o Flexibility to include non-core resources o Expand instruments for Regional Program: • PSW DPOs/PforRs o Delegate authority Programmatic approach o Clarify support to regional entities through Regional • Refugee Sub-Window Program and SUF o Update 100% grant exemption o Increase size of window • CRW o Increase the maximum country allocation from US$400 o Earlier response capacity million to US$500 million • Graduation • Yemen o Prospects for Graduation in o Special allocation IDA19 o Access to Regional Program • Syria and CRW for recent Graduates o Re-allocate some of the US$1 billion that had been and small states under certain notionally set aside under the TAR limited conditions o Shift lending terms for Small • Graduation / Transition support States once they reach a certain o Phase out Transition Support level of development o Continue suspension of acceleration clause o Retain cap on large blend countries o Revise Small island exception • Portfolio efficiency o IDA graduates to recommit undisbursed balances (on blend terms) - 46 - Annex 1: IDA18 Portfolio to Date – Key Statistics 1. The ten largest IDA clients accounted for 61 percent of total IDA18 commitments or US$16.5 billion. The top six countries have together received almost half of total IDA commitments. Figure A1.1. Top 6 IDA Borrowers: Commitments in the First Five Quarters in IDA18 (in the first five quarters) Figure A1.2. IDA18 Commitments by Sector to Date *Note that FY19 Q1 sectoral information is still under internal review and not yet available. 2. As of June 30, 2018, the undisbursed balance stands at about US$70 billion, a 17 percent increase from FY17. By instrument type, the undisbursed balance of PforR commitments are most pronounced, corresponding to 16 percent of the total IDA undisbursed balance in FY18, up from 9 percent in FY17 and 7 percent in FY16. PforRs generally disburse at a rate similar to IPF. The high undisbursed balance of IDA in PforRs is mainly due to the “young” age of the PforR portfolio, reflecting the recent rapid growth in PforR commitments. The disbursement ratio (of IPF) is also expected to slow during the IDA18 period, reaching 19.9 percent in FY18 compared to 20.6 percent in FY17 and 19.3 percent in FY16. - 47 - Figure A1.3. IDA Undisbursed Balance (US$ billion) - 48 - Annex 2: IDA18 Windows The suite of IDA18 windows is helping to spearhead innovative approaches, fostered WBG collaboration, respond to important country needs, and scale-up programs targeted to address key challenges: 1. The Regional Program, expanded to US$5 billion (3.6 billion SDR), is reflecting the growing demand for regional solutions to: support integration efforts; facilitate access to regional and international markets; manage shared natural resources; and address regional public goods. For example, the West Africa Coastal Areas Resilience Program adopts a regional approach to address climate change challenges, as highlighted at the One Planet Summit in December 2017. The West Africa Identification for Regional Integration is supporting development of a foundation for unique identification system with mutual recognition across the ECOWAS region. While infrastructure and trade facilitation still account for the largest share, there is an increasing demand for regional solutions and public goods in other sectors including agriculture, health, education, climate and environment. 2. The Refugee Sub-Window, newly introduced with US$2.0 billion (1.4 billion SDR) as a set aside under the Regional program, is helping respond to the new challenges of refugee crises. It supports countries hosting significant refugee populations to meet the medium- and long-term development needs of both the refugees and their host communities. The new window has allowed innovative and exceptional support – for example through the Bangladesh Additional Financing projects for Health Sector Support and Reaching Out of School Children – to help address the pressing Rohingya refugee crisis. 3. The Private Sector Window (PSW), newly introduced with US$2.5 billion (1.8 billion SDR), is mobilizing private investment in IDA-only countries and most difficult markets, with a focus on FCV-affected countries. The PSW is a key platform to support the IDA18 Jobs and Economic Transformation special theme, and its commitment to FCV scale up. The PSW is also a major and unique addition to the WBG toolbox for MFD and is estimated to catalyze about US$6- 8 billion in private sector investments – bringing WBG teams together and demonstrating that IDA can help IFC and MIGA close transactions in more challenging markets. In Afghanistan, IFC, MIGA and IDA joined forces to finance a factory processing plant, in line with other support from IDA to the Government of Afghanistan to develop the agriculture and agri-business sector. In West Africa, IFC and IDA joined forces to invest in housing financing and, along the way, contribute to building the local currency capital market. 4. The Crisis Response Window (CRW), expanded with US$3 billion (2.1 billion SDR), facilitates response to natural disasters, public health emergencies and economic shocks in IDA countries. CRW assistance allocated to date includes US$80 million to support recovery from economic shocks in Mongolia, US$200 million to combat cholera outbreak in Yemen, as well as a combined US$70 million to respond to hurricanes and cyclones in Dominica and Tonga.  Complementing IDA’s existing crisis response tools, Cat DDOs were introduced in IDA18 to help strengthen IDA countries’ crisis preparedness, and one such operation has been approved for Kenya (US$200 million). - 49 - 5. The Scale-Up Facility (SUF), expanded from the IDA17 pilot with US$6.2 billion (4.4 billion SDR) in recognition of the strong demand for this window, provides financing on non- concessional terms for high quality projects, with strong economic returns which cannot be financed through IDA client’s concessional core envelope. Given debt-sustainability trends across IDA countries, the window is managed carefully to promote and protect debt sustainability. IDA18 also saw the introduction of prioritization filters to support the effective allocation of non- concessional resources. 6. The Transitional Support window set aside US$2.8 billion (2.0 billion SDR) in support for the three countries (Bolivia, Sri Lanka and Vietnam) which graduated from IDA at the end of IDA17 and still face significant levels of poverty and lingering vulnerabilities. (India, graduated in FY14, one of the largest recipients in FY15, has completed their transition to IBRD.) Assistance is provided on non-concessional terms. - 50 - Annex 3: Status of IDA18 Policy Commitments and Monitorable Actions (as of end-September 2018) Objectives Policy Commitment Target Progress Jobs and Economic Transformation (JET) Supporting job creation 1. WBG will deploy tools and 10 inclusive On track through economic resources from IDA and IFC to global value • WBG has completed comprehensive Global Value Chain transformation undertake 10 inclusive global chain (GVC) (GVC) analyses in 3 IDA countries: Ethiopia, Nepal and value chain analyses in IDA analyses Tajikistan. Work is ongoing in 4 countries: Chad, Haiti, Mali, countries to understand how they and Pakistan can contribute to economic transformation and job creation, • Additional in-depth GVC analysis in the pipeline as part of IFC including through growth in Country Private Sector Diagnostics: Ghana, Rwanda, and the agri-businesses, manufacturing, Southern African Development Community (SADC) countries. and services and will use this analysis to inform activities • Learnings from GVC analytics highlight the importance of within the IDA portfolio. investments in connective trade infrastructure, firm capabilities, and developing standards. Findings have been integrated into a number of operations targeting jobs growth through GVC integration, including in Bangladesh and Haiti. 2. WBG will use the Global Progress Report On track – being closely monitored Infrastructure Connectivity GICA knowledge products available online and disseminated, focus Alliance to make available to remains on leveraging information to inform IDA operations IDA countries knowledge on lessons and approaches related to • The Global Infrastructure Connectivity Alliance (GICA) has cross-border investments and launched a website containing more than 300 publications economic corridor development from various GICA members on connectivity, along with over and will use this analysis to 100 maps consolidating and structuring knowledge resources – inform activities within the IDA this information is available to all IDA countries. The first portfolio. annual meeting of GICA on January 25-26, 2018 and identified key priorities for GICA Members. The first GICA online conversation through its GICA LinkedIn Group is ongoing. - 51 - Objectives Policy Commitment Target Progress • The GICA knowledge base increasingly informs innovative regional infrastructure investments in IDA. During FY18, the GICA connectivity framework was shared with Association of Southeast Asian Nations (ASEAN) countries, and a prioritization approach is starting to be applied to a list of connectivity projects in Cambodia, Laos, and Myanmar. Raising job quality and 3. WBG will systematically carry Progress Report On track ensuring inclusion of out impact analyses of SME and • WBG has moved to conduct impact analysis as a standard part