Partnerships in Action: How Trust Funds and FIFs Embody Partnership

[Srimathi Sridhar]
Good afternoon, everyone. A warm welcome to everyone in the room, and also to everyone that is joining us online from around the world. It's great to have you here for our session Partnerships in Action, the launch of the 2024 World Bank Group Trust Fund Annual Report. I'm Srimathi Sridhar from the World Bank, and I'm delighted to be here with you for the next 90 minutes as we hear from two fantastic panels and speakers on how trust funds and financial intermediary funds, or FIFs, help us to coordinate, innovate, and catalyze development action. Now, we'll have time at the very end for Q&A, so I just ask you to hold onto your questions until we get to the end of the session. Now, with that being said, I want to turn everyone's attention to the big screen here behind me where we're going to play a quick video that will showcase the role and impact of trust funds and FIFs. To end extreme poverty and boost shared prosperity on a livable planet, we must work together. Trust funds and financial intermediary funds, or FIFs, offer established pathways to build partnerships and mobilize additional funding to address today's development challenge. The World Bank Group manages a diverse portfolio of trust funds. More than 100 sovereign governments, as well as foundations, philanthropies, non-governmental organizations and private companies provide resources to support nearly every area of development worldwide. In parallel, the World Bank Group provides financial and administrative services to 27 large-scale FIFs established and led by the international community to address global challenges. Trust funds and FIF support the World Bank Group in coordinating, innovating, and catalyzing development action around the world. The grants and highly concessional resources that trust funds and FIFs provide compliment World Bank Group operations, expanding their scope and enhancing their quality. Trust funds and FIFs have a powerful impact by targeting resources to issues of global concern, funding knowledge work that drives results, and taking on risk to encourage investment and experimentation that can help solve the most entrenched development challenges. Trust funds and FIF resources are flexible, enabling the World Bank Group to respond quickly to emergencies and support places otherwise out of reach. Trust funds and FIF resources are a part of the World Bank Groups evolution to meet heightened demand for support with speed, scale, and impact. Working together, we can coordinate, innovate, and catalyze development action to create a world free of poverty on a livable planet. How's that for a nice scene setter? I'm going to say a huge congrats to everyone that was involved in the production of that video. And I'd now like to turn over to Maitreyi Bordia Das, the Director for Trust Funds and Partner Relations at the World Bank to introduce the Trust Fund Annual Report.

[Maitreyi Bordia Das]
Thank you so much, Sri, and real pleasure to be here amongst you all at the launch of the Trust Fund Annual Report 2024. This is a moment of manifest for us. It's the first time the annual report is being launched as part of the Trust Fund Forum. It's the first time that the annual report is being launched externally, it's being live streamed and it has several external thought leaders as part of our panels, so that's a first. And finally, for the first time, the Trust Fund Annual Report isn't just a report, it's actually also a microsite which you can access from the World Bank Live page as well. So there are many ways in which this is quite different from previous years and that's why this is a moment of great excitement for the team that has been working on this for the last several months. Why is it so? That's a question that I've asked myself, is why is it that we are doing this so differently this year? And there are a few reasons why this is happening. And the first reason is that there is much greater external scrutiny, external interest, in these trust funds and financial intermediary funds that were previously considered just World Bank things or World Bank Group things. They're actually not just World Bank Group things, they are part of the much larger concessional finance architecture, and that's why there is this external interest. This external interest is also fueled by the fact that the World Bank has been in a process of evolution. We have an evolution roadmap, and the evolution roadmap also draws attention to these very scarce concessional resources. As a result, we took it as an opportunity to think about our Trust Fund Annual Report in a way that was different from our previous reports. For external audiences that probably haven't had much of an understanding of trust funds and financial intermediary funds, I just want to say that trust funds, as the name may or may not suggest, are actually funds that are given to us by donors, us being the World Bank Group, for specific purposes. They are managed by the World Bank Group, so World Bank, IFC, and MIGA, for certain results, for certain ends. So those are the trust funds. The financial intermediary funds, on the other hand, are also given by donors for specific sector-specific. They're like sector-specific vertical funds. The decision maker is not the World Bank or the World Bank group. The decision makers are independent governing bodies of financial intermediary funds. And now to give you a bit of a scale, what is the scale of these funds? And there are many metrics by which we could measure scale. I'm going to use disbursements or transfers out in the last year or in the last five years. As far as trust funds are concerned, in the last year, we have disbursed over $10 billion. And as far as financial intermediary funds are concerned, over a five-year period, we have disbursed about, we have not disbursed, actually, we have transferred from these financial intermediary funds also about $10 billion. So that's the scale of these funds. And some may argue, depending on where you come from, is this a large amount or is this a small amount? To give you some kind of a benchmark, IDA, IBRD disbursements to the tune of 50 to $51 billion a year. So that's where these trust funds and financial intermediary funds fit into the larger architecture That the World Bank Group is a part of. A couple of other things about these funds that people may or may not know, about trust funds in particular, more than 80% of trust funds are actually executed by countries. They are not executed by the World Bank, they are country-specific funds, what we call recipient-executed trust funds. So that's something to really keep in mind, is that over 80% of them are recipient-executed. And the second thing to keep in mind is that over 80% of them go to situations that are fragile and conflict situations. So these are in effect, first responders, when there is a crisis, when there is an emergency, when there is war, when the World Bank through IDA and IBRD cannot go into those countries, that's where trust funds go. Not financial intermediary funds, because they have different mechanisms, but trust funds go where World Bank Group otherwise cannot go. Another thing to remember about trust funds are that they contribute to two thirds of the knowledge work, the research work that takes place in the World Bank Group. And as you know, the research work in the World Bank is globally recognized. Two thirds of them are trust funded, at least, contributed by trust funds. And then finally, and this is something that is quite dear to my heart, because much of what I've done at the World Bank I would never have been able to do without trust funds, is that trust funds are financiers of innovation, of experimentation, and of new things that can later be scaled up. Many of us say that some of the biggest ideas in the World Bank that are being implemented right now have a trust fund behind them. There's always historically a trust fund behind them. Final point about trust funds and financial intermediary funds that we implement, they are always complimentary to our main game, which is IDA and IBRD. So with that, let me hand it back to you, Sri.

[Srimathi Sridhar]
Well, thank you so much, Maitreyi, for those great opening remarks on the Trust Fund Annual Report, and for setting the stage for what I think promises to be an excellent session ahead. I'd like to now introduce our first panel discussion for this session titled, Partnering Across the World Bank Group. It'll be moderated by my colleague, Juri Oka, Lead Specialist for Trust Funds and Partner Relations at the World Bank. And our esteemed guests for this session include Akihiko Nishio, Vice President for Development Finance at the World Bank, Alfonso Garcia Mora, Regional Vice President for Europe, Latin America, and the Caribbean at the International Finance Corporation. And Junaid Kamal Ahmad, Vice President for operations at MIGA. Please give them a warm welcome. And Juri, over to you.

