41287 IDA15 Key FinancialVariables and Updated IDA15 Financing Framework International Development Association ResourceMobilization (FRM) October 2007 ABBREVIATIONSAND ACRONYMS F Y Fiscal Year HIPC Heavily IndebtedPoor Country IBRD International Bank for Reconstruction and Development IDA International Development Association IFC International Finance Corporation MDRI Multilateral Debt ReliefInitiative SDR Special Drawing Right TABLE OF CONTENTS Executive Summary I. Introduction......................................................................................................................... 1 I1. Key FinancialVariables for IDA15 ..................................................................................... 1 EffectiveForeignExchangeReferenceRates........................................................................... 1 BurdenShares andStandardEncashment Schedule ................................................................. 2 Accelerated Encashment Schedules.......................................................................................... 5 DiscountRate for AcceleratedDonor Encashments................................................................. 6 I11. UpdatedIDA15 FinancingFramework ............................................................................... 7 Tables Table 1: EstimatedEncashment Schedule for IDA15 vs .IDA14/IDA13 (Percent of Total Contributions)..................................................................................... 4 Table 2: Standardand AcceleratedEncashmentSchedules for IDA15 (Percent ofTotal Contributions) ..................................................................................... 6 Table 3: UpdatedIDA15 FinancingFramework(SDR billion) .................................................. 7 Annex Annex Table A: IDA15 ForeignExchangeReferenceRates (AverageDaily Exchange Ratesvs. SDR. April 1- September 30. 2007) .........10 Annex Table B: UpdatedIDA15 FinancingFramework(SDRmillion) ................................... 11 Annex Table C: UpdatedIDA15 FinancingFramework(USDequivalentbillion) ...................11 EXECUTIVE SUMMARY 1. This note provides Deputieswith information on a number of key financial variables inthe context o f donors' financing pledges for IDAl5. The note also updates the proposed financing framework for IDA15. 2. EffectiveForeignExchangeReferenceRates. At the first IDA15 meetingin Paris, Deputiesagreedto use the daily average foreign exchange rates over the six-month period from April 1- September 30,2007 for purposes o f converting national currency contributions to IDA15 into SDR equivalent amounts. The note provides these exchange rates. 3 . Contributionsfor Debt Relief Financing. As was the case inIDA14, it is proposed that donor contributions to finance IDA's HIPC-related costs in IDA15 would be based on IDA13 burdenshares. Encashment would occur inthree equal annual installments. The same procedures would apply for donor contributions to finance arrears clearance costs in IDA15. For both financing items, donors are requestedto scale up their burdenshares so as to eliminate the structural financing gap (9.2 percent). Donor contributions to cover the MDRIcosts during the IDA15 disbursementperiod (FY09-19) would be provided and accounted for in line with the established procedures under the MDRIreplenishment. 4. Regular Donor Contributions. It is proposed that regular donor contributions in IDA15 be encashed over the customary 9-year standard schedule, as has been the case in prior IDA replenishments. This would generate a small acceleration benefit of about SDR 300 million when compared with the expected IDA15 disbursementprofile. This benefit would lead to corresponding reductions inthe structural financing gap and the total target volume o f donors' regular contributions. As inprior replenishments, donors could choose to accelerate the encashment o f their IDA15 contributions. This would generate either contribution credits that increase the funds available for commitment, or encashment discounts that reduce the cost to the respective donors. The discount rate proposed for accelerated donor encashments in IDA15 is 4.0 percent p.a. 5. Updated IDA15 FinancingFramework. Contributions from IBRD and IFC in support o f IDA15 are expected to increase to USD 3.5 billion, subject to availability of net income and annual Board approvals by each institution. This amount i s USD 2.0 billion