youth and women entrepreneurship programs of undertaking SME and entrepreneurship programs and is across IDA countries to assess preparing a report bringing together the learnings from these their overall impacts and assessments across the portfolio. differentiated outcomes for women and youth, and will • The report builds on the collaboration between the Finance, develop operational guidelines to Competitiveness, and Innovation (FCI) global practice and the inform future operations. IFC on SME programs, including the SME Working Group. It draws on the results of extensive evaluations of SME programs in recent years, including rigorous impact evaluations (including randomized control trials) through the ComPEL program. It also draws on a review underway to assess the effectiveness of programs seeking to support technology adoption and absorption by SMEs. 4. WBG will prepare operational Progress Report Delivered guidelines for integrated youth • WBG published detailed guidelines for task teams designing employment programs with a and implementing integrated supply-demand side youth focus on connecting to demand- employment programs. These guidelines have begun to inform side interventions and supporting a new generation of integrated youth employment programs labor market integration to such as in Nepal and Ghana. inform the design of a new generation of youth employment • The guidance is complemented by A Stock-take of Evidence on programs in IDA countries. what works in Youth Employment programs. - 52 - Objectives Policy Commitment Target Progress Targeting support for 5. WBG will enhance existing and Progress Report On track – being closely monitored jobs and private sector introduce new operational development in high-risk instruments to improve risk PSW fully operational supported by financial, administrative, and contexts, including sharing in projects and crowd-in legal infrastructure; first suite of programs delivered; strong focus fragility and migration private capital in high risk remains on accelerating project origination, pipeline, and delivery. investment environments, • 12 IFC/MIGA transactions have been approved, supported by including through the three PSW facilities introduction of the IFC-MIGA PSW. • A total of US$185m of PSW resources have been committed to support nearly US$1.6bn of private investments (IFC/MIGA and others). 6. WBG will adopt a ‘migration Progress Report On track – being closely monitored lens’ in IDA countries where migration has a significant Knowledge gaps being addressed; focus remains on increasing the economic and social impact number of countries and operations supported through analytical (including home, host, and work. transit countries): this will include analytics that close • WBG has made significant progress in operationalizing a critical knowledge gaps and, ‘migration lens’ in a systematic way. This included, first, where there is explicit country adoption of a set of criteria to identify of focus countries. demand, support for operations Reviews of ongoing Systematic Country Diagnostics (SCDs) in that focus on job creation, focus countries e.g., Cape Verde, Tajikistan, Ghana, Gambia, managing legal economic and Sudan show that migration issues have been addressed, even migration, and integrating young in the absence of formal migration diagnostics. people and economic migrants. Improving the knowledge 7. WBG will develop and make Progress Report On track base to inform operations available for use in IDA • Five macro model pilots led by IFC in coordination with the supporting jobs and countries a set of ex ante WB Jobs Group have been carried out to assess ex ante the economic transformation measurement tools and systems direct, indirect, and induced jobs impacts of prospective to assess the impacts of large- infrastructure investments. scale public and PPP investments targeting • The Let’s Work program also implemented value chain analysis infrastructure and economic to assess jobs impacts of investments ex ante. Pilots are transformation on jobs, including - 53 - Objectives Policy Commitment Target Progress pilot assessments on gender underway or completed in Bangladesh, Burkina Faso, outcomes. Mozambique, and Tajikistan. 8. WBG will catalogue learnings Paper for IDA18 Delivered from the Jobs Diagnostics, MTR • WBG has met the IDA18 policy commitment to catalogue assess how Jobs Diagnostics are learnings from the Jobs Diagnostics. ‘Pathways to Better Jobs informing the design and in IDA Countries: Findings from Jobs Diagnostics’ has been implementation of operations in finalized and is publicly available. IDA countries targeting job creation and economic • Jobs Diagnostics have informed several IDA operations in transformation, and recommend FY18, such as the Agribusiness and Trade project in Zambia, any changes necessary to and the First Programmatic Jobs DPC in Bangladesh under improve the impact of the tool. preparation. More can be done to ensure these links are systematic, particularly through its links with SCDs, CPFs, and Country Private Sector Diagnostics (CPSDs). 9. WBG will develop and integrate Progress Report On track spatial perspectives into analysis with specific of migration and urbanization WBG is well on its way to meeting an ambitious commitment to deliverables: trends, and the impacts of pilot new approaches with spatial data to inform the JET agenda in infrastructure on jobs and - piloting of: IDA18. economic transformation, this spatial inventory will include piloting of: spatial of infrastructure • The WBG piloted rapid machine learning approaches to inventory of infrastructure in in 5 IDA extracting the network infrastructure and buildings from satellite five IDA countries; urban jobs countries; imagery in Tanzania and Djibouti, to help develop inventories of accessibility assessments of 10 critical infrastructure mapped against the communities they cities in IDA countries; and - urban jobs serve. spatial assessment of trends in accessibility assessments of job creation and destruction in 10 cities in IDA • Urban jobs accessibility assessments were carried out in seven five countries. cities in IDA countries in Africa as part of a United Kingdom countries; Department for International Development (DFID)-supported - spatial report launched in May 2018. assessment of trends in job creation and - 54 - Objectives Policy Commitment Target Progress destruction in 5 • Spatial tools have also been used to assess firm location and job countries. creation patterns in Bangladesh, Tanzania, Zambia, and Zimbabwe. Gender and Development Sharpen focus on closing Human endowments/ first Progress report On track gaps between women, generation gaps: men, girls and boys in All applicable • All applicable IDA18 financing operations for primary and country strategies and 10. (a) All applicable IDA18 IDA18 funded secondary education support at least one of the following: operations, and financing operations in primary primary and improved access for girls to quality pre-primary and basic strengthen the data and and secondary education will secondary education, address transition and retention challenges for evidence base to enhance address gender-based disparities, education adolescent girls, promote positive role models and agency, impact towards gender for instance, by incentivizing operations address gender-based violence, and train female teachers to use equality enrollment, attendance and technology in STEM subjects to enhance learning – retention for girls. Afghanistan, Bangladesh (3 separate operations), Cameroon, Central African Republic, Ethiopia, the Gambia, Guinea-Bissau, Kenya, Moldova, Senegal, and Zambia. 13 projects, totaling US$2.16 billion Human endowments/ first On track All operations generation gaps: with IDA18 • All IDA18 operations for maternal and reproductive health funding for (b) All IDA18 financing provide at least one or more of the following: reproductive maternal and operations for maternal and health consultations through mobile brigades, train mid-wives, reproductive reproductive health will target develop adolescent-friendly health services, support free health the improvement of the maternal health services, C-sections, and uptake of long term availability and affordability of contraception – Afghanistan, Bangladesh, Cameroon, reproductive health services, Democratic Republic of Congo, Djibouti, Ethiopia, Guinea, including for survivors of Guinea-Bissau, Lao PDR, Madagascar, Mozambique, gender-based violence. Nicaragua, Pakistan, and Zimbabwe. 