[audience clapping]

[Juri Oka]
Thank you, Sri. And good morning, good afternoon, and good evening. Welcome to this first panel session on Partnering Across the World Bank Group. My name is Juri Oka, and I have the privilege and honor to be moderating this panel with our esteemed vice presidents from the World Bank, IFC and MIGA. Now, we have 25 minutes for this session. I'll be going through two rounds of questions with panel members, having about three minutes to respond. And I'm sure you want to hear from them, so let me turn to the questions already. First, perhaps, I can turn to Akihiko, and I want to take the opportunity to congratulate Akihiko for the record Historic Replenishment for IDA. Now, the world is facing multiple overlapping crisis where in many places’ development is stalling or even reversing. And so we need to maximize the available funding that we have. So the question to you, Akihiko, is how does World Bank Trust Fund complement the IBRD and IDA financing to foster a collective action for greater development impact? So, over to you, Akihiko.

[Akihiko Nishio]
Great. Thank you very much, Juri, and thank you for your kind words. I'd like to start by sharing my personal experience. Now, once upon a time, I was in the trenches.

[audience laughing]
This is a long time ago. But I was, what they call, a task team leader leading projects. And I was working in East Asia, in the rural development sector, and I spent a lot of my time looking for trust funds. And thank God, the process of locating trust fund resources has gotten much better than before. But in the past, I used to make phone calls, I used to ask people where I can find them. And the reason why I looked for them is because the trust funds allowed me to do things that I can't with IDA and IBRD. And these were some really important things. Now, Maitreyi already touched on some of them, so piloting new approaches, innovative approaches, channeling funds to those stakeholders that we cannot channel IDA or IBRD resources to, for instance, the NGOs, the civil society, and also countries which do not get enough of the country allocations from IDA or IBRD for all kinds of reasons, mainly related to conflict. So for all these reasons I needed trust funds. And the trust funds, I think, in that sense are extremely complimentary to what IDA and IBRD can do. And will just give you a couple of examples to illustrate this point. A trust fund called the Japan Social Development Fund, JSDF, it is designed to reach the poor and the most vulnerable. And that is funded directly to the NGOs and CSOs to experiment with new innovative approaches in community development. Another example is the trust fund we have for Zimbabwe. Now, Zimbabwe has arrears to IDA and IBRD, and we have not been able to lend directly to Zimbabwe. But we have a trust fund which enable us to help them on some key things. So we have the capability of using the trust funds to achieve these kinds of objectives that you cannot do with IDA and IBRD. So in that sense, I think it's extremely important as we go forward to make the best of the trust fund resources and how we can use the totality of the resources that we have, not only IBRD, IDA, but also trust funds and FIFs to serve the needs of the clients who are facing this overlapping crisis that Juri mentioned. Let me stop here.

[Juri Oka]
Thank you very much, Akihiko, for sharing also your experience. I'd like to turn now to Alfonso to share a little bit about how trust funds are being used in IFC, especially to support the environment for private sector, and also to capitalize innovations and innovative solutions for development. So, over to you, Alfonso.

[Alfonso Gracia Mora]
Thank you very much, and good afternoon, everybody. And thank you, Akihiko and Maitreyi. I lost her. I don't know where she was. There she is. Thank you for inviting me to represent IFC in this panel. Megan is here with me, who is the one who really knows what we do with trust funds in IFC. But I'm happy to share my views as Akihiko was doing. Also, not going a little bit back in the times when we work together at the bank, thinking on one thing, one case that I really wanted to bring to your attention, to understand how in the World Bank Group Trust Funds can really help. So at that time, I was in the World Bank, and I was leading one team that was related to competitiveness and creating private sector conditions in our client countries. And actually, we use Big Time FIAs, we use MCPP, we use those type of trust funds that you know well that we used to have, and that we use very often to work on, what is called, Investment Climate. Then I moved to IFC. And actually, I use exactly the same trust funds to solve exactly the same problems, but from a different perspective. Which is a great way of trying to bring how the World Bank Group things that we believe are really fragmented and are really just dealing from one institution, are at the core of what we do as World Bank Group from different angles and different perspectives. And I'm bringing this because I believe that one of the key things that we use trust funds for is to what we call created Markets. And created markets is at the core, you know very well, it was at the core of IFC3.0, and it is at the core of the World Bank Group evolution roadmap, which is in a way working much closely and bringing much more intentionally, the private sector and private sector solutions to development challenges that we have. And there is what I think that trust funds can make a big difference. Because at the end of the day, this is additional financing support that we need to intentionally tackle specific actions and specific problems that we see either crosscutting in different countries or in one country in depth. And to give you a few examples on that, I think that the FIAs I already mentioned it, but you know there are a few examples that has also, in my view, made a huge difference when thinking on how we can make a difference. One is PPPs, public-private partnerships. This is absolutely fundamental instrument that we are seeing used by many countries to finance infrastructure that they need. You know very well that we have BPIF, we have different initiatives with trust funds that we have been using, GIF, et cetera, to prepare projects, to really think us, or help us to design projects to make them bankable so that we could actually catalyze and we could bring in uncrowding private capital. We use trust funds to finance or to help us financing and structuring many of the PPPs that we structure across the world. We are the institution in the world that actually advise more governments on how to use PPPs in a way that can be impactful in the infrastructure that they need to finance. And that we do that thinking that this has to be done in a responsible way. And when I'm saying responsible way, meaning from a fiscal responsible perspective, because you know that PPPs have been used as well in the past, not in such a responsible way, creating potential contingency problems. But we, world Bank Group, again, I come back to the World Bank Group story, we do that, World Bank, IFC, MIGA, thinking on how these type of solutions can really bring an impact. And let me finish with an innovative or innovation use of trust funds, which has also been quite impactful, and again, brings together the World Bank Group together. And it is the definition and the design of green taxonomies. You know that there are more than 50 different green taxonomies in the world. We are all talking about climate finance. We all want to mobilize private capital for climate and for green finance, but we have 50 different ways of understanding what a green bond or a green loan means. So these 50 taxonomies do not make easy, or do not make the work of investors easy, because when they have to take decisions, they need to actually, in this country, what is the taxonomy that they have? What are the standards that these are using? So because of that, we, again, intentionally, as a World Bank group, decided to try to help countries to define taxonomies that can be interoperable, and that can be understood as the same type of standards across the market. And we, using trust funds, we have been working in Europe in many different countries together to define from the regulatory perspective, meaning central banks, how this taxonomy should look like, but also thinking what actually the private sector needed to do in order to adapt to those taxonomies. Because one of the worst things that we have developing community in history done is when we define policies and regulations, giving the back to the private sector, because then those policies and regulations do not actually work when we try to implement them. So that green taxonomy is a good example of bringing the two sides of the table to the same solution, to the same problem, defining ways in which we can really make a difference. This is another use, innovative use, of the trust funds that we have been using in the last two years, three years, but this year has been particularly impactful, in my view, because of the number of central banks that have defined these taxonomies according to the same standards. Let me stop here.