higherthanthe transfer amount assumed inthe original IDAl5 financing framework. The total proposed IDA15 envelope increases therefore to SDR 27.8 billion, an increase o f 27 percent over the original volume o f IDA14 commitment authority. The updated financing framework also reflects a net decrease o f IDA's estimated debt relief costs by SDR 201 million, resulting in a corresponding increase of available internal resources. KEY FINANCIAL VARIABLES AND UPDATEDIDA15 FINANCING FRAMEWORK I.Introduction 1. This noteprovidesDeputieswith informationon a number ofkey financial variables inthe context of donors' financingpledgesfor IDA15. The note also updatesthe proposed financingframework for IDA15. 2. SectionI1ofthe noteprovidesthe following information:(i) the effective foreign exchange referencerates for convertingdonors' nationalcurrency commitmentsto IDA15 into SDR equivalentamounts; (ii) the burdenshares and standardencashmentschedule for donor contributionsto IDA15; (iii) illustrativealternative schedules for accelerated encashment of donor contributions,with correspondingencashmentdiscountsand contributioncredits; and (iv) informationonthe applicable discountrate for accelerated donor encashmentinIDA15, Approval is soughtfrom Deputiesregardingthe standard encashmentprofile for IDA15 andthe discountrate for accelerateddonor encashment. 3. SectionI11providesthe updatedIDA15 financingframework. This updated framework takes into account recentdiscussions ofthe ExecutiveDirectorsof IBRDand IFC about undertakingsconcerning IBRDand IFCnet incometransfers in support of IDA15. The updatedfinancing framework also reflects the latest available estimates for IDA'Scost ofprovidingdebt reliefunderthe HIPC Initiativeandthe MultilateralDebt ReliefInitiative(MDRI). 11.Key FinancialVariablesfor IDA15 4. EffectiveForeignExchangeReferenceRates. At the first IDA15 meetinginParis, Deputiesagreedto use the daily average foreign exchangerates over the six-monthperiod from April 1- September 30,2007 for purposesofconvertingnational currency contributionsto IDA15 into SDR equivalent amounts. Deputiesalso agreedthat donor countries with domestic inflationrates exceeding10percentover the 3-yearperiod2004- 2006 would denominatetheir IDA15 contributions in SDR. Annex Table A shows the averageforeign exchangerates duringthe agreedreferenceperiod, and it identifiesthose donorsthat would denominatetheir IDA15 contributionsinSDR. 5. As incurrentpractice, donors will pay their contributions in SDR, a component currency ofthe SDR basket, or inanother freely convertiblecurrency that IDA may exchangeas requiredfor its operations. To maintainthe value of donors' IDA15 contributions in SDR equivalentterms, IDA hedgesthe foreign currency exposures resultingfrom donor contributionsnot providedin SDR. To allow for an effective hedge, donorswould needto specify the currency of denominationoftheir IDA15 contributions at the time of conclusion of the IDA15 discussions. This provides IDA with the necessary certainty as to the currency of donors' encashments. As inpast replenishments,IDA will - 2 - hedge the foreign currency exposure following adoption o f the replenishment Resolution by IDA'sBoard o f Governors, which is expected to occur duringthe third or fourth quarter o f fiscal year 2008. 6. Burden Shares and Standard Encashment Schedule. For IDA15, donors would provide regular contributions as well as additional contributions to cover IDA's cost o f debt relief, composed o fHIPC-related contributions, financing for arrears clearance operations, and contributions to finance MDRIcosts o f IDA. Over time donors have chosen to use slightly differentprevious burdenshares as the agreed basis for the financing o f various replenishmentcomponents. Broadly speaking donors have chosen to finance HIPC-related costs at the IDA13 burdenshares while creating a related but distinct burden sharing scheme for the first two years o f MDRIfinancing. When deciding on their regular IDA contributions, donors have according to a long standing tradition takenthe regular burden shares o f the preceding replenishment. N o major deviations from past practice are proposed for IDA15, though donors will needto address the various structural gaps that arise from applying the different burden sharing frameworks. 