14 operations, totaling US$1.67 billion, of which US$326 million directly dedicated to reproductive and maternal health. - 55 - Objectives Policy Commitment Target Progress Removing constraints for more and At least 75% of On track better jobs: IDA18 funded operations for • 11 of 12 skills development operations approved under IDA18, 11. At least 75 percent of IDA18 skills support women’s participation in and improvement in the financing operations for skills development productivity of their economic activity, and/or consider how to development will consider how reduce occupational segregation. IDA18 operations address gaps to support women’s participation between men and women in productivity focus on improving in and improvement in the life skills, providing entrepreneurship training for women, or productivity of their economic supporting formal vocational training – Burkina-Faso, Rwanda, activity, and/or consider how to Pakistan, Ethiopia, Niger, Guinea-Bissau, Nepal, Niger, and reduce occupational segregation. Sierra Leone On track Removing constraints for more and At least two- better jobs: thirds of IDA18 • One project was approved [Côte d’Ivoire] and its project funded 12. At least two-thirds of all IDA18 design meets the expectation of addressing the different operations in financing operations in urban mobility and personal security needs of women. urban passenger passenger transport will address The launch of urban transport operations under IDA17 set the transport the different mobility and stage for IDA18, with active operations in Tanzania and Senegal personal security needs of promoting safety and appropriateness to women’s needs by women and men. building in special design features in transport infrastructure and services, and, in addition, by supporting women’s increased employment opportunities in roadworks and transport services. Control over assets with a focus on At least 10 On track financial inclusion: IDA18 funded operations and • Eight IDA18 operations approved, address gaps between 13. At least ten IDA18 financing ASA for women and men in access to and use of financial services operations and ASA for Financial through risk-sharing facilities for mortgages to women Financial Inclusion will address Inclusion borrowers, building institutional capacity to identify and target gaps in men’s and women’s gaps, and by setting inclusion targets for female entrepreneurs access to and use of financial and accessing credit – Afghanistan, Burundi, Cabo Verde, Djibouti, services, and at least ten Kenya, Madagascar, Sao Tome and Principe, and Pakistan Financial Inclusion strategies in At least 10 IDA countries will provide sex- Financial • An ASA in Burundi analyzes the status of financial inclusion, disaggregate reporting and put in Inclusion focusing on the mobile money market and its implications for place actions to target women’s access, and a second ASA in Burkina Faso explores - 56 - Objectives Policy Commitment Target Progress specifically women's financial Strategies in IDA how to increase the effectiveness of national funds in fostering inclusion. countries an adequate and sustainable supply of finance to female SMEs. • Four IDA country Financial Inclusion Strategies suggest actions for women’s financial inclusion, including financial literacy training other activities to increase women’s access to and use of financial services, and provide sex-disaggregated reporting – Ethiopia, Pakistan, Rwanda, and Zambia On track Control over assets with a focus on At least half of financial inclusion: all IDA18 • Three of four ICT operations with IDA18 financing support funded 14. At least half of all IDA18 better access to the Internet and better access to ICT services for operations in the financing operations in the ICT women, by providing digital skills training that targets women, ICT portfolio portfolio will support better and by stimulating the creation of digital services – Afghanistan, access to the Internet and better Kyrgyz Republic, and Côte d'Ivoire access to ICT services for women. On track – being closely monitored Enabling country-level action: Pilot data collections 15. Pilot data collections will be • Pilot data collection completed in FY18 in Malawi, with funds launched in at launched in at least six IDA raised and planning work underway in Ethiopia and Tanzania least 6 IDA countries to gather direct for FY19 launches. countries respondent, intra-household level information on employment and assets. Voice and agency: Report – Increased • This is a cross-reference to an FCV commitment. 16. Increase the number of number of operations in fragile contexts operations which which prevent or respond to prevent or gender-based violence, including respond to GBV through access to essential services and livelihood support activities for women (baseline: IDA16; see FCV). - 57 - Objectives Policy Commitment Target Progress On track Voice and agency: Progress report 17. Implement the recommendations • Action plan reflecting task force recommendations adopted, of the WBG Global Task Force implementation of actions on track, e.g.: on Gender-Based Violence, as ✓ Risk assessment tool developed to assess project-related applicable, within operations in risks – being tested in three countries. IDA-eligible countries. ✓ GBV guidelines drafted for major civil works/infrastructure projects. ✓ Roster of GBV specialists compiled to support teams. ✓ Recommended actions developed for Substantial or High GBV risk operations. ✓ Learning events and trainings launched to share Task Force recommendations and the associated Action Plan, and to raise awareness of the need to address GBV risks. Climate Change Deepen the 18. All IDA SCDs and CPFs to On track All SCDs/CPFs mainstreaming of climate incorporate climate and disaster change and disaster risk risk considerations and • SCDs: All 17 IDA SCDs completed between July 1, 2017 and management into SCDs, opportunities and reflect September 30, 2018 have incorporated climate and disaster risk CPFs, and lending, and (I)NDCs, based on a review of considerations and reflected NDCs if applicable. (100% support development of experience before the start of compliance) planning and investment IDA18, and to be reported at capacity MTR. • CPFs: All 11 IDA CPFs completed between July 1, 2017 and September 30, 2018 have incorporated climate and disaster risk considerations and reflected NDCs if applicable. (100% compliance) 19. All IDA operations continue to All IDA On track be screened for climate change operations and disaster risks and integrate • All 341 IDA operations approved by the Board between July 1, resilience measures, based on 2017 and September 30, 2018 have been screened for climate review of experience before the and disaster risks. (100% compliance) - 58 - Objectives Policy Commitment Target Progress start of IDA18, and to be reported at MTR. 20. Support at least 10 countries (on Support at least On track demand) to translate their 10 countries (I)NDCs into specific policies • Support is being provided to 9 IDA/Blend countries through and investment plans and start to the NDC Support Facility – Bangladesh, Côte d’Ivoire, integrate these into national Kyrgyzstan, Mali, Mozambique, Pakistan, Sao Tome & budget and planning processes. Principe, Rwanda, and Uganda 21. Develop at least 10 climate- At least 10 On track smart agriculture investment CSIPs and 10 plans (CSIPs) and 10 Climate-Smart Agriculture Investment Plans (CSIPs) programmatic programmatic forest policy notes FPNs (FPNs). • 4 being finalized – Bangladesh, Zambia, Côte d’Ivoire, Mali • 2 more on track for delivery in FY20 – Lesotho, Zimbabwe Forest Policy Notes (FPNs54) • 5 programmatic FPNs delivered – DRC, Ethiopia, Mozambique, Liberia, and Nepal 22. Increase the use of DPOs that On track % of financing support climate co-benefits. with climate co- • In FY18, the share of climate co-benefits over the total benefits over commitment for IDA DPOs increased to 22% as compared to total 7% in FY17. commitment for IDA DPOs will • 60% of IDA DPOs had climate co-benefits in FY18, an increase; increase from 47% in FY17. and 54 Forest Policy Notes (FPNs) are also referred as Country Forest Notes (CFNs) in the WB Forest Action Plan and Climate Change Action Plan. - 59 - Objectives Policy Commitment Target Progress % of IDA DPOs with climate co- benefits will increase. 23. Apply GHG accounting and GHG accounting On track shadow carbon price for all and shadow operations in significant sectors, carbon price • All applicable projects have applied GHG accounting and and prepare a revised guidance Shadow Carbon Price in the period of July 1, 2017 to applied to all note on discount rates. September 30, 2018. (100% compliance) investment lending projects for which WB- • The revised guidance note on discount rates has been published. approved GHG accounting methodologies exist; and the Guidance note on discount rates published. Supporting efforts to 24. Support the addition of five GW Addition of 5 Delivered achieve the Sustainable in renewable energy generation. GW in Energy for All objectives renewable • Operations approved as of September 30, 2018 for the addition energy of 6.0 GW of renewable energy generation during IDA18 – 0.8 generation GW in direct financing,55 5.2 GW in indirect financing56 55 This category includes financing for the construction of new renewable generation facilities, the addition of generation capacity through rehabilitation or expansion of existing facilities, the conversion from non-renewable to renewable sources of generation, and the provision of risk mitigation financing to provide incentives for private sector participation. This includes on-grid, mini-grid, and off-grid solutions. 