[Juri Oka]
Thank you so much Alfonso for sharing with us the placement of trust funds and IFC strategy, as well as the examples that you shared on the PPPs and the green finance taxonomy. Now turning to Junaid, I would like to draw on his vast experience, not just with MIGA, but also with the World Bank, where he had among other positions, held a Country Director for India and also as a Senior Director for Water. So how are MIGA trust funds helping to catalyze World Bank Group investments at the country to achieve impact?

[Junaid Kamal Ahmad]
Thank you. When President Banga joined the World Bank, he said that he has a secret weapon, it's called MIGA, except he said that his problem was it's too secret. So for me to explain to you how trust funds are used by MIGA, let me reveal the secret to you about the business model of MIGA, and then you'll see how trust funds fit in to the way we work. So, MIGA, unlike my colleagues on the left, is not a lending institution. We do not lend any money to anyone. What we do is we intermediate between capital markets, financial markets, and development needs. So basically, we enable private finance to come into development. And the way we do that is by providing guarantees, guarantees against non-commercial risks, so political uncertainty, regulatory uncertainty. And the power of what we do, I think is best revealed in the numbers. We were created in 1988 with $366 million, and that's the only capitalization that we ever got from all of you. And that 366 million over the years has been converted to $85 billion of guarantees. That's a leveraging power of one is to 15. So for every $1 that we have of our capital that we put into a guarantee, we bring in $15 of private finance. But we don't stop there, for every dollar we guarantee, we reinsure 65 cents. In fact, it's even gone up to 70 cents into private reinsurers. So the ability to reinsure and syndicate our risk, as well as draw in private capital, that's how we become a leveraging institution. And this is a very pivotal moment for us in the World Bank because we've been asked by client countries, yes, to the lending role that we play, but can we play a leveraging role? And to pivot the World Bank from being a lending institution to becoming a leveraging institution requires this kind of leveraging power. And it's into that story that we bring in the trust fund. So, for example we have a trust fund which is the Conflict-Affected and Fragile Economies Facility, this trust fund, for every dollar of this trust fund, we're able to leverage in $15 of private finance into countries. We are able to use the PSW, private sector wind of IDA to do the leveraging. I'll give you an example. In a very difficult time for Ethiopia, as a result of the work that IDA did on the regulatory policy of telecom in Ethiopia, and the PPP arrangements that IFC did, we were able to support, for $175 million of World Bank Capital, we were able to bring in a billion dollar of equity into the first telecom private operator in Ethiopia. That we were able to do because 75 million was PSW first loss, and that's what enabled us to attract reinsurers, even the most difficult situation of Ethiopia. What trust funds enable us to do is to bring in first loss and therefore reduce the cost of capital for countries. And where reinsurance is not available, we are able to use trust funds to actually bring in reinsurance, which means that we're able to use guarantees in the toughest of places where the risk is the highest. Without that kind of support, we would not have been able to go into conflict areas, we would not have been able to go into IDA countries, we have not been able to go into, what I believe, are some of the toughest regulatory uncertainty. Today when people ask us where do we put most of our guarantees, one third of our guarantee is in Sub-Saharan Africa, and that's because of IDA, PSW, or because of the trust funds that we have. So that's how trust funds really fit into our business model of leveraging.

[Juri Oka]
Great. Now, thank you so much. So we have less than 10 minutes actually, for the next round. So maybe I have to ask the panel members to be a little bit shorter on their responses. Apologies for that, because I actually personally would like to hear more. So the world is facing many global challenges, whether it's climate, food security, fragility and conflict, pandemics, so turning to Akihiko, how are concessional financing from trust funds and resources from the financial intermediary funds incentivizing and encouraging countries to do more on the global challenges? Over to you.

[Akihiko Nishio]
Thank you, Juri. I will try to speak very quickly. So I see four ways with which that can be done. First is to provide technical assistance to prepare projects that address cross border externalities. And typically they take more financial resources, also countries do not usually borrow for activities like this, so trust funds and FIFs will be extremely useful. Second, is straight financing of global challenges, for instance, the pandemic preparedness. There are trust funds like the HRATF which provides straight financing for these things. Number three is subsidizing IBRD loans. IDA is very concessional, so we don't really need to worry about them. But IBRD is market based, and if you want IBRD borrowers to take on more loans to address global challenges, then trust funds and FIFs could actually be very helpful. In fact, this is one of the tactics that we are consciously trying to take with the evolution roadmap. Now, there are a couple of examples that already take this approach. One is the GCFF, which incentivizes IBRD borrowers and IDA borrowers actually, to borrow for refugee relief operations. Now, the other one hasn't really started yet but we're going to start very soon for fundraising, which is Livable Planet Fund. And that is also designed to provide subsidy to incentivize IBRD borrowers to borrow for global public goods. And last one, now this is a more radical idea, and which has not been done yet, is to have direct transfers of resources from trust funds and FIFs into IDA. And that will enable these funds to be leveraged, and to be used for global public goods, or for that matter, any other important priority. But I think this will achieve the objective of achieving volume with adequate concessionally. Let me stop there.