7. HIPC Contributions. InIDA14, donors agreed to use their IDA13 burdenshares to finance HIPC-related costs. This left a structural financing gap o f 9.2 percent. To help lower the structural financing gap, twelve donors agreed to scale-up their IDA13 burden shares. The remainingfinancing gap in HIPC contributions was closed through an additional contribution from Norway in October 2005. Donors discussed inMaputothat IDA13 burden shares would apply again for financing HIPC-related costs inIDA15.' Donors are requestedto scale up their IDA13 shares so as to eliminate the structural financing gap in HIPC financing for IDA15. 8. Underthe current donor compensation arrangement for the HIPC Initiative, financing contributions to cover IDA's HIPC-related costs are encashed inequal annual amounts over the three years o f the replenishment. For IDA15, the same procedure would apply. Therefore, HIPC contributions would be encashed inthree equal installments over the 3- year commitment period o f IDA15 (Le. fiscal years 2009 through 2011). 9. Financingo f Arrears Clearance. InMaputo, donors recognizedthe strong linkage betweenarrears clearance and the provision o f debt relief under the HIPC Initiative since successful arrears clearance is a prerequisite for reachingthe HIPC decision point. For this reason, it is suggested that donors' IDA13 burden shares would also be used to calculate individual donor financing of arrears clearance operations in IDA15. Donors are requested to scale up their burdenshares so as to eliminate the structural gap for financing o f arrears clearance costs. 10. The actual timing of specific arrears clearance operations over the I D A 15 commitment period is uncertainand depends on individual country circumstances. It is nonetheless suggested that contributions to finance arrears clearance operations be ' See para. 47 in the discussionpaper issuedfor the second IDA15 meeting in Maputo: "IDA15 Financing Framework", June 2007. - 3 - encashed in equal annual amounts over the 3-year commitment period o f IDAl5.2 This would mirror the the economic linkbetween arrears clearance and HIPC debt relief. As importantly it would not overburdenencashment administration and maintainthe predictability o f donors' encashment profiles., 11. MDRI Contributions. Under the initial MDRIreplenishment,donors also agreed to apply their IDA13 burdenshares to finance IDA'Sforgone reflows due to the MDRI. Over the first two years ofMDRIfinancing (FY07-08), anumber of donors usedcustomized burden shares, broadly modeled on their IDA13 ones. For the IDA15 disbursement period (FY09-19), even with all donors deliveringon their financial pledges at the agreed MDRI burden shares, a structural financing gap o f 8.0 percent remains. Over the entire 40-year financing period o fthe MDRI, the structural financing gap is SDR 2.0 billion. As proposed for HIPC-related costs, donors are requested to consider scaling uptheir MDRI burden shares proportionally to eliminate the structural financing gap over the IDA15 disbursementperiod (FY09- 19). 12. For encashment of MDRIcontributions, donor contributions would continue to be encashed consistent with the annual payment schedule (normally inJanuary o f each year startingfrom FY07 through FY44) attached to donors' Instrumentso f Commitments for the MDRI. These annual payment schedules will be updated inconjunction with the IDAl5 repleni~hment.~ incurrent practice, donor contributions for the MDRIwill be As encashed separately from IDA15 contributions. 13. RegularDonor Contributions. InIDA14, the actual amount o f regular contributions that donors provide to IDA equals 88.45 percent ofthe total target amount that formed the basis for burden sharing duringthe IDA14 negotiations. This leaves a structural financing gap o f 18.55 percent. For IDA15, if donors choose to use the same regular burdenshares as in IDA14, the same structural financing gap would arise. InMaputo, donors discussed several options to reduce this structural financing gap.4 These options included increasing individual donor burdenshares vs. IDA14; additional funding from new donors to IDA15; recalibrating or normalizing all donor burdenshares so that they add up to 100 percent; and accelerating encashment o f donor contributions without encashment discounts. This latter approach is discussed in the following paragraphs. 