56 This category can be further disaggregated into three sub-categories, and includes: (i) Renewable Energy Generation Facilities: financing for the construction of enabling facilities for investments in renewable energy generation; (ii) Renewable Energy Integration: financing for the construction of infrastructure to integrate renewable generation facilities into the grid and evacuate power from renewable generation facilities (thus avoiding stranded assets); (iii) Technical Assistance: financing for the preparation of least cost and master plans, the development of laws and regulations, resource mapping and data collection; and the analyses required for construction such as feasibility studies, and environmental and social analyses and plans. - 60 - Objectives Policy Commitment Target Progress Investment On Track 25. Develop Investment Prospectuses in seven additional prospectuses developed in 7 • 2 completed – Cameroon and Côte d’Ivoire countries with low electricity access. additional • 6 underway – Benin, Kenya, Madagascar, Malawi, Niger and countries Togo Monitoring and 26. Report annually on private Annual reporting On track reporting of IDA finance mobilized for climate57 resources used for and continue to report on overall • The WBG continues reporting annually on private finance climate change climate finance together with mobilized for climate and overall climate finance. other MDBs. • The 2017 MDB’s Joint Report on Climate Finance was launched on June 13, 2018. o In 2017, MDB’s total climate finance reached US$35.2 billion (up 28% from 2016). WBG remains the largest financier of climate-related projects with US$13.2 billion in total finance and US$8.7 billion in private mobilization (up from US$6.8 billion in 2016). Fragility, Conflict, and Violence (FCV) Deepening IDA’s 27. Adopt a risk-based approach for Progress Report On track knowledge on FCV and identifying fragility beyond learning from those countries on the FCS • A draft paper has been prepared and consultations are on- operational experience harmonized list. going, expected to be completed by the end of IDA18. 28. Deepen the WBG’s knowledge Progress Report Delivered on the mitigation/prevention of FCV risks through a flagship 57 Climate finance reporting will continue to follow the methodology and procedures agreed upon with other MDBs and will report on the WBG numbers. - 61 - Objectives Policy Commitment Target Progress report drawing on lessons from • Flagship report Pathways for Peace was launched in March operational experience and 2018. Dissemination events have been conducted. impact evaluations. Implementation notes and consultations are underway. Designing integrated 29. RRAs inform all CPFs in FCS RRAs inform On track WBG strategies and countries with significant CPFs in FCS & addressing FCV drivers risks of FCV. 58 RMR countries. • 11 RRAs were delivered in the last 18 months preceding the and building institutional planned CPFs – Burundi, Côte D’Ivoire, Djibouti, Niger, resilience Gambia, Guinea, Liberia, Nepal, Solomon Islands, Somalia, Tajikistan • 3 RRAs Ongoing in Comoros, PNG, Sudan 30. Increase the number of Increase the On track operations targeting refugees and number of their host communities (baseline: operations • 11 projects approved in 6 countries IDA17). targeting refugees IDA17 baseline: 7 projects 31. Increase the number of Increase the On track - being closely monitored operations in fragile contexts number of which prevent or respond to operations which • 3 projects were approved. Continued focus to increase pipeline. gender-based violence, including prevent or through access to essential respond to services and livelihood gender-based supported activities for women violence (baseline: IDA16). (through a component or sub-component) 58 Countries eligible for exceptional IDA allocations to mitigate FCV risks identified on the basis of a cross-country risk scan combining quantitative and qualitative assessments. - 62 - Objectives Policy Commitment Target Progress Baseline: 0 Improving staffing, 32. Increase staff “facetime” in IDA Increase staff On track – being closely monitored operational effectiveness FCS with focus on staff based Facetime Index and flexibility in-country and monitor progress • Net increase of 85 staff as of end-September (66 of which GE+) through the “Facetime index”. 59 (Sept. 2016 baseline). Objective is net 150 staff increase. • The Facetime Index has increased by 5 percent in IDA FCS and RMR countries in FY18 compared to the FY17 baseline. Promoting partnerships 33. Undertake joint RPBA as Progress Report- On track for a more effective openings arise for engagement in joint RPBA response the aftermath of conflict in IDA • Joint RPBA has been completed in Cameroon. countries. • One is ongoing in Zimbabwe. The Bank is exploring additional opportunities for joint RPBAs. Enhancing financing to 34. Implement the revised IDA Progress Report On track support FCS/FCV resource allocation framework • RRAs and RMR Implementation Notes have been completed for FCS/FCV to enhance for Nepal, Niger, Guinea, RMR Implementation Note for targeting of IDA’s exceptional Tajikistan will go to Board in Q2 FY19 as part of the CPF. support and financial engagement in these countries. • The TAR continues to provide significant financing support to Central African Republic, Madagascar & the Gambia. 59 The proposed “Facetime” indicator will be calculated on the basis of World Bank staff in -country missions as well as international and local staff and consultants posted in the country. - 63 - Objectives Policy Commitment Target Progress Governance and Institutions Delivered Strengthen DRM 35. Provide support to at least a third Support at least a of IDA countries targeted at third of IDA • Delivered: 33 countries (12 DPF, 9 IPF, 1 PforR, 17 ASA, 8 increasing their Tax/Gross countries Domestic Product ratio through TADAT) – Afghanistan, Bangladesh, Benin, Bhutan, Burkina lending operations, ASA and Faso, Burundi, Cambodia, Central African Republic, Chad, technical assistance including Comoros, Democratic Republic of Congo (DRC), Côte d’Ivoire, tax diagnostic assessments. Djibouti, Ethiopia, Grenada, Kenya, Liberia, Madagascar, Mauritania, Federated States of Micronesia, Moldova, Nepal, Niger, Nigeria, Pakistan, Samoa, Senegal, Somalia, Tajikistan, Tanzania, The Gambia, Timor- Leste, Togo • Ongoing: 5 new countries (13 countries total) – Ghana, Kyrgyz Republic, Lao PDR, Uganda, Zimbabwe Delivered Improve public 36. Support at least 10 IDA Support at least expenditure, financial countries in performing 2nd or 10 IDA countries • Delivered: 10 countries - WB Leading: Afghanistan, Tajikistan management and subsequent PEFA assessments to procurement inform preparation of their (published), Zambia (published), Ghana, Zimbabwe; WB SCDs. Supporting: Chad, Guinea (published), Kenya, St. Lucia, Sierra Leone (published) • Ongoing: 3 countries (Draft report) – WB Leading: Malawi; WB Supporting – Mali, Côte d’Ivoire 37. Deliver MAPS2 in five IDA On Track Deliver MAPS2 countries to accelerate the development of modern, in five IDA • Delivered: 0 countries efficient, sustainable and more countries inclusive public procurement systems that take into account national development objectives. - 64 - Objectives Policy Commitment Target Progress • Ongoing: 4 counties underway for FY19 delivery – Djibouti, Malawi, Mozambique, Rwanda On track - being closely monitored Strengthen active 38. Support at least 10 IDA Support at least ownership of SOEs countries on enhancing SOE 10 IDA countries • Delivered: 5 delivered – Afghanistan, Madagascar, performance through: (i) on enhancing Performance Agreements and/or Mozambique, Republic of Congo, Zimbabwe SOE (ii) increased transparency performance through published reports on • Ongoing: 1 scheduled to be delivered – Cameroon their SOE portfolio. On Track Support public 39. Perform joint operations, TA, 10 IDA countries administration and/or ASA on sector-focused to identify and • Delivered: 8 countries – Bangladesh, DRC, Madagascar, performance for service governance in 10 IDA countries address delivery to identify and address institutional Lesotho, Niger, Mozambique, Solomon Islands, Tanzania institutional bottlenecks to bottlenecks to service delivery with the health, service delivery • Ongoing: 8 countries – Burundi, Cameroon, Lao PDR, water, and/or education sectors. Lesotho, Liberia, Myanmar, Sudan, Uganda On Track – being closely monitored Support institutional 40. Support at least 25 IDA At least 25 IDA capacity to respond to countries in developing countries Funding has been secured for planning in 18 countries, of which 8 pandemics pandemic preparedness plans. develop pandemic countries have completed the National Action Plan process. preparedness plans • Delivered: 8 countries – Cambodia, Lao PDR, Liberia, Myanmar, Senegal, Sierra Leone, Tanzania, Uganda • Ongoing: 15 countries – Afghanistan, Bangladesh, Burkina Faso, Chad, Democratic Republic of the Congo, Ethiopia, Ghana, Haiti, Kenya, Mali, Mauritania, Niger, Nigeria, Sudan, Zambia - 65 - Objectives Policy Commitment Target Progress On track - being closely monitored 41. Support 25 countries in 25 countries developing frameworks for develop G&I • Delivered: 7 countries – Cambodia, Kenya, Liberia, Nigeria, governance and institutional frameworks for arrangements for multi-sectoral health Senegal, Sierra Leone, Uganda health emergency preparedness, emergency response and recovery. preparedness, • Ongoing: 10 countries – Afghanistan, Ethiopia, Ghana, Haiti, response, and Mali, Mauritania, Myanmar, Niger, Sudan, Tanzania delivery Delivered Integrate citizen 42. Support projects in at least 10 Projects in at engagement and IDA countries in the least 10 IDA • Delivered: 26 Projects in 21 countries delivered with enhanced beneficiary feedback into development and countries service delivery implementation of user feedback GRM and/or beneficiary feedback interventions – Bangladesh, operations and/or enhanced GRMs60 for Burkina Faso, Burundi, Cameroon, Rep. of Congo, Ethiopia, service