[Juri Oka]
Thank you so much, Akihiko. So turning back to Alfonso, just to hear a little bit more on the IFC side, how are trust funds deepening the partnership with the private sector, and also mobilizing private capital for some of these global development challenges? The Alfonso Gracia Mora]
So thank you for that. This is a super critical question because the two big areas where we use trust funds, it is for creating markets, what I was mentioning before, preparing upstream projects, et cetera, and second is blended finance. So these are the two big pillars of our strategy. Sixty eight percent of all the advisory and upstream that we do in IFC, so more than two thirds, is trust funded, has trust funds. So we have more than 700 projects, and this is what I mentioned before in my first intervention. But then when we look at the blended finance, this is absolutely critical in two ways. One, when we go to small countries, and fragile countries, and difficult countries, because you know that IFC cannot do operations if it is not at commercial terms. And to do operations or investments at commercial terms, in many cases, we need concessional finance, which is the combination of both these concessional finance and the commercial finance, what brings blended finance to the table. But second, when we try to innovate, when we are things that by the definition, because it is innovation, the premium is very high, and therefore it is impossible to bring the private sector unless with the risk, the investment. So these are the two big allocations of blended finance that we do. An example of the first one is the work that we do in Ukraine. This year, we were actually, thanks to many of you, quite successful in raising blended finance from the European Commission, from France, from UK, from Netherlands, from Switzerland, from Spain. And this gave us more than $600 million of blended finance, out of which we actually we were able to invest $2 billion in Ukraine, which will have been totally impossible without blended finance. Because as you can imagine, if you are a private sector investor investing in Ukraine without other risking instrument, it could be almost impossible. So this is one very clear example. The second one could be Haiti. We are investing these days in Haiti in solar energy. Without blended finance, without concessional finance, would be very difficult to bring solar energy to Haiti. So another good example of how we do it. And taking these to the big numbers, last year the program that we delivered in IFC was close to between $56 billion, which was a historical record. This 56 billion dollars was based on a 25 billion, approximately, of own account, our own capital and another 25 or 26 billion of mobilization. So basically, for every dollar that we use from our own account, we mobilize another one. The objective is to multiply that by five, so to really go beyond these numbers and to really try to think how can we mobilize more. So basically, how can we use our capital and donor's capital as seed financing, as first loss, as equity tranches, as medicine in tranches to really try to mobilize as much as we can from the private sector. Because our big idea is that it is impossible, absolutely impossible to achieve the development goals that we have if we don't mobilize private capital. And the best way to mobilize this private capital is using instruments like guarantees for sure, doing the relevant and the right regulatory and policy reforms that can open markets, but also thinking on financial structures that can leverage private capital, and the risk private capital. Because otherwise the investors sitting in any of the worst in the European or developed world will have many difficulties in allocating those funds to developing countries if the return is not significantly higher or if the risk is not lower than the one that they can get in their own markets. So that's the objective of this blended finance. And I can say that actually I'm very proud to be part of an institution that is absolutely transparent with the use of the blended finance. And as you well know, we publish all the blended finance that we use and the terms in which we use it, and we are the only DFI in the world that does it. Thank you.

[Juri Oka]
Thank you very much, Alfonso. So, Junaid, earlier you had recently mentioned about the role of MIGA trusts and guarantees in fragile and conflict settings. So if you would like to share a little bit more of that, that would greatly appreciated.

[Junaid Kamal Ahmad]
One of the principles of insurance is you never insure a burning house. But we're not a private reinsurance agency, we're a development finance institution. Where it is very difficult, where private reinsurers, private money does not go in, we want to go in with guarantees, we still want to leverage in private sector. And so we use our trust funds in those contexts. So in the context of Ukraine, for every dollar of Ukraine trust fund that we have, we are able to leverage one is to four, because that money is actually being used as first loss and to provide public reinsurance, because private reinsurers are not there. We've recently been able to open industrial logistics park away from where the war is so that we could move the industries into more safe area. Similarly, we have a West Bank Gaza trust fund. And here the trust fund allows us to do something very innovative. We're able to guarantee local finance rather than guaranteeing international finance coming in. This innovation is something that actually we think in MIGA, it's time for our shareholders, the convention holders, to actually allow MIGA to actually guarantee local investment. Because if local investors invest, international investors will follow. Another example, and so in the case of West Bank Gaza, we provided guarantees for an incredible data-growing agency which had many of the of the jobs. And of course, because of the war completely destroyed, we're now actually paying the investor for the loss. Somalia, in the middle of a war, we're able to do a renewable energy for 30,000 households. This is a type of investment that we could not do without trust fund. Two quick points, if I may add, I've been listening to the conversations about FIF, MIGA is unable to access FIFs, because FIFs follow the traditional model of project lending, even if it's grant, not guarantees that are there, that we can leverage one is to 15 according to our own ability. The second thing I want to say, and especially with all of you around here, is that guarantees are becoming, how shall I say, the new magic bullet. And almost everyone wants to do a guarantee. Let me say that if everyone starts doing guarantees, there's going to be fragmentation in the guarantee market. There are 40 reinsurers in the world that we're able to bargain with. But if the fragmentation happen, everyone puts in their guarantee, it's really going to ruin the market of being able to bring in private. And this is a very serious issue. G20 has said that MIGA ought to be the guarantor of all the MDBs. For us to play that role, it's important that bilateral not bifurcate the market. This is a very important plea. If we're going to get money into the capital markets into climate finance, this fragmentation is something that needs to be looked at. And the final point, Basel does not recognize fully the mitigation power of partial risk guarantee. This is also preventing us from bringing in some of the European and American markets finance into climate finance. So there's a real story of guarantees playing a big role, but there's some serious discussions that need to happen at the G7 and G20 level making sure that this does not become a fragmented market.

[Juri Oka]
Thank you very much. I think we all would love to hear from our esteemed panelists a little bit longer, but unfortunately, we're out of time. And so we'll be wrapping up this session. There will be an opportunity to ask questions at the end of the second session. Just to wrap up, I think we've heard a lot from our three vice presidents from the World Bank, IFC and MIGA on how trust funds and also resources from FIFs complement the core financing available at the World Bank, IFC and MIGA to do much more than what we can do with our core financing, whether it's in fragile context, whether it's in innovation and experimentation, whether it's to mobilize private capital, or to open up space to work with our private sector for a development. So let me stop here and turn this back to Shri. Over to you.

[Srimathi Sridhar]
Thank you so much, Juri, and of course, a huge thanks to Akihiko, Alfonso, and Junaid for that excellent conversation. We're going to move right along to our next panel of the session. Is titled Partnerships in Action. And it'll delve into the practical implications of trust funds and FIFs in mobilizing partnerships to tackle global challenges. Our very own, Maitreyi Bordia Das, the Director for Trust Funds and Partner Relations at the World Bank, will moderate this panel. And joining her will be Annalisa Prizzon, Principal Research Fellow Development and Public Finance at ODI Global. Dan Peters, Senior Program Officer, Development Policy and Finance for the Bill and Belinda Gates Foundation. Hana AlHashimi, Head of the Office at the Special Envoy for Climate Change of the United Arab Emirates. And Tim Wainwright, Chief Executive for Water Aid, UK. Please give them all a warm welcome. And, Maitreyi, over to you.

[Maitreyi Bordia Das]
Thanks again, Sri.

[audience clapping]
Thank you. And thanks very much to my panel for being here. I think that this is really good- it's a good transition from the last panel that set out the World Bank Group Trust Funds and what it meant to have these trust funds for the broader development agenda as we are pursuing right now. I'm actually delighted to have four external influencers with us right now to be able to help us reflect on, not just the Trust Fund Annual Report, but on trust funds and financial intermediary funds in general. So let me start with you, Hana. And to say to you that the UAE has been really pushing forward on the climate agenda, not just through COP 28, but also beyond. I want to ask you, what has been the overall strategy of the UAE as far as financing for climate is concerned? And where do you see trust funds, financial intermediary funds in that broader strategy that your country has been pursuing? Over to you, Hana.