14. Inpast replenishments, regular donor contributions were encashed inline with the expected time profile of disbursementso f credits and grants expected to be approved during the commitment period. This practice ensures that donor contributions are drawn down by IDA on an "as-needed" basis. To determine the expected disbursementprofile during IDA15, management made the following assumptions: * For commitment authority purposes, donor contributions to finance arrears clearance would become available for commitment upon actual clearance o f individual country arrears. Referto the updatedMDRITable 1, which is contained inthe companion paper for the fourth IDA15 meeting in Dublin: "MDRI- Second Update on Debt Relief Costs and Donor Financing, as o f September 30,2007", October 2007. See para. 44 in "IDA1 5 Financing Framework", June 2007. - 4 - Donor contributions are expectedto be committedby IDA evenly over the 3-year IDA15 commitment period; Commitmentsfor developmentpolicy operations are assumedto account for 25 percento ftotal IDA15 commitments; and Disbursementson investmentprojectsand on developmentpolicy operationswould follow the historicaldisbursementpatternobservedover the past 10years. Table 1: EstimatedEncashmentSchedule for IDA15 vs. IDA14DDA13 (Percent of Total Contributions) 11-year profile 9-year profile Weighted Weighted IDA15 Arrears Current IDA14/13 Arrears Standard `iscalYear Regular HIPC Clearance Profile Regular HIPC Clearance Profile 2009 3.0 33.0 33.0 6.8 3.0 33.0 33.0 6.8 2010 8.0 33.0 33.0 11.1 10.0 33.0 33.0 12.9 2011 12.5 34.0 34.0 15.2 16.0 34.0 34.0 18.3 2012 14.5 12.7 18.0 15.7 2013 14.0 12.2 16.0 14.0 2014 13.5 11.8 13.0 11.4 201s 12.0 10.5 10.0 8.7 2016 9.5 8.3 8.0 7.0 2017 7.0 6.1 6.0 5.2 2018 4.5 3.9 2019 1,s 1.4 otal 100 100 100 100.0 100 100 100 100.0 )iscountrate 4.0% 4.0% IPV equivalent 82.40 84.05 b of face value `redit 2 01% 15. The resultingdisbursementprofile and associated encashment schedule for regular donor contributionsin IDA15 suggests a slightly slowerprofile thanthe encashment profile for regular contributionsusedfor IDA14and IDA13 (see Table 1). While both profilesstart at the same levelofdisbursementinyear 1, the updatedprofile disburses somewhat slower inyears 2 through5, followedby faster disbursement inyears 6 through 10. As a result, the IDA15 profile extends over a total of 11 years. These adjustmentsare mainly due to two factors: (i)the somewhat lower assumed share of fast disbursing developmentpolicy operation^,^ which leadsto a slower overall average disbursement profile inthe initial five years; and (ii) the increasingshare o f regionalinvestmentprojects, which often involvea longer implementationperiodgiventheir complex institutional arrangements. It is worth noting, however,that despite these projectedtrends, IDA'S The share for policy-basedcommitments of 25 percent assumed for IDA15 compareswith a share of 30 percentassumed for IDA14 and IDA13. Over the past 10years (FY98-07), the actual average share of IDA'Spolicy-based commitments was 23 percent, with amedianof 24 percent. This share peaked in FY02 when it reached30 percent; in FY07, policy-basedcommitmentsaccounted for 22 percent. In view of the historicalrangeobserved, a share of 25 percenthas been assumed for the IDA15 period. - 5 - overall disbursementratios have been increasingsignificantlyover the past four replenishments,as also shown ina companionnote.6 16. CompositeEncashment Profilefor IDA15. Adding the 3-year encashmentprofiles for HIPC contributionsand arrears clearance contributionsto the new profile for regular donor contributionsresults in a weighted encashment profile for IDA15 that extends over a total 11 years, as shown in Table 1. However,there are benefits o f retainingthe established9-yearencashment periodfor donor encashments in IDA15. First, donors are familiar with the 9-yearperiodand have adaptedtheir internal proceduresand payment systems to this schedule, which has been used during severalpast IDA replenishments. 17. Moreover, the 9-yearencashment schedule would provideIDA with a small amount of additional liquidity. This liquidity couldgenerate additional investmentincomeuntil the time it was neededfor disbursement. This income couldbe usedto reduce the structural financinggap in donor contributions, lowering slightly the total volume o f regular donor contributionsrequired. Assuminga volume of regular IDA15 donor contributions,net of the structuralfinancing gap, of SDR 14.8billion, the additional investment incomethat couldbe generated usingthe 9-year standardencashment schedule would be 2.01 percentagepointsof SDR 14.8 billion or about SDR 300 million. This investment incomewould lowerthe structuralfinancinggap in donors' total target contributions,includingthe structuralfinancing gap, by 1.67 percentagepointswhen comparedwith the 11-year weightedencashment schedule showninTable 1. 