Tashkent, Uzbekistan (UzDaily.com) -- The World Bank Group committed US$58.8 billion in fiscal year 2009 to help countries struggling amid the global economic crisis, a 54% increase over the previous fiscal year and a record high for the global development institution.

In FY09 (1 July 2008 -30 June 2009), the Bank Group supported 767 projects to promote economic growth, fight poverty, and assist private businesses, including US$20.7 billion in infrastructure financing, a critical sector to provide the foundation for rapid recovery from the crisis and job creation. This support was provided in loans, grants, equity investments and guarantees to help countries and private-sector firms deal with the devastating effects of the global financial meltdown.

“Requests for assistance from the World Bank Group rose sharply this year, and we expect this to continue well into 2010, as the pace of recovery is far from certain,” said World Bank Group President Robert B. Zoellick. “Millions of people are still suffering, and we must continue to help countries safeguard priority expenditures, including on essential infrastructure, investment in human capital, and social safety nets, or we will further jeopardize hard-fought gains over recent years in overcoming poverty.”

The World Bank Group devoted significant energy and resources in FY09 responding to the needs of countries hit by the global financial crisis, with a strong focus on initiatives to protect the most vulnerable in the poorest countries; maintain long-term infrastructure investment programs; and sustain the potential for private sector-led economic growth and employment creation. Support for safety nets and other social protection programs totaled US$4.5 billion.

To help developing countries weather the impacts of the crisis, the World Bank this year proposed a Vulnerability Fund - a call to action for each developed country to pledge the equivalent of 0.7% of its economic stimulus package as additional aid, be it through their own bilateral aid agencies; UN agencies such as the World Food Program, FAO, or UNICEF; the World Bank Group and other multilateral development banks; or non-governmental organizations. The World Bank Group received a strong response to this call, with donor support to Bank Group crisis initiatives totaling US$6.8 billion—over and above previous commitments to the institution.

Commitments from the International Bank for Reconstruction and Development (IBRD)—which provides financing, risk management products, and other financial services to countries—rose sharply in FY09 to US$32.9 billion for 126 operations, from US$13.5 billion the previous year. This exceeds the previous record set in fiscal year 1999, when IBRD committed US$22.2 billion to respond to the Asian financial crisis. Fast-disbursing Development Policy Loans, providing critical budget support at a time of rising financing gaps, comprised nearly 47% of the overall total for FY09. IBRD also assisted countries—through capacity building efforts, policy advice, and technical assistance—to assess the social and structural sources of vulnerability, address underlying policy and institutional weaknesses, and manage the response to the consequences of the global crisis.

In FY09, the United Kingdom, Canada, Italy, Norway and Russia—as well as the World Bank and the Gates Foundation—joined forces to launch the Advance Market Commitment for vaccines, a new market-based mechanism to cut the cost of drugs for life-threatening and pervasive diseases in the developing world. The AMC platform is being supported through the IBRD’s balance sheet, effectively insuring the full value of the US$1.5 billion from donors that provides the AMC incentive to vaccine manufacturers.

Commitments from the International Development Association (IDA), which provides interest-free loans and grants to the world’s 79 poorest countries, totaled a record US$14 billion in FY09, up 25% from US$11.2 billion in FY08. This included US$11.4 billion in credits and US$2.6 billion in grants to support 177 operations. To rapidly support countries affected by the crisis, US$990 million of this lending was provided under an IDA Fast-Track facility.

As the largest provider of multilateral financing for the private sector in the developing world, the Bank Group’s International Finance Corporation (IFC) played an important role as the crisis deepened. IFC launched an array of crisis-response initiatives, including:

• A US$3 billion IFC Capitalization Fund to strengthen systemically important banks, with a leveraged impact of as much as US$75 billion;
• A US$5 billion Global Trade Liquidity Program to help reverse the decline in trade flows to support as much as US$50 billion in trade; and
• A US$2.4 billion Infrastructure Crisis Facility to ensure that projects critical for development get built.

In addition, IFC introduced the US$500 million Microfinance Enhancement Facility to provide credit to micro enterprises, and expanded advisory services aimed at helping clients manage risks and address non-performing loans.

“This has been an extraordinary year,"said Lars Thunell, IFC Executive Vice President and CEO. “The economic crisis has had the greatest impact on the poor and through IFC’s innovation and speed we have been able to target our response to where it is needed most.”

During the crisis, IFC maintained its strategic focus on the poorest countries and regions. In FY09, IFC financing for private sector development decreased to US$15 billion from a record high of US$16.2 billion in FY08. The FY09 amount included US$4.5 billion mobilized through syndications and structured finance. The number of IFC projects rose 18% to 440, of which half were in IDA countries

Despite the very difficult external environment, the Bank Group’s political risk insurance agency, the Multilateral Investment Guarantee Agency (MIGA) issued US$1.4 billion in guarantees. “This past fiscal year was challenging for MIGA due to uncertainty resulting from the global economic crisis and reduced investment flows,” said Izumi Kobayashi, MIGA’s Executive Vice President. “In this environment, we continued to focus on meeting client needs and achieving strong development impact and worked hard to position MIGA for the future and recovery in the market.”

Commitments from the World Bank Group to sub-Saharan African countries—the Bank’s top priority—rose to US$9.9 billion in FY09, up 36% from US$7.3 billion in FY08. This included US$7.8 billion from IDA, or 56% of total IDA commitments; US$1.7 billion from IFC; US$50.1 million in MIGA guarantees for projects in the region; and US$362 million from IBRD.