[Hana AlHashimi]
Thank you so very much, Maitreyi, and it's a pleasure to join you. Congratulations on the launch of the report. We definitely salute the transparency and the openness in sharing the progress from trust funds. And congratulations also to the previous panel. I think there was really important insights on some of the work that's happening already, and where we can learn, and where it is that we can absolutely do more. Coming from the UAE, we are certainly a highly interconnected country that is, if I may say in this format, obsessed about the future. I previously reported to the Minister of State for the Future. Her previous title was For Happiness and Wellbeing. And this is very much in the DNA of our country, which is looking at how it is that you can create a development model that puts people at the center that allows us to continue to thrive for generations to come. And these days the climate is at the heart of them. And so a lot of our focus when it comes to our own climate policy, whether it was our Net Zero strategic initiative, which was the first in the region, the $163 billion platform or platform that was attached to that in terms of looking at our own development, the investments that we make in over 70 countries are worldwide in their energy transition. The work that we're doing through Altera and trying to look at blended finance in the order of $30 billion with a focus on channeling finance to the South. When it comes to all of that, the question is how it is that we can create sustainable development models that are based on climate action? Which we believe has to happen given what science tells us is a window to act and given the need to ensure that nobody is left behind. And so our own development story is one that was certainly not in isolation. When we say finance development corporation, international corporations, part of IDNA, an example I can give is that our development fund was created at the same year as our country, which was 1971. And I think that's just an example of how it is that we work in cooperation with all countries, but also recognize that we cannot work alone. And our development story is also one that was built by the 200 nationalities that currently live in harmony, probably in in the UAE itself. But where we are is in an age of global interdependence. And partnerships are absolutely key to addressing these challenges and needs. The trust funds and FIFs that were working with the bank are very helpful to respond to the emerging challenges that we have, and to be able to target high impact unnecessary interventions. One example that I can give is the Methane Trust Fund for which we've committed a hundred million dollars through the bank. The idea is to look at a challenge that not many are looking at, but a potentially high impact solution, and looking at how we can operationalize the Global Methane Pledge that came out of COP28, which is to cut 30% of methane emissions by 2030, bearing in mind that methane actually traps heat in a magnitude that's 30 times more than carbon dioxide, which gets all the credit. And so actually looking at something that's very doable that we have a lot of experience with as a country ourselves, and actually being able to address as a challenge, and looking at how it is that we can work with partners to get to scale. The idea of going for a trust fund approach in the bank was because we work with a lot of partners that are not on the boards of the bank, that are not traditional donors, including philanthropy, the private sector, but critically oil and gas companies, which are essential to tackling methane and to being able to slash emissions. And while we are currently the largest contributor to the fund, we do believe that there's a high potential to be able to get more on board, and to have non-traditional donors on board as well. There are five FIFs that we currently work with. One is the Pandemic Fund. They all highlight challenges that are maybe short-term or that don't necessarily have a lot of focus through other funds. The Women in Finance Initiative, there's the Global Partnership for Education as well as the Consultative Group on International Agricultural Research. And most recently in what we had the chance to unpack in the previous session, the fund for responding to loss and damage. Which I think is another example of where the international community in the 198 parties to the UNFCCC identified the bank and a FIF model as a way to address a massive gap that we had in the system in being able to demonstrate global solidarity for countries that were already facing climate impacts, and how it is that we can benefit from the institutional foundations of MDBs while broadening the reach, responding to emerging challenges and reaching fragile context that you had spoken about. So very much welcome this platform, and I'm looking forward to hearing from fellow panelists on their benefits and keen to continue to work under this umbrella of international corporation. Thank you.

[Maitreyi Bordia Das]
Fantastic. Thank you very much for that, Hana. With that I'll turn to you, Annalisa. And Annalisa, you are a very well-known commentator on many things including MDB reform, including concessional architecture, including where the G20 is going with the concessionally, and have had an eye, certainly on IDA, but also on trust funds and FIFs. I think what I would like to ask you is that, given both the evolution roadmap of the World Bank, given the MDB roadmap, given all of these other things that are happening in the context of multilateralism, where do you see the role for trust funds and FIFs, and what would be your advice to us?

