The World Bank Group consists of 5 closely associated institutions. The International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and The International Centre for Settlement of Investment Disputes (ICSID).
The World Bank Group’s mission is to reduce poverty and encourage economic growth and thereby contributing to the achievement of the Millennium Development Goals. Through its five institutions, the World Bank Group works in more than 100 developing economies, providing loans, grants, policy advice and technical assistance to improve living standards and eliminate poverty.
The World Bank Group is one of the world’s largest sources of funding and knowledge for developing countries. The World Bank grants loans to member states who have little or no creditworthiness on the international capital markets. Another strength of the World Bank Group is its analytical capacity and ability to provide advice to member states, its global mandate and reach and close collaboration with borrowing countries, development partners and other multilateral institutions. The policies of the Bank are generally in line with Denmark’s development priorities. For instance it has been decided that the special themes for the next round of lending from the soft window of the Bank – IDA16 - will be crisis response, gender, climate change and fragile states.
Denmark is influencing the Bank through high-level consultations, inputs to Board discussions, the Spring- and Annual Meetings and through the IDA replenishment negotiations. Other instruments of influence are co-financing agreements, trust fund agreements and donor coordination.
The International Bank for Reconstruction and Development (IBRD)
IBRD offers loans, guarantees and analytical and advisory services to middle-income countries and creditworthy poorer countries in Latin America, Asia, Africa and Eastern Europe. It provides its clients with access to capital on favourable terms in larger volumes, with longer maturities and in a more sustainable manner than the market. IBRD raises most of its funding by selling bonds on the international capital markets. The surplus generated from IBRD lending is to a large extent used to extend grants and loans on very favourable terms to low-income countries through IDA.
Together with Finland, Norway, Sweden, Iceland, Estonia, Latvia and Lithuania Denmark participates in the Nordic-Baltic constituency. The Nordic-Baltic constituency controls 3.08 % of the votes in IBRD, of which Denmark holds 0.76%.
The International Development Association (IDA)
IDA provides grants and loans with 40 year maturity and no interest to the poorest countries to help cover the cost of lifting people out of poverty, including the cost of providing essential services in education, health water and sanitation.
IDA credits are granted to developing countries with a GDP per capita of less than $1,135, and which do not – or only to a limited extend – have access to commercial lending and IBRD loans.
In the fiscal year of 2009 IDA made commitments amounting to $14 billion for 177 new operations in 63 countries.
Denmark has contributed to IDA since its inception in 1960, with an overall contribution of 1.4 % of total funding. In total, IDA has provided around $207 billion US $ in credits and grants to low-income countries since its start. At the IDA16 replenishment, covering the period from 2011-2014, Denmark pledged approx. 2.2 billion DKK.
The International Finance Corporation (IFC)
IFC aims to stimulate growth through its support to the private sector. IFC facilitates private investment in regions and sectors not otherwise favored by private investors.
IFC is the largest single publicly funded source of financing of investments in the private sector in developing countries. It invests in and provides loans to private enterprises. It also provides advice on a range of business related topics and counseling to partners on mobilization of capital. IFC invests in projects which are considered commercially sustainable, but cannot obtain financing or technical assistance from other sources.
Multilateral Investment Guarantee Agency (MIGA)
MIGA supports foreign investment in the developing countries by insuring against non-commercial risks, such as political unrest, currency constraints etc.
The Multilateral Investment Guarantee Agency (MIGA) was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies. Through emission of guarantees, counseling and legal assistance, MIGA helps developing countries to attract and retain private investment.
The International Centre for Settlement of Investment Disputes (ICSID)
ICSID is an international organ for settlement of disputes arising in connection with foreign investments in the member states of the Bank.
ICSID was established in 1966 as an independent international organization under the World Bank Group. It intermediates in investment disputes between a government and a private foreign investor.