delivery that ensure Ethiopia, Kenya, Lao PDR, Mali, Moldova, Mozambique, participation by women in these Myanmar, Nepal, Pakistan, Rwanda, Senegal, Solomon Islands, processes Tajikistan, Tanzania, Rep. of Yemen, Zambia On track Strengthen open, 43. Support at least one-third of IDA At least one-third transparent and inclusive countries (at least 25 countries) of IDA countries • Delivered: 17 countries delivered – Afghanistan, Bangladesh, governance through to operationalize reform to operationalize Open Government commitments towards the OGP reform Bhutan, Burkina Faso, Cambodia, Central African Republic, commitments agenda to strengthen transparent, commitments Djibouti, Ethiopia, Guinea, Kiribati, Kyrgyz Republic, accountable, participatory, and towards OGP Mozambique, Nepal, Niger, Senegal, Sierra Leone, Togo inclusive governments agenda • Ongoing: 1 country under implementation – Nigeria On track – being closely monitored Mitigate IFFs 44. Perform IFFs assessments in at Perform IFF least 10 IDA countries to support assessments in at • Delivered: 3 countries (30%) – Cabo Verde, Guyana, Senegal 60 Enhanced GRMs include minimum standards on uptake, responsiveness, disclosure, and/or gender inclusion. - 66 - Objectives Policy Commitment Target Progress the identification and monitoring least 10 IDA of IFFs; countries • Ongoing: 13 countries – Afghanistan, Benin, Burkina Faso, Dominica, Gambia, Grenada, Liberia, Madagascar, Mauritania, Niger, Rep. of Congo, Rwanda, Togo On Track Enhance understanding 45. Strengthen and systematize G&I analysis in: of governance and Governance & Institutional Half of RRAs • Delivered: institutions in FCV analysis in half of Risk and and at least o 11 out of 14 RRAs (78%) – Burundi, Dem. Rep. of Resilience Assessments and at three-fourths of Congo, Djibouti, Gambia, Kosovo, Nepal, Papua New least three-quarters of Recovery RPBAs in IDA & Peace Building Assessments Guinea, Sierra Leone, Solomon Islands, Somalia, countries in IDA countries Tajikistan, o All 4 RPBAs (100%) – Cameroon, Central African Republic, Mali, Nigeria Operationalize 2017 46. Plan for operationalization of Report On track WDR 2017 WDR focused on reducing implementation gaps and • Socialization: Disseminated in 50 venues spanning 30 countries; enabling adaptive approaches. 255K downloads • Application: More than 30 SCDs, CPFs, and ASAs incorporate WDR 2017 framework – notable IDA18 SCDs include Malawi, Sierra Leone, Solomon Islands • Institutionalization: Development of suite of tools; Embedding in corporate instruments and priority areas; Partnerships and knowledge exchange - 67 - Annex 4: IDA18 Results Measurement System (RMS) 1. The IDA18 RMS uses a three-tiered development results framework with 84 indicators to track results of IDA countries at an aggregate level: Tier 1: IDA Countries Progress 2. Tier 1 of the IDA18 RMS reports long-term development outcomes and the broader context of countries in which IDA operates. Progress in Tier I indicators is not directly attributed to IDA’s interventions; it is the outcome of collective efforts by countries and their development partners. There are 33 indicators in Tier I tracking progress that IDA-eligible countries are making on development indicators organized into four categories: (i) WBG Goals of poverty eradication and boosting shared prosperity; (ii) growth; (iii) sustainability and resilience; and (iv) inclusiveness. 3. Tier 1 aggregates data from the list of eligible IDA borrowers at the end of previous fiscal year. This first update of Tier 1 indicators reports aggregated results from IDA’s eligible borrowers as of June 30, 2018. Some data from previous years, including baselines, may have been retroactively adjusted due to improvements in data availability, coverage, and other changes. Tier 2: IDA-Supported Development Results 4. Tier 2 of the IDA18 RMS tracks development results in countries supported by IDA operations. Tier 2 indicators report on outputs supported directly by IDA projects which are collected and aggregated from data extracted directly from project documents (i.e. ISR, ICR, PAD) the majority of which are Corporate Results Indicators (CRIs), a set of standard indicators monitored corporately and used to report World Bank, IBRD, and IDA project results to internal and external constituents. Tier 2 includes 21 indicators in the IDA18 RMS, tracking aggregate project output indicators under the three categories: (i) growth, (ii) inclusiveness, and (iii) sustainability to reflect the linkage to the WBG Strategy. 5. Methodology used for aggregating Tier 2 indicators (IDA-supported results) was adjusted61 by calculating cumulative totals of outputs achieved during a period or adding up the values as we go or report on (i.e., "how much we have achieved so far.”). Running totals would be generated and reported during the IDA18 cycle (i.e. FY18 data during the first year, FY18 AND FY19 data in the second year, and data from FY18 through FY20 in the third and final year of the IDA18 cycle). Therefore, results currently reported on Tier 2 correspond to results achieved by IDA- supported projects only during FY2018. 6. The FY17 harmonized list of FCS (released in June 2017) has been used for aggregating and reporting results achieved during FY18 in these countries. The same list will be used throughout the IDA18 cycle to ensure data comparability and consistency across the years. 61 In the IDA17 RMS, reported outputs in Tier II were based on a three-year rolling basis. - 68 - Tier 3: IDA Organizational and Operational Effectiveness 7. Tier III of the IDA18 RMS includes measures of both the operational and organizational effectiveness of IDA. This includes indicators tracking the performance of IDA’s portfolio, the quality and timeliness of projects delivered to clients, the results orientation of the operations, client and beneficiary feedback, financial sustainability, and the implementation of the five IDA Special Themes. Tier 3 of the IDA18 RMS includes 30 indicators organized under six categories: (i) development outcome ratings: (ii) client feedback; (iii) beneficiary feedback; (iv) portfolio performance; (v) financial sustainability; (vi) implementation of Special Themes. Similar to Tier 2, data reported for FCS will be based on the FY17 harmonized list of FCS (released in June 2017) and continue to be used throughout the IDA18 cycle. - 69 - Tier 1: IDA Countries Progress Baseline Actual (as of June 30, 2017) (as of June 30, 2018) Unit of No. Indicator Data Data Measure All IDA/FCS coverage All IDA/FCS coverage Year Year WBG goals % of 1 Population living on less than US$1.90 a day 31.8/38.2 2013 30.8/39.2 2015 population Growth rate of real per capita income of the bottom 40 % 2 % 2.9/3.1 2013 1.8/2.1 2015 Growth 3 Annual growth rate of real GDP per capita % 0.7/-0.5 2016 2.1/1.6 2017 constant 4 GDP per person employed 8,710/6,827 2016 8,682/6,680 2017 2011 PPP $ 5 Non-agriculture sectors, value added (as % of GDP) % 78.2/75.6 2016 78.1/75.6 2017 scale from 0 6 Level of statistical capacity 62.18/52.93 2016 61.96/52.36 2017 to 100 Average 7 Trade Logistics Performance Index rating 1=low 2.4/2.3 2016 2.4/2.3 2016 to 5=high Number of 8 Number of IDA countries that have raised taxes/GDP above 15% 0/0 2015 1/0 2016 countries 9 No. of IDA countries that have an improved composite PEFA score in dimensions across the pillars of budget reliability, transparency of public finances, and control in budget execution: Number of 10/1 2016 8/2 2017 countries (1.1) Aggregate expenditure outturn (9.1) Public access to fiscal information (24.2) Competitive procurement methods 10 Youth employment to population ratio (age 15-24) % 43.3/40.2 2016 43.3/40.2 2017 - 70 - Baseline Actual (as of June 30, 2017) (as of June 30, 2018) Unit of No. Indicator Data Data Measure All IDA/FCS coverage All IDA/FCS coverage Year Year - Youth employment to population ratio (age 15-24), women % 36.0/34.6 2016 36.0/34.5 2017 - Youth employment to population ratio (age 15-24), men % 50.5/45.7 2016 50.4/45.7 2017 Sustainability and Resilience % of 11 Countries without wealth depletion 23.1/7.7 2014 23.1/7.7 2014 countries % of 12 Population exposed to harmful air pollution (PM2.5) 99.9/99.8 2015 99.9/99.8 2016 population 13 Average annual deforestation change % 0.49/0.5 2015 0.49/0.5 2015 Metric tons 14 CO2 emissions 0.53/0.38 2013 0.53/0.39 2014 per capita % of 15 Annual freshwater withdrawals, total internal 7.1/3.1 2014 7.1/3.1 2014 resources Inclusiveness % of 16 Countries with growth concentrated in the bottom 40% 56.3/33.3 2013 50.0/75 2015 countries % of 17 Proportion of population with access to electricity 52.6/40.8 2014 57.6/42.2 2016 population Proportion of adults (15 years and older) with an account at a bank or 37/24 18 % 29/18 2014 2017 other financial institution or with a mobile money service provided (30 female) 19 Ratio of female to male labor force participation rate % 71.6/73.3 2016 71.7/73.4 2017 Number of April 2013- May 2015- 20 Legal changes that support gender equality over the past two years legal gender 38/10 42/15 April 2015 June 2017 changes 21 47.9/41.2 49.5/42.3 Lower secondary gross completion rate % 2014 2016 (45.7 female) (47.5 female) - 71 - Baseline Actual (as of June 30, 2017) (as of June 30, 2018) Unit of No. Indicator Data Data Measure All IDA/FCS coverage All IDA/FCS coverage Year Year - Ratio of girls’ to boys’ completion rate 91.2/78.4 2014 92.2/79.2 2016 