[Annalisa Prizzon]
Thank you very much, Maitreyi. And hello to everyone here in Paris to those online. So let me just reflect on potential roles for FIFs and trust funds. And I hope everyone in the room and online will tolerate a certain degree of simplification, because of course, the landscape is very complex. We have single, multi-donor trust funds, we have different FIFs by country, so very much different roles. And I would like to point out, if I can say very briefly, of four potential roles for trust funds and FIFs in this context where we have a growing number of challenges. The audience is even greater, and we are in a situation where the spectrum of financing options is actually shrinking, and the level of concessionally is going down. So I will make four points. First of all is about unlocking finance, and I would like to elaborate on some of the points that were made earlier on. I will be very quick in terms of help overcoming some restrictions, so funding restriction and allocation rules, actually, where flexibility is urgent, and targeted resources are needed. We haven't spoken a lot about reducing the administrative burden on government officials, actually in the spirit of maximizing development impact and scarce resources, and also taking advantage of specialization. So what about unlocking finance? The title of the session, and we have the banner behind us, is Partnership For Action. And actually, it's very spot on in describing what I'm going to say right now. We need to remind ourselves that not all funding from MDBs meets concessionally requirements. So even though finance is available, the terms of conditions are sometimes considered relatively expensive, might not meet that management requirements, and parliament in the end won't approve them. So most finances from trust funds and FIFs, however, grants, and we know how scarce grants are, and by combining these grants with less concessional finance, we can unlock those resources that, as a standalone, might have not been utilized. So combining grants, a programmatic approach, we heard that earlier on in the day, where non-concessional finance can really help an overall program meet concessionally criteria and then be approved. When it comes to overcoming funding restrictions and allocation rules, we already spoken in the earlier panel around the fact that core resources cannot be used in protracted crisis or where there are de facto governments. But at the same time, we need to recall that it's very important to support countries that can only borrow non-concessional terms from the World Bank and the other IFIs to support projects on renewable energy and pandemic preparedness. And I would like to reiterate what Alphonso mentioned earlier on, is about vital investment for project preparation and upstream support to market creation. I won't spend too much time on reducing the management burden on government officials. This is a point many of us in the room are familiar with. When we ask government officials about the main challenges, about working with development partners and MDBs, the administrative burden and the different requirements comes on top. So we need to recall how much, by pulling resources together at the country level, development partners can help reduce the fragmentation of international cooperation. But again, my last point in terms of the role, and then I'll go very quickly if I may, Maitreyi, directly on what the World Bank can do differently. FIFs in particular often come with strong expertise and specialization. Reducing the fragmentation of the overall offer of development assistance, both in the architecture and the country level is vital to boost the effect in the scarce resources. But we should not throw the baby out of, with a bath water. A certain level of specialization and targeted approaches, and perhaps standardization, are equally vital to help countries design and implement the national strategies and development plans. I'm thinking about project preparation, and particularly one FIF then the World Bank supports is the global infrastructure facility that can play a role of a centralized repository of support tools and programs, and host focal people with comprehensive knowledge that can be developed across countries. Maitreyi can elaborate on where the World Bank may be able to improving this round. To a certain extent, if I'd been invited to this conversation three or four years ago, I may not have been particularly complimentary in here for those of you. But this was before the Reform Agenda, Umbrella 2.0. So to certain extent the issues around the lack of alignment with the core program of the World Bank is being partly addressed. It hasn't been showed earlier on, but I would urge you to look at the report because it's very informative and very well drafted, looking at the fall in the number of the funds, and also the consolidation ultimately to reduce the transaction cost and the governance cost. But there are three areas I would say where the World Bank, NSA with the shareholders as well, those of you in the room might know that my recommendations are not only for the World Bank, but also for the shareholders in the room, it's a partnership in here. And I think there are three points, communication and understanding, the second one is about boosting country ownership, and the final one is about measuring effectiveness and impact. And again, please bear with me in terms of oversimplification, this is a very complex set of issues. So I would like to really to encourage everyone in the room, and particularly online, to go through the annual report. Actually it's really clear in explaining the landscape of trust funds and FIFs at the World Bank. And I have to say, when it comes to development finance, there are so many misconceptions about FIFs and trust funds, even among seasoned experts. And I think this is not just an academic exercise, it's much more than that. And I really would encourage the bank to keep explaining us sometimes the banking assumptions. Because it was mentioned even earlier on, there is a sense that some trans funds, or matter FIFs were bank resources, cannot be accessed beyond the World Bank. It's everything but cannot true. And I think this element of education and communication should be there. The second point is about improving country ownership. The literature, and it's not about the World Bank specifically, it's about earmark funding, really shows that trust funds are not usually implemented through country systems, may not use country led frameworks, and may not have been part of a policy formulation within the country. Boosting country ownership is very difficult. It's not easy to implement. It's a long game. And some of the trust funds are there because country system cannot be used. But then, what I would encourage the World Bank staff on the ground, and also the counterparts of many shareholders on the ground, and you're already doing that, but please do that even more so, is ensuring the alignment between trust funds and development programs happening on the ground. And one final point, for me would be really important to improve where necessary, the measurement of the communication of the results and the impact of trust funds and FIFs. Again, it might sound an academic question, but why have trust funds and FIFs proliferated? We had discussions earlier today, also in previous panels. Last week we had Rachel Kyte, it's a public event. So you can watch it online. I would highly recommend looking at this. And actually she summarized very well, what something that was in my mind for a long time, many new funds, and I'm not referring just to the World Bank, I created because there is no trust that the existing funds will work in the favor of the beneficiaries. So to a certain extent, there are really strong ask to have systematic, regular public evaluation on the effectiveness of FIFs. I know this is happening for some, but not for others. Sometimes it's not in the public domain. Even for us making the case to scale up, some FIFs is very difficult because we don't have the evidence behind that. And this is very important, again, to show and communicate impact of existing structures, actually with the ultimate goal of reducing the fragmentation of the systems and maximize the impact of existing resources.

[Maitreyi Bordia Das]
Thank you.

[audience laughing]
No, thank you. I think that this is really helpful. It's going to take us a little time to really absorb and reflect everything that comes from this panel. But this is precisely why we want you here, is to really to speak to us, to help us evolve this architecture to the next level. So thanks very much. Turning to you, Dan. So the Gates Foundation is the only non-sovereign donor that we have in our top donors. And the Gates Foundation has had a longstanding association with the World Bank. And certainly many of our programs would not have got to where they are without the support and the collaboration of the Gates Foundation. I have a couple of things to ask you. One is that, what is it that you feel that the Gates Foundation gets from this collaboration, number one. And number two, where do you see the whole idea of non-sovereign entities joining forces? Because Hana mentioned that as well. She talked about the Methane Program, there could be other entities that could join, what can we do better to create these larger partnerships that would have more than just the classic donors and the classic non-sovereign donors, the less classic to join.

[Dan Peters]
Great. Thanks Maitreyi. And thanks for the opportunity to speak here today. So first of all, what is Gates' value about the relationship and partnership with the World Bank Group? And I do want emphasize the Bank Group because we have partnerships both with the bank, but also with IFC, we don't have one with MIGA yet, Junaid, but I'm sure you'll be working on that. And just as you were noting that the foundation is one of your mid-size, let's say donors, to trust funds. On the other side, I would just say we have a large group of partners that the foundation can and does work with. But the Bank Group is actually one of the foundation's top 10 largest partners. Since our establishment in 2000, we've contributed nearly $1. 8 billion to Bank Group Trust Funds over that period. And I noticed in the most recent report that's accelerating because 515 million of that was just in the last four fiscal years at the bank. So the Bank Group is quite an important partner. And I would say there are three reasons why we value this partnership so much. And first of all, is maybe looking at the synergies that we see between the Gates Foundation and the World Bank Group. From the foundation's point of view, what is core to our DNA is, and always will be, is investing in innovations, products, approaches, and other things that can help people everywhere, but particularly in low income countries live healthy and productive lives. So we make a lot of upstream investments in research and development to try to come up with these new innovations. But we're also a quite centralized organization. Nearly three quarters of the staff, the foundation are based in Seattle, Washington. And we don't have extensive presence in countries, and so we're always looking for partners with whom we can work to try to scale up these innovations. And we see the Bank Group as one of those key partners, given some of the advantages that the Bank Group has, which is universal presence in low, low- and middle-income countries, deep relationships with governments in those countries, but also with the private sector. So those are some of the synergies that we see between the foundation and the Bank Group. Second thing that we deeply value is the technical expertise that we see in the staff at the World Bank. The foundation has many world-class experts on our staff but we feel that we can have those deep technical conversations with bank staff across the various sectors that the foundation works in from health to agriculture, to digital public infrastructure. There's really that kind of engagement. And I'm going to look at Junaid again, because one of the teams that I know always pulls that out is our Water and Sanitation Team and the appreciation that they had with the dialogue with the Water Global practice when Junaid was the director there. And then finally, the foundation is very driven by data and evidence, and this is something that we see reflected in the relationship with the World Bank Group, both on the data collection side, but also the evidence and results side. And so I would just say on the data side we have invested and continue to invest in many of the data initiatives at the World Bank. I was noticing in the report this year the 50 by 2030 Initiative on Agricultural Data is highlighted. We see again, the Bank Group has unparalleled ability to reach out to partner governments in order to pull together that data. But we also very much appreciate the bank's focus on evidence and figuring out what works. And so, for instance, the foundation for a very long time has invested in the gender innovation labs, for instance, and looking at impact evaluations about what types of interventions might be most impactful in terms of improving, for instance, women's economic empowerments in low and lower middle income countries. So those are the three top level reasons that we really value this partnership. And then in terms of your second question, Maitreyi, that said, when you think about the larger landscape of philanthropies and foundations, I know this is a common theme across many partners, how do we forget those better ties? I think it's helpful maybe to set the foundation off to the side because we are such a large partner by orders of magnitude than most foundations. And I think the Bank Group should think very carefully about what's on offer for a smaller foundation and partner, and also what the Bank Group is willing in terms of their own transaction cost for bringing in a smaller set of contributions. And so thinking about the vehicles that you're offering, how that aligns, and then the transaction costs that you also have to incur to bring those resources in. Thank you.