18. Inview ofthese benefits,managementrecommendsthat donors adoptthe 9-year weightedprofile shown in Table 1as the standardencashment schedule for IDA15.' 19. Accelerated Encashment Schedules. Inpast replenishments,donors have been giventhe option o fprovidingtheir contributionsincash `up-front', providedthat the presentvalue o fthe acceleratedencashment schedule is at least equalto that o fthe standard schedule. InIDA12 and IDA13, the additional resources providedthrough accelerationof donor encashments were usedto partially offset the structuralfinancing gap. InIDA14, many donors usedthe additional resources from acceleratedencashmentas a credit item, either to increasetheir ownregularburden share, to cover a share o f their costs under the MDEUreplenishment,or to lower the overall structuralfinancinggap in the replenishment. Ineither case, donors receivedadditionalsubscriptionvotes on account o f the additional resourcesprovidedto IDA from acceleratedencashment. Other donorsthat used acceleratedencashment chose to benefit from a discount on the total amountto be provided. 20. Such contributioncredits or encashment discountswould also be available inIDA15. Table 2 shows the suggested9-year standardencashment profile for IDA15 andprovides three options for accelerateddonor encashment. For example, a donor would receive a contributioncredit o f 10.01percent ifthe entire contributionis encashed over three years. 6 ' "IDA Commitmentsand Disbursements,FY95-07", September 2007. Individual donors couldneverthelessopt to use an 11-yearschedule, providedthat the presentvalue of their encashments will be equivalentto that under the standard 9-year schedule. - 6 - This credit could be used to increase the donor's regular burden share inIDA15, or it could be applied towards loweringthe overall structural financing gap of the replenishment without attribution to the individual donor. Alternatively, the donor could benefit from an encashment discount o f 9.10 percent on the actual amounts paid to IDA over three years. As incurrent practice, donors providing additional resources throughaccelerated encashment would receive additional subscription votes. Table 2: Standardand AcceleratedEncashmentSchedules for IDA15 (Percent of Total Contributions) Standard Accelerated Schedules Fiscal Year Schedule Over 3 years Over 4 years Over 6 years (1) (2) (3) (4) 2009 6.8 33.0 25.0 5.4 2010 12.9 33.0 25.0 13.1 2011 18.3 34.0 25.0 22.0 2012 15.7 25.0 24.5 2013 14.0 23.4 2014 11.4 11.6 2015 8.7 2016 7.0 2017 5.2 Total 100.0 100 100 100 Discountrate 4.0% 4.0% 4.0% 4.0% NPV equivalent 84.05 92.47 90.75 86.21 % o f face value Credit = (Col2-Col 1)/ Col 1 10.01% 7.97% 2.56% Discount= (Col 2-Col I)/Co12 9.10% 7.38% 2.50% 21. DiscountRate for Accelerated Donor Encashments. The amountsreceivable by IDA under the regular encashment schedule and an accelerated schedule should be identical in present value terms. This ensures that all donors will contribute to I D A 15 at their agreed level. The financial equivalency is achieved ifthe projected liquidity investment returnto be generated by IDA on accelerated donor balances i s applied as the discount rate for the present value calculations. As inpast replenishments, for reasons o f simplicity and transparency, it is recommendedto use a single, SDR-based discount rate that would apply for donor contributions in all currencies. 22. InIDA14, the discount rate for accelerated donor encashment was 3.5 percent per annum. This rate reflectedthe expected SDR-based investmentreturn o f IDA'Sportfolio o f liquid assets over the 9-year encashment horizon o f IDA14, based on forward interest rates observed in capital markets at the time. Since setting the discount rate for IDA14, interest rates have been increasing across the four SDR-constituent currencies. At present, the SDR-based investmentreturn o f IDA'S liquid assets i s estimated at 4.0 percent per annum over the suggested 9-year standard encashment period for IDA15. It is therefore - 7 - proposedto set the discount rate for accelerated donor encashments in IDA15 at 4.0 percent p.a. 23. Deputiesare asked to consider and approve the following recommendations: To adopt the 9-year standard encashment profile for IDA15 shown inTable 2; and To set the discount rate for accelerated encashment o f donor contributions in IDA15 at 4.0 percent p.a. 111. Updated IDA15 FinancingFramework 24. At the second IDAl5 meetingin Maputo inJune 2007, Deputiesreviewed the proposed financing framework for IDA15.