22 Lower secondary enrollment rate % 55.9/53.0 2014 58.5/55.0 2016 - Ratio of girls’ to boys’ enrollment rate 92.4/79.3 2014 93.7/80.8 2016 Number of under-five 23 Under-5 mortality rate deaths per 74.7/83.1 2015 72.2/80.6 2016 1,000 live births 24 Prevalence of stunting among children under 5 years of age % 34.5/36.8 2015 33.7/36.4 2016 25 Proportion of births attended by skilled health personnel % 54.8/62.3 2013 54.8/62.3 2013 % of uninfected 26 Incidence of HIV 0.11/0.12 2015 0.11/0.11 2016 population ages 15-49 Number of maternal 27 Maternal mortality ratio deaths per 452/536 2015 452/536 2015 100,000 live births Number of births per 28 Adolescent fertility rate 1,000 85.6/92.4 2015 84.4/90.8 2016 women ages 15-19 % of married 29 Contraceptive prevalence by modern methods 32.3/22.6 2012 31.1/24.0 2014 women ages 15-49 - 72 - Baseline Actual (as of June 30, 2017) (as of June 30, 2018) Unit of No. Indicator Data Data Measure All IDA/FCS coverage All IDA/FCS coverage Year Year % of 30 People using basic sanitation services 38.3/35.6 2015 38.3/35.6 2015 population % of 31 People using basic drinking water services 67.6/58.8 2015 67.6/58.8 2015 population Number 32 Number of refugees by country or territory of asylum 7.3/2.7 2015 7.7/2.7 2016 (millions) Number (millions - 33 Internally displaced persons, total displaced by conflict and violence 23.9/20.0 2016 25.3/21.1 2017 high estimate) - 73 - Tier 2: IDA-Supported Development Results All IDA FCS Actual Performance IDA17 Results Unit of Female Standard63 No. Indicator (FY15 to FY17)62 Actual Actual Measure Beneficiaries (FY18) (by end of (All IDA/FCS) (FY18) (FY18) FY20) Growth Farmers adopting improved agricultural No. of farmers 1 4.44/0.05 4-5 m technology (millions) 1.92 0.37 0.34 No. of people 2 Beneficiaries reached with financial services 0.04/0.01 0.27 0.003 0.11 4-6 m (millions) 80,000 – 3 Roads constructed or rehabilitated Km 61,054/ 17,503 5,931 1,820 - 100,000 Area provided with new/improved irrigation 4 Ha 2,079,352/148,405 402,722 59,079 - 1.3-2.3 m or drainage services 5 Generation capacity of renewable energy GW n.a. 6.064 n.a. - 5 GW Private investments catalyzed by WB in 6 US$ billions 4.7/1.0 6.24 0.54 - Monitored IDA countries 62 Reflects the cumulative IDA-supported results achieved during IDA17 cycle (FY2015 through FY2017), unless noted otherwise. Most (new) indicators developed for IDA18 RMS have data available only for FY2017. 63 The performance standard corresponds to the net cumulative value (or range) expected to be achieved by end of the IDA18 period (i.e. June 30, 2020). Values shown are for all IDA countries; no standards have been established for FCS. 64 This indicator has been aligned—in terms of definition and target—with the IDA18 policy commitment to “support the addition of five GW in renewable energy generation”, and RMS value is therefore reported for operations delivery as of end of September 2018. Of the 6.0 GW reported, 0.8- GW were provided through direct financing; the additional 5.2 GW were supported through indirect financing. - 74 - All IDA FCS Actual Performance IDA17 Results Female Standard63 Unit of (FY15 to FY17)62 No. Indicator Actual Actual Beneficiaries Measure (FY18) (by end of (All IDA/FCS) (FY18) (FY18) FY20) (FY2017 only) Inclusiveness No. of teachers 7 Teachers recruited or trained 6.8/n.a. 9-10 m (millions) 0.53 0.15 0.25 8 People who have received essential health, No. of people 240.2/n.a. 316-400 m nutrition and population services: (millions) 36.88 17.72 23.18 No. of people (i) Children immunized 69.2/n.a. 18.13 8.66 9.06 120-180 m (millions) (ii) Women and children who have received No. of people 146.3/n.a. 13.9 5.51 9.27 180-200 m basic nutrition services (millions) (iii) Number of deliveries attended by No. of deliveries skilled health personnel 24.6/n.a. 4.85 0.40 4.85 16-20 m (millions) No. of people 9 Beneficiaries of social safety net programs 23.7/4.1 12.13 7.80 6.47 25-30 m (millions) People provided with access to improved No. of people 10 34.16/9.23 13.2 1.7 n.a.65 35-45 m water sources (millions) 65 Number of female beneficiaries are not reported since these infrastructure services are normally provided to groups (e.g., at the community, household, or general population level) and data collected and reported are not disaggregated by sex at the client/beneficiary level. - 75 - All IDA FCS Actual Performance IDA17 Results Female Standard63 Unit of (FY15 to FY17)62 No. Indicator Actual Actual Beneficiaries Measure (FY18) (by end of (All IDA/FCS) (FY18) (FY18) FY20) People provided with access to improved No. of people 11 14.49/0.50 8.5 1.8 n.a.656 12-18 m sanitation services (millions) People provided with improved urban living No. of people 12 12.6/3.9 3.41 0.13 n.a.65 13-18 m conditions (millions) 13.94/0.42 People provided with new or improved No. of people 13 8.99 1.22 n.a.65 25-35 m electricity service (millions) (FY2017 only) Beneficiaries in IDA countries of job- No. of people 0.972/0.129 14 9.03 0.51 2.55 Monitored focused interventions (millions) (FY2017 only) Sustainability 15 Projected energy or fuel savings Megajoules 1.525x109 / 0 1.96x109 367,786.800 - 5.43x109 Mj Countries supported towards Number of 16 institutionalizing disaster risk reduction as a n.a. 39 8 - 25-30 countries national priority with IDA support -7,421,032/ 17 Net GHG emissions tCO2eq / year -1,372,757 -5,239,187 -896,411 - Monitored (FY2017 only) Number of IDA countries that were 66/27 provided statistical capacity building Number of >60 / > 25 18 - support by the WBG for the implementation countries countries (FY2017 only) 44 20 of household surveys - 76 - All IDA FCS Actual Performance IDA17 Results Female Standard63 Unit of (FY15 to FY17)62 No. Indicator Actual Actual Beneficiaries Measure (FY18) (by end of (All IDA/FCS) (FY18) (FY18) FY20) Number of lending operations with civil Number of 3/0 19 4 0 - 20 registration and vital statistics operations (FY2017 only) Number of countries with an increase in the 0/0 number of registered taxpayers among IDA Number of 20 12 2 - 8-12 countries with substantial WB tax countries (FY2017 only) engagement Number of IDA countries that 7/3 Number of 21 operationalize the Open Government 18 5 - 20-30 countries Partnership (OGP) agenda commitments (FY2017 only) - 77 - Tier 3: IDA Organizational and Operational Effectiveness Benchmark value66 All IDA FCS Unit of (Reported value as Actual (FY18) Actual No. Indicator Performance Standard Measure of end FY2017) (FY118) All IDA/FCS Development Outcome Ratings %, IEG 30 57 48 70 1 Satisfactory outcomes of IDA country strategies Rating (FY15-18 (FY14-17 exits) (FY15-18 exits) (4-year rolling) (4-year rolling) exits) 2 Satisfactory outcomes of IDA operations: 74.5 83.2/77.7 85.4 80 i) as a share of commitments (FY15-17 %, IEG (FY14-16 exits) (FY15-17 exits) (3-year rolling) exits) ratings 63.2 (3-year rolling) 74.2/67.5 76.1 75 ii) as share of operations (FY15-17 (FY14-16 exits) (FY15-17 exits) (3-year rolling) exits) Client Feedback Client feedback in IDA countries on WBG 3 7.3/7.1 6.90 6.59 7 (Annual) effectiveness and impact on results 66 The baseline value reflects annual performance standards as of end of FY2017, unless noted otherwise. Data was not available for some new indicators developed for IDA18 RMS. - 78 - Benchmark value66 All IDA FCS Unit of (Reported value as Actual (FY18) Actual No. Indicator Performance Standard Measure of end FY2017) (FY118) All IDA/FCS Client feedback in IDA countries on WBG 4 7.6/7.4 7.30 7.28 7 (Annual) knowledge Average Client feedback on WBG on responsiveness and 5 rating scale: 6.8/6.3 6.52 6.29 7 (Annual) staff accessibility 1-10 Client feedback on WBG on collaboration with 6 7.4/7.4 7.05 6.77 8 (Annual) other donors Beneficiary Feedback Projects with beneficiary feedback indicator at 7 % 92/92 94 95 100 (Annual) design Portfolio Performance 8 Satisfactory Bank performance in IDA-financed operations 71.8 80.8 / 80.1 84.2 i) overall 80 (3-year rolling) (FY15-17 (FY14-16 exits) (FY15-17 exits) exits) %, IEG Rating 68.3 / 50.8 66.8 47.2 Monitored ii) at entry (3-year rolling) (FY14-16 exits) (FY15-17 exits) (FY15-17 exits) 80.9 / 79.3 81.7 72.1 Monitored iii) during supervision (FY14-16 exits) (FY15-17 exits) (FY15-17 exits) - 79 - Benchmark value66 All IDA FCS Unit of (Reported value as Actual (FY18) Actual No. Indicator Performance Standard Measure of end FY2017) (FY118) All IDA/FCS Share of CPFs in IDA countries that have at least 9 % 100 / 100 100 100 100 (Annual) one joint objectives in the results matrix 10 Alignment with the strategy i) Stock of country strategies underpinned by % 91 / 100 100 100 100 (Annual) SCD (%) ii) Qualitative assessment of alignment of the n.a. n.a. n.a.67 Monitored country engagement with the corporate goals 11 Disbursement ratio % 20.6 / 23.9 20 24.1 20 (Annual) Operations design drawing lessons from 12 % 75/73 75 67 100 (Annual) evaluative approaches % IDA commitment, 39.3 / 22.7 44.4 24.9 13 Quality of M&E in IDA-financed operations IEG ratings 80 (3-year rolling) (FY14-16 exits) (FY15-17 exits) (FY15-17 exits) (3-year rolling) 14 Time from Project Concept Note to the first Number of 23.4/ 22.4 22.8 21.2 Monitored68 disbursement project financing months 67 No data is available for part (ii) of this composite indicator since IEG does not provide ratings in the CLR, measuring “how well the program was alig ned with the corporate strategy”. 