[Maitreyi Bordia Das]
Thank you very much for that advice. And now, Tim, there seems to be this running thread of water and sanitation. I don't know why, because Junaid is sitting here, because we've all worked with Junaid on water issues. But, Tim, the World Bank Group Trust Funds and financial intermediary funds have a very strong, maybe you may say not strong enough, but a strong focus on working with CSOs and non-government organizations. You, of course, Water Aid is of course, a huge international NGO and we've had a long-term association, particularly with GWSP, the Global Water and Security Partnership from when Junaid was there, when he set it up. And I've personally had the occasion of setting up the inclusion and water program with Water Aid and really benefited from that. Same question to you as I had for Tim, which is, what does a large NGO such as you get from this collaboration? But also what would be your advice to us in terms of reaching out to the smaller ones, and reaching out to organizations that are very on the ground? Because there's a lot of people talked about impact on the ground, and how do how do we get to that? So what would be your advice to us?

[Tim Wainwright]
Well, thank you very much indeed. And, yes, it's very nice to be surrounded by so many big figures from the water sector. And the World Bank's longstanding commitment to water is something that's very important, I think. So maybe I'll just make a few more general comments around why I think this funding modality is important. I don't know, in my belief, the biggest problems in the world are not going to be solved by single sectors. They are multi-sectoral; they need multi-sectoral approaches. And the biggest problems in the world will not be solved in terms of financing by public money alone. And I think water is one of a number of examples of this. Water is a really big problem in the world. I think it's getting worse, not better at the moment, billions, 2 billion without safe drinking water, similar numbers without safe sanitation. No SDG can be delivered without water. This is something, the Global Commission on the Economics of Water, which reported recently said. But I think we all know it, it's life, it's not possible without water. And funded by World Bank Trust Fund, the recent report highlighted, funding a Water Secure Future highlighted that there was $140 billion annual gap in funding only to hit SDG6. 1 and 6. 2. And that of the existing money going into that, which is obviously far too small, only 2% is from private sources. So there's an example of where a trust fund is helpful because it's scoped the problem, but it is a big problem. So let's turn to solutions. And I'm also simplifying a great deal, I should say, but some features of the solutions, and there are solutions, one reason to be optimistic about the water sector, especially if you're thinking about climate change, and obviously water is very central to how we adapt to and become more resilient to climate change, is that there are relatively few physical technological breakthroughs that are required, unlike in the mitigation side of climate change where there is more. The problem is more in the funding side, and that's where innovation is needed. So the solutions undoubtedly need some form of blended finance. And I think the earlier panel was very strong on this. You were describing precisely that problem, that organizations like the World Bank need to pivot away from, sole lender, low risk to leveraging much larger numbers of capital into the water sector and other sectors. That desperately need, not billions, but actually probably trillions if we really want to solve the problem. So public, private financing is needed. Water is heavy unlike energy, for instance. And therefore, for that and reasons, it needs to be managed locally. So the concept of local led adaptation is very important. And local needs to be whatever the water demands, so it may or may not be contained within the boundaries of one country. And finally, as I said earlier, the approach needs to be multi-stakeholder. And you need to start involving all the different people that use water, and the different sectors. So I'm going a bit here beyond drinking water here, but to acknowledge the fact that, for instance, the agriculture sector uses the vast amount of freshwater supplies in the world. Now, the World Bank has good track record in national partnerships, in stimulating partnerships. Again, with the use of trust funds, you were instrumental in setting up the approach to energy, the Just Energy Partnerships. And I mentioned earlier, the Global Commission on the Economics of Water is proposing that a similar, or building on that and learning from their experiences, look at the issue, look at setting up just water partnerships. And we, at Water Aid, believe this idea has merit, we want to take this further. So this thing could be another example of a very good way of using trust funds and where trust funds add value. So in summary, I like your three words, innovate, coordinate, catalyze. I think that summarizes it well. Trust funds are aware a lot of the intellectual thinking that the World Bank does in collaboration with many others, including ourselves. And it can also be used for that bringing together and stimulating, coordinate, collaborate catalyze action across sector in the country. And I think I would say to your second question about, how do you interest smaller organizations to get involved? I think you would in the ways that I've just described. If you're working at national level or wherever the water is, and you are working, multi-sectoral, that will naturally attract other organizations to engage. Thank you.

[Maitreyi Bordia Das]
Fantastic. Thank you so much. Each of these things need us to really have a team retreat and think about everything that was said here. But for now, what I'd like to do is to open it up. We have a few minutes, and I'd really like to hear from the audience, an audience, not just in terms of the questions or whatever you've heard. So please just raise your name tent and let us know who would like to come in

[Tim Wainwright]
You have a shy audience.

[laughing]

[Maitreyi Bordia Das]
Well, I don't have, I think they have a sleepy audience, maybe, maybe not. We also have a hundred and something people online, but they're unfortunately not able to ask the questions. Kristina.

[Kristina]
Maybe not a question, but a comment. Thank you so much for a very interesting discussion. And as coming from Sweden being one of these bilateral donors that had been part of contributing for a very long time, we really see it as positive a development that more other non-traditional donors are coming on board and contributing. Because we know that these quite few donors that have been on the top 10 for many years, this list need to expand. And with the different foundations and civil society organizations and so on, I think we are in a good path. But just to comment on that. Thank you.

[Maitreyi Bordia Das]
Thank you very much. And as I call upon people, since this is being streamed, if you could also just say your name before you speak. So Kuchi.

[Kuchi]
Yes. Thank you. Can I ask a question and comment for the previous panel discussion? Or only focus on this?