* Subsequentto this meeting, several elements o f the IDA15 financing framework have been adjusted. The updatedproposed IDA15 financing framework is shown inTable 3. Table 3: Updated IDA15 FinancingFramework (SDR billion) IDA14 (post-MDRI) IDA15 (proposed) Sources of Funds SDR billion SDR billion IDAl5 Donor Contributions, including HIPC & Arrears Clearance(available, net o f structural financing gap) 12.1 16.9 Donor Financingfor MDRI - 2.6 - 4.1 Subtotal Donors 14.7 21.I InternalResources 6.1 4.1 IBRDTransfers - 1.1 - 1.1 Total IDA Replenishment (with original IBRD transfers) 21.9 26.3 20% Additional World Bank Group Transfers assumed - 0.0 - 1.5 Total IDA Replenishment (including add'lWBG transfers) 21.9 27.8 27% ~ Memo item: Total WorldBank Group Transfers 1.1 2.6 130% 25. Contributionsfrom the World Bank Group. Intheir respective meetings on September 27,2007, the ExecutiveDirectors o f the IBRD and the Board o f Directors o f IFC made specific undertakings concerning IBRDand IFC transfers from net income in support o f IDA15. Both institutions undertook to provide a combinedtotal amount of USD3.5 billion insupport o fIDA15, subject to availability of net income and annual Board approvals by each institution. It is expected that each institution would provide half o f the total contribution amount. ~ See "IDAl 5 Financing Framework", June 2007. - 8 - 26. These World Bank Group contributions would be drawn down up-front in each year, following annual Board approvals o f IBRD' and IFC", rather than over the standard 9- year encashment schedule for donors. This accelerated encashment would lead to additional investment income for IDA, thereby generating a total value o f USD 3.9 billion (SDR2.6 billion) o fcommittable resources for IDA15. This compares with USD 1.6 billion (SDR 1.I. billion) o f IBRDtransfers inthe original IDAI5 financing framework. The additional contribution o f SDR 1.5 billion from the World Bank Group would increase the total size ofthe IDA15 replenishment to SDR27.8 billion. This would represent an increase o f 27 percent over the original volume o f commitment authority in IDA14 o f SDR 21.9 billion (see Table 3). InUSDequivalent terms, the total volume of IDA15 commitment authority would be USD42.3 billion, at the IDA15 foreign exchange reference rates. 27. Updated Costs of Debt Relief. Estimates for IDA'Sforgone reflows due to the provision of debt relief under the HIPC Initiative and the MDRIhave been updated as o f September 30,2007." The resultingrevised donor financing requirements have been reflected inthe updated financing framework. On a consolidated basis, HIPC and MDRI compensation requirements for IDA15 have decreased by SDR 201 million compared to prior estimates as o fDecember31,2006. The net decrease o f SDR 201 million resulted from a decrease in HIPC costs o f SDR 265 million offset by an increase inMDRIcosts o f SDR 64 million. These changes are driven primarily by the revision ofprojecteddecision and completion point dates for a number o f HIPC countries, the exclusion o f debt relief estimates for Kyrgyz Republic, and the application o f the IDAI5 foreign exchange reference rates, which reflect the depreciation o f the US dollar vs. the SDR basket over the past 18 months. Therefore, the volume o f available internal resources for IDAI5 increases by the same amount, to SDR 4.1 billion. 28. Donor EncashmentsOver 9 Years. As proposed in Section 11, donors would use a standard encashment schedule over 9 years for IDA15, This would lead to an acceleration benefit o f about SDR 300 million inthe proposed replenishment scenario. As a result, the volume o f requireddonor contributions would be reduced by that amount. Intotal, donors would provide actual contributions o f SDR 16.9 billion for the IDA15 replenishment, including contributions for HIPC costs and for financing o f arrears clearance operations. This would be complemented by additional, firm financing commitments o f SDR 4.2 The expectedIBRDtransfers ofUSD 1.75 billion for IDA15 would be supportedby IBRDnet income in fiscal years 2008-2010, resultingin three annualtransfers of about USD 580 million each, to be