68 To avoid skewed incentives for speed at the expense of project quality and necessary due diligence, performance of this indicator will be tracked and monitored on a regular basis without establishing specific target or performance standard. - 80 - Benchmark value66 All IDA FCS Unit of (Reported value as Actual (FY18) Actual No. Indicator Performance Standard Measure of end FY2017) (FY118) All IDA/FCS i) Time from Concept Note approval to Board 13.7/13.7 13.8 12.6 Monitored Approval ii) Time from Board Approval to Project 6.4/6.7 Monitored 6.1 5.5 Effectiveness iii) Time from Project Effectiveness to First 3.3/2.0 Monitored 2.9 3.1 Disbursement Average cost of IDA supervision projects 15 US$ ’000 176 / 164 183 167 Monitored (implementation support) Number of impact evaluations supported by the 16 Number n.a. 24 4 Monitored World Bank in IDA countries 17 Proactivity Index % 73.9 79.9 89.7 75 (Annual) Financial Sustainability 18 IDA Budget Anchor % 97 102 - <=100 (Annual) Bank Budget to Portfolio Volume Ratio (per US$ 19 US$ Millions 12 12.1 - Monitored billion portfolio under supervision) Implementation of Special Themes 20 Percentage of IDA-supported projects that % 55/53 56 66 55 (Annual) demonstrate a results chain by linking gender - 81 - Benchmark value66 All IDA FCS Unit of (Reported value as Actual (FY18) Actual No. Indicator Performance Standard Measure of end FY2017) (FY118) All IDA/FCS gaps identified in analysis to specific actions that are tracked in the results framework Percentage of IDA-supported operations 21 % n.a. n.a. n.a.69 Monitored reporting gender results at completion Number of IDA-supported operations that 22 address and respond to Gender-based Violence Number n.a. 12 7 Monitored (GBV) Number of days per FY 105 (converted to 100 23 Facetime Index in FCS an index where - Monitored (eq. 192,727 the FY17 (eq. 184,407 days) days) baseline figure is 100) 24 IDA-supported operations with climate change co-benefits - number of projects Number, 134/24 134 34 Monitored - in US$ billions US$ billions 3.4/0.31 6.8 0.7 3-4 (Annual) 69 This indicator is a vestige of the previous system which was based on the number of completed operations, focusing only on a tally of numbers and not on results. No data reported, since the new Gender Tag methodology has been introduced in FY17, only a handful operations have closed at end of FY2018 (only 3 out of 9 gender-tagged operations) and none has a completed ICR in the system. - 82 - Benchmark value66 All IDA FCS Unit of (Reported value as Actual (FY18) Actual No. Indicator Performance Standard Measure of end FY2017) (FY118) All IDA/FCS Number of Completed ASA products that address climate 25 ASA 101/n.a. 85 29 100-200 change issues products IDA $ commitments with disaster risk 2.9 (FY15-FY17 26 US$ billions 2.8 0.4 3-5 (3-year rolling average) management co-benefits average) Private direct mobilization by WBG 27 US$ billions 2.8/1.6 3.47 1.4 Monitored operations/transactions in IDA countries Total private mobilization of WBG-supported 28 US$ billions n.a. 7.04 2.97 Monitored operations/transactions in IDA countries Number of Number of Illicit Financial Flows (IFFs) 29 IFFs 9/2 3 0 10-15 Assessments performed in IDA countries Assessments Share of IDA18 Country Partnership Frameworks (CPFs) which at reflect at least one of the following four key principles underpinning Economic Transformation: 30 • Sectoral productivity % n.a. 75 - Monitored • Value chain expansion • Increased productive capital stock or investment in energy, transport, manufacturing or services. • Export sector output/value added; Trade Facilitation - 83 - Annex 5: WBG and IDA Partnerships 1. IDA18 focus on partnerships is strong to implement the ambitions agenda through coordinated approaches that benefit from synergies and comparative advantages – particularly in key priority areas. 2. Integration among global themes and IDA18 priorities including Gender and Fragility, Conflict and Violence (FCV) is fostered across country strategies, knowledge products, learning, and operations, providing critical leadership in these interlinked areas: The Bank’s Climate Change and Gender Groups have partnered to develop a comprehensive WB-wide gender and climate program that is now under implementation for FY18-23 covering key themes spanning disaster risk reduction and adaptive social protection, renewable energy, forests and landscapes, urban services, and green jobs and private sector development. This type of support helps better understand and reduce gender gaps related to climate change in client countries. As a further example, the FCV, Social, Urban, Rural and Resilience Practice (GSURR), and Climate Change Group (CCG) teams are launching an Advisory Services and Analytics project on Multi- Dimensional Risks Scenarios in FY19, covering long-term scenarios for climatic patterns, migrations and conflict dynamics in Lake Chad and West Africa coastal areas 3. Special Theme-specific partnership examples include: Scaling up crisis and fragility response 4. The Bank Group and UN have enhanced collaboration and joint action in post-crisis and humanitarian settings to build resilience for the most vulnerable people. In March 2018, the joint UN-WBG study Pathways for Peace: Inclusive Approaches to Preventing Violent Conflict was launched with a call to redouble the international community’s efforts on prevention. The report notes that a scaled-up system for preventive action would save between US$5 billion and US$70 billion per year, which could be reinvested in reducing poverty and improving the wellbeing of populations. 5. To help refugees and host communities, IDA and the WBG is working closely with the UN High Commissioner for Refugees, UNICEF, the Red Cross (ICRC), and other humanitarian agencies. IDA18 financing for refugees has been strengthened in part due to clear focus on national policy changes articulated by commitments made during the 2016 UN Leaders’ Summit on Refugees. With access to new financing through an IDA18 innovative financing sub- window, Uganda became a pilot country for the Comprehensive Refugee Response Framework (CRRF), an initiative called for in the UN resolution The New York Declaration for Refugees and Migrants. A key component of the CRRF is the “Refugee and Host Population Empowerment strategic framework” that is supported by the Bank Group, the UN Country Team, and other partners. 6. The Bank Group engagement in Yemen’s active conflict is facilitated by the UN. The Bank has forged a strong operational partnership with UN Agencies to implement the program, aimed at preserving the capacity of Yemeni institutions to deliver basic services. The current active IDA emergency portfolio through the UN comprises five active operations totaling US$1.22 billion, of which US$800 million (66 percent) has been disbursed. - 84 - 7. IDA collaborates with other financing facilities to ensure quick response to emerging crises. In May, for example, IDA joined with the Pandemic Emergency Financing Facility (PEF) to combat an Ebola outbreak in the Democratic Republic of Congo. IDA provided US$15 million for financing free care, availability of drugs, hazard pay and logistics, and the PEF provided its first-ever financial commitment of US$12 million. Addressing gender issues 8. The Bank Group and UN collaborates close to address the gender gap in poverty. Using the Global Monitoring Database to analyze gender differences in welfare at the global level, the joint paper notes a poverty penalty accounts for about five million more women living in extreme poverty across the world, particularly in South Asia and Sub-Saharan Africa. The joint work fed into UN Women’s new flagship report Gender Equality in the 2030 Agenda for Sustainable Development which was launched in February 2018. In addition, The Umbrella Facility for Gender Equality (UFGE) helps complement and inform IDA operations in closing gaps between women and men. UFGE invests in research, data collection and impact evaluations to identify what works to close gender gaps and bring essential knowledge to policy makers and practitioners worldwide. Some examples being piloted under IDA18 include interventions that promote girls transition to work, women’s property rights, childcare, lessons for finance and training for entrepreneurship, and prevention of gender-based violence. 9. Collaborations are enhancing the effectiveness of gender operations. For example, The Umbrella Facility for Gender Equality (UFGE) makes IDA operations more effective in closing gaps between women and men. UFGE invests in research, data collection and impact evaluations to identify what works to close gender gaps and bring essential knowledge to policy makers and practitioners worldwide. Some examples being piloted under IDA18 include interventions that promote girls transition to work, women’s property rights, childcare, lessons for finance and training for entrepreneurship, and prevention of gender-based violence. Advancing jobs and economic transformation 10. As a new Special Theme, the design and implementation of the JET(JET) work program is strongly supported by partnerships and collaboration. Recognizing that growth alone is not sufficient, a cross-cutting focus on job creation through private sector-driven economic transformation has been set as a high priority for IDA countries. In close coordination with other Special Themes objectives, implementation across the WBG, and consultation with external partners– including public and private stakeholders – new approaches to operations, new financial instruments, enhanced analytics, and new tools for the evaluation and measurement of jobs impact are being identified and piloted to focus JET attention and efforts. 