received by IDA duringthe second quarter of fiscal years 2009-2011, respectively. lo The expectedIFC transfers of USD 1.75billion for IDA15 would be supportedby IFC net income over four fiscal years, 2007-2010. IFC's Boardof Directorshas authorizeda designationofUSD 500 million from fiscal year 2007 net income, which is expectedto be transferredto IDA at the beginningofthe IDA15 period, during the first quarter of fiscal year 2009. The remainingIFC transfers of USD 1.25 billionwould be designated from IFCnet income in fiscal years 2008-2010. Ofthis amount, USD450 million is expectedto be receivedby IDA duringthe secondquarter of fiscal year 2009, USD400 million in fiscal year 2010, andUSD 400 million in fiscal year 2011. II "MDRI- SecondUpdateonDebtReliefCostsandDonorFinancing, as of September30,2007", October 2007. - 9 - billion for the MDRIreplenishment. See Annex Tables B and C for further details on the breakdownof donor contributionsfor IDA15. - 10- Annex Table A: IDA15 Foreign ExchangeReferenceRates (Average Daily ExchangeRatesvs. SDR, April 1-September 30,2007) Donors Currency IDA15 Average Rate IDA14 Average Rate vis SDR vis SDR Australia AUD 1.81991 2.05508 Barbados BBD 3.03371 2.91294 Brazil BRL 2.97991 4.40788 Canada CAD 1.63750 1.95219 China CNY 11.61688 C/ Croatia HRK 8.22241 C/ Cyprus CYP 0.65419 C/ Czech Republic CZK 31.52395 38.42273 Denmark DKK 8.35145 8.97486 Egypt EGP 8.65345 C/ Estonia EEK 17.54583 C/ Euro Countries a/ EUR 1.12141 1.20662 High Inflation Countries b/ SDR 1.00000 1.ooooo Hungary HUF 280.44415 302.1255 1 Ice1and ISK 96.79557 105.73084 Israel I L S 6.31071 6.62949 Japan JPY 181.86553 160.49845 Korea KRW 1415.52621 1694.90614 Latvia L V L 0.78371 C/ Lithuania LTL 3.87222 C/ Malaysia MYR 5.25582 C/ Mexico MXN 16.65788 16.70260 New Zealand N Z D 2.05859 2.28505 Norway N O K 8.99285 10.05411 Poland PLN 4.26020 5.50617 Singapore SGD 2.31928 d/ South Africa ZAR 10.84388 9.48079 Sweden SEK 10.38816 11.04887 Switzerland CHF 1.84671 a7 Turkey TRY 2.00564 e/ United Kingdom GBP 0.76152 0.80761 United States USD 1.52448 1.46365 a/ Austria, Belgium,Finland, France, Germany, Greece,Ireland,Italy, Luxembourg,Netherlands, Portugal, Slovak Republic,Sloveniaand Spain. b/ For IDA15: Kuwait, Russia, Saudi Arabia. c/ Potential new donors. d/ Pledged in USDfor IDA14. e/ Pledged in SDRfor IDA14. - I 1 - Annex Table B: Updated IDA15 FinancingFramework(SDR million) Lower Scenario Proposed Scenario Higher Scenario SDR million SDR million SDR million 'otal IDA Replenishment (including add'l WBG transfers) 25,661 27,174 29,966 Increase vs. IDA14 (SDR 21,916million) 17% 27% 37% Additional World Bank Group Transfers assumed 1,475 1,475 1,475 'otal IDA Replenishment (with original IBRD transfers) 24,186 26,299 28,491 fwhich: Internal Resources 4,132 4,132 4,132 IBRDTransfers 1,083 1,083 1,083 Donor Financing for MDRI 4,148 4,148 4,148 IDA15 Donor Contributions 14,823 16,936 19,128 of which: Regular contributions (net of structural gap) 12,695 14,808 17,000 Donor contributionspaid over 9 years 12,440 14,510 16,658 Acceleration benefitfrom 9-year schedule 255 298 342 Donor HIPC contributions 1,22 1 1,221 1,221 Donor financing o f arrears clearance operations 907 907 907 Aemo item: IDAl5 Regular donor contributions Total target volume for burden sharing, i.e. 100°/~ 15,273 17,815 20,452 Net available amount of resources required, i.e. 81.45% 12,440 14,510 16,658 after structuralfinancing gap of 18.55% Annex Table C: Updated IDA15 FinancingFramework(USD equivalent billion) ~~~ ~~ Lower Scenario Proposed Scenario Higher Scenario USDbillion USD billion USD billion rota1I D A Replenishment (including add'l WBG transfers) 39.1 42.3 45.7 Additional World Bank Group Transfers assumed 2.2 2.2 2.2 rota1I D A Replenishment (with original IBRD transfers) 36.9 40.1 43.4 fwhich: Internal Resources 6.3 6.3 6.3 IBRDTransfers 1.7 1.7 1.7 Donor Financing for MDRI 6.3 6.3 6.3 I D A l5 Donor Contributions 22.6 25.8 29.2 of which: Regular contributions (net o f structural gap) 19.4 22.6 25.9 Donor contributionspaid over 9years 19.0 22.1 25.4 Acceleration benefitfrom 9-year schedule 0.4 0.5 0.5 Donor HIPC contributions 1.9 1.9 1.9 Donor financing o f arrears clearance operations 1.4 1.4 1.4 demo item: IDAl5 Regular donor contributions Total target volume for burden sharing, i.e. 100% 23.3 27.2 31.2 Net available amount of resources required, i,e. 81.45% 19.0 22.1 25.4 after structuraljnancing gap of 18.55%