11. Given the comprehensive nature of the JET challenge, its policy commitments are closely integrated with the other IDA18 Special Themes and, therefore, are reinforced by complementary commitments, including on women’s labor force participation, regional trade and integration, climate-smart urbanization and infrastructure, and enhanced governance, as well as primacy of job creation in addressing the challenge of fragility. - 85 - 12. IDA’s work is carried out together with IFC and MIGA’s increasing engagements in IDA countries in support of JET, and particularly through the WBG coordination and implementation of the new IDA Private Sector Window (PSW). Under IFC’s 3.0 strategy of creating markets, and the commitment to shift towards IDA countries as part of its capital increase package, IFC continues to increase engagement in IDA countries. In FY18, IFC’s own account commitments in IDA countries reached close to US$1.9 billion, with a total mobilization of almost US$5 billion and total financing volume of around US$6.9 billion. MIGA, guided by its FY18-20 strategy with a focus on supporting IDA and FCS countries and Climate finance, has committed 13 projects (out of 39 overall) in IDA countries totaling US$1.24 billion in guarantees. In its first year, the PSW has supported 12 projects committing US$185 million and leveraging more than US$1.4 billion in total financing. 13. Beyond the WBG, dedicated JET consultations are being organized with partners to share experiences, focus on implementation priorities, and help deliver results. In May 2018, a World Bank-Peking University roundtable workshop on JET was held in Beijing to continue the dialogue among policymakers and development practitioners through analytical studies and select country experiences. The IDA18 Framework around connectivity, capabilities, and incentives was presented, together with the Peking University study on the implication of China's industrial transformation for the manufacturing sector in Africa and other developing countries. Sectoral discussions focused on agriculture to produce jobs in the global food value chain, manufacturing in the era of new technologies, and innovation and the digital economy. Experiences were shared on Benin, Ethiopia, and special economic zones. More than 60 participants from IDA client governments, development partners, private sector, Chinese government and research institutions, and World Bank Board members and teams joined the workshop. 14. New, innovative approaches with spatial data are being piloted with partners to inform the JET agenda – this includes rapid machine learning to extract infrastructure information from satellite imagery in Tanzania and Djibouti, to help develop inventories of critical infrastructure mapped against the communities they serve. Urban jobs accessibility assessments have been carried out in 7 cities in IDA countries in Africa as part of a DFID-supported report launched in May 2018. Spatial tools have also been used to assess firm location and job creation patterns in Bangladesh, Tanzania, Zambia, and Zimbabwe. 15. Across programs, collaboration with others helps take forward key JET aspects at institutional and project level: • Migration: The WBG has been working closely with the ILO and other agencies to define the SDG indicator 10.7.1 on recruitment costs for migrant workers. • Youth employment / jobs in FCV environment: In Mali, the WBG and UN Peacebuilding Support Office (UN PBSO) are leading preparations for a pilot on youth employment in conflict areas. This is a follow-up to a joint review of employment programs in peacebuilding between ILO, WBG, UN PBSO, and UNDP, and is overseen by a manager- level steering committee of the four organizations. • Solutions for Youth Employment (S4YE): S4YE, with its Secretariat at the World Bank, was founded in partnership by Accenture, ILO, International Youth Foundation (IYF), Plan International, RAND Corporation, the World Bank, and Youth Business International - 86 - (YBI)—membership includes bilateral and multilateral partners as well as private sector partners like Microsoft and Mastercard Foundation. • Global Infrastructure Connectivity Alliance (GICA): An initiative of the China Presidency of the G20, GICA membership includes national governments, including China; multilateral development banks, such as ADB, AIIB, EDB, and the World Bank; international organizations, such as OECD and UNCTAD; and global institutions, such as Global Infrastructure Hub (GIHUB) and Global Energy Interconnection Development and Cooperation Organization (GEIDCO). • Global Value Chains (GVCs): The WBG has been at the forefront of global knowledge on GVCs and has developed a number of tools to support GVC analysis, working with partners such as the OECD, the EU, and the governments of China, Japan, and the United Kingdom. Enhancing resilience for climate change 16. The WBG and other MDBs are collaborating on a broad range of issues related to climate, including climate finance tracking, resilience measuring, mitigation and shadow price of carbon. MDBs work closely at technical level to harmonize the methodology to track climate related finance. MBDs and IDFC announced at the One Planet Summit to develop a common framework for tracking progress towards achieving resilience to be shared by COP24, they also reaffirmed their commitment to shift investment to sustainable asset classes through the implementation of a shadow price of carbon. 17. Partnerships between the WBG and Global Environment Facility (GEF), Climate Investment Funds (CIF), and Green Climate Fund (GCF) target transformational climate action at scale by crowding in other sources of concessional finance. Three funding proposals developed by the WB in IDA countries have been approved by the GCF Board, bringing total GCF funding of US$ 67.5 million to Marshall Island, Burkina Faso, and Bangladesh. Two more projects for IDA countries are under preparation to request GCF funding. GEF has been an important source of grant financing for IDA countries to pilot new technologies and approaches, de-risk investment, and enhance enabling environments. In FY18, eight WB projects with a total amount of US$ 66.5 million have been approved by GEF to support IDA countries. 18. Bilateral partnerships prove to be instrumental in building global momentum for climate actions. Together with Canada, the WBG is targeting developing countries and small island developing states in energy transition. Supporting the leadership of UK and Germany, the WBG contributes to the InsuResilience Global Partnership to deepen climate risk insurance markets and use innovative insurance related schemes in developing countries. At the city level, the Global Covenant of Mayors and the Bank established a partnership to secure funding in technical and financial assistance for Cities Executing Aggressive Climate Action Programs. 19. Complementing IDA-specific assistance, the Bank has established the WBG NDC Support Facility Trust Fund to support the implementation of country NDCs. It also provides access to NDC-related tools for the development community and WBG staff. The WBG NDC Support Facility is a multi-donor, Bank-Executed Trust Fund developed to support countries in implementing their NDCs in line with the NDCP process. The Fund is active in a range of sectors including transport, coastal management, water, energy efficiency, climate-smart agriculture, - 87 - environment and disaster risk management. The NDC Partnership process, complemented by the NDC Support Facility, aims to build client capacity and help with the NDC coordination, prioritization and implementation process. Building good governance and Institutions 20. Strategic partnerships have been central to the delivery of the Governance & Institutions Special Theme, which are central to promoting aid effectiveness and streamlining international collaboration. Given the systematic governance challenges faced by IDA countries, there has been significant focus on deepening and broadening collaboration and coordination with other development partners. 21. The Platform for Collaboration on Tax (PCT) – a vehicle for enhanced cooperation between the World Bank, IMF, OECD, and UN – has facilitated the roll-out of the Medium-Term Revenue Strategy to facilitate a country-driven process to develop multi-year, holistic and realistic plans for revenue strategies. 22. The WBG also has deepened its collaboration with the Open Government Partnership (OGP) to mobilize resources for meeting the ambitious Open Government targets through the launch of a global trust fund that provides resources for local co-creation and thematic collaboration among OGP countries and global actors. 23. The Stolen Asset Recovery Initiative (StAR) – a partnership between the WBG and the United Nations Office on Drugs and Crime (UNODC) – delivered the inaugural Global Forum on Asset Recovery (GFAR) in December 2017 in support of policy commitments on Illicit Financial Flows by providing a platform to empower the investigators and prosecutors charged with identifying and tracing assets and getting necessary cooperation with financial centers in recovering and returning them.