[Maitreyi Bordia Das]
Yeah, of course. The previous panelists- although Alfonso is not here, Akihiko and Junaid are here, so feel-

[Kuchi]
I have a comment and question for each of the panelists. For first, like Akihiko, it is great to know that trust funds supplement and, how to say, provide support to the area which IBRD and IDA cannot support. And one thing we really think important is the support to the countries or communities that is difficult for the World Bank Group to support their direct lending, such as Afghanistan or Myanmar. In that perspective the support will be through the UN organization or NGO. So we are interested and curious to know how the third party monitoring will act and ensure accountability for the donors. And next question is for the IFC, for Alfonso. But any IFC people can answer, but there is two means like blended finance, and also IFC advisory and upstream. And as we see in the report, there are more share for the blended finance in recent years. I'm wondering what are the advantages for each blended finance and IFC advisory upstream, how we can allocate funding, because our country, we only support the current advisory upstream, I'm wondering how the bank finance could be utilized and they have advantages. And lastly, for MIGA, for the Junaid, thanks for the great explanation about the merits of the guarantee, because it's sometimes very difficult for us to explain the merits to the policy makers who are not about to the financial products that MIGA provide. But surely the 1MIGA's guarantee to Ukraine and also West Bank and Gaza are significant achievements and efforts that MIGAs are doing. And I'm wondering if you could share how we could better explain the advantages and outcomes of MIGA product to the people who are not adverse to the products. One thing I could hit upon is to think about the impact on job creation, or more the tangible indicators. Thank you. Over to you.

[Maitreyi Bordia Das]
Thank you very much, Kuchi. And after this, so I'm going to request the panel to answer this question. But after that, we will restrict the questions to the second panel, because Alfonso unfortunately had to leave. We have Megan McGrath here, Senior Manager from IFC, and I'm going to turn to her in a minute. But in the order in which the questions were asked, let me turn to you, Akihiko, first in terms responding to Kuchi's point.

[Akihiko Nishio]
Thank you Maitreyi and thank you Kuchi. So third party monitoring is definitely something that the bank has been doing a lot of and quite often in conflict-affected environments. Now, when you think about the use of third parties in general, actually third-party monitoring is not, how should I say? It's not as more drastic as taking third party implementation. And third-party implementation is actually done in a small number of countries where we cannot work with the governments. So both a third party implementation and third party monitoring are important, with the third-party monitoring being much more prevalent. But one point I'd like to make is, the case of Myanmar that you mentioned is actually a very good illustration of how trust funds and IDA can complement each other because under IDA20, Myanmar is a green light country, so they only get credits. Which means that you cannot do third party implementation because you need grants in order to do third party implementation, otherwise, the implementers will have to repay, or the government which is not willing to work with you has to repay, and neither makes sense. So in IDA20, we have had to rely on trust funds. And for Myanmar, it was not very much available, so we use small amounts of trust funds for Myanmar. Now, for IDA21, which is going to start in next July, we have come up with innovation that, for those countries like Myanmar where there is no implementation capacity on the government side, we are actually able to give grants directly, although the country on the basis of risk of debt distress is a green light country. So normally they'll be getting credits. But because of the low capacity of the government, we can provide grants through IDA, not through trust funds.

[Maitreyi Bordia Das]
Thank you. Megan, on the blended finance question.

[Megan McGrath]
So thank you very much for the question. I wanted to go to the flip side of what something that Akihiko had said earlier. And he had said that the trust funds allows the bank, IBRD and IDA to enter into engagements that they wouldn't otherwise be able to entertain, especially when the counterparts, for example, are not able to receive any funding from IBRD or IDA. I would say for IFC, it's almost the opposite, in that blended finance allows IFC to do more of what it's already doing, more projects get financed, more innovative projects get financed, more projects are originated because we've given the right incentives to our operations team to look for those projects that might not make it through a traditional commercial credit review. But knowing that alongside the IFC co-investment, the commercial tranche, there's this other piece of concessional financing, which will allow the returns to IFC and others to clear the hurdle, to make it a more bankable and financeable project. That little bit of concessional financing has a disproportionately positive effect. Let me stop there.

[Maitreyi Bordia Das]
Thank you very much. And, Junaid.

[Junaid Kamal Ahmad]
So first, all of MIGA's programs are judged by their development impact, environment, social, impact on gender, impact on development, impact on growth. So every single measure that the World Bank Group uses, MIGA uses also. But the difference is, in order to have that impact, MIGA leverages capital market's money to do that using a small amount of public finance. So MIGA's model is really additionality and scale of finance in order to achieve the development impact. And here, it's taken me a little while to understand this, 30 years being in the world of lending and two years being in the world of leveraging, lending is about helping build state capability. It enables us to build systems. Leveraging enables us to bring money at scale to have impact at scale on those systems. So there are two very different mechanisms to have development impact. And if you can bring lending and leveraging together, you get the scale effect of systems at work. And this is the big change that is happening in the World Bank Group, that the shift we're making from being a dominantly lending entity to becoming a leveraging entity, is a massive shift. Today we are trying not to worry about projects one at a time, we're trying to look at portfolio and programmatic finance. That's a very different approach.

[Maitreyi Bordia Das]
Thank you very much. We have time for a couple of other questions. Two more maybe. Questions, thoughts, comments? Please go ahead.

[Male 1]
Actually, it's a comment on the on the report itself. And I wanted first of all to highlight that the new format, the online, is very welcome. Actually, I saw also in the contributions that there are more contributions to FIFs, that adjustments, which actually confirms the choice given to the forum to focus a little bit more on the FIFs this time. And it will be very welcome if we could have related data because the numbers that correspond to FIFS and the trust funds are presented in this format for the first time, it would be very welcoming if we could have the related figures also for previous years. That would be very nice. Thank you very much.

[Maitreyi Bordia Das]
Sorry, could you repeat that? If we could-

[Male 1]
Sorry. I was talking far from microphone. If we could have the related figures also for previous years in order to compare a little bit the contributions and how they evolved. I know we have numbers from DPC, but the way they're presented now, it's much more handy and I think it will help us a lot. Thank you.

[Maitreyi Bordia Das]
So what you're saying is a bit more of the historical data to be able to have sense of the trend.

[Male 1]
Exactly. Thank you.

[Maitreyi Bordia Das]
Thank you very much for that. Please, Junaid.

[Junaid Jamal Ahmad]
There's a point about fragility that I wanted to make. What we're discovering is our definition of fragility is being tested. There're countries that we say are not fragile, are really just above the bar of fragility, and they slip back again. So what we are trying to do in MIGA is to seek a trust fund relationship where fragilities define more flexibly so that we're able to support countries as they begin to hit fragility and then come out of fragility. And I think there's a debate, what are those criteria? So my own country, Bangladesh, seemed to have been moving along in a very positive direction, and suddenly hits by political fragility which is now lifting the number of poor in the country in a dramatic way. Do you still look at it as a low middle income country, or do you look at it as a fragile country? I think this is a very important question. The other is on the trust funds used by a lending part of the World Bank are used to pay for technical assistance, consultancy, and also used for administrative costs. In the MIGA, leveraging, we use it for first loss and reinsurance, we do not use it for administrative costs. And the money is there until called for. So you can look at it and say, wait a second, we gave this money five years ago, it's still there. It's there because it's protecting a first loss storyline. So it's a very different use of a trust fund in a leveraging entity than in a lending entity.

[Maitreyi Bordia Das]
Thank you very much, Junaid. Then this is always the point in a session where you thought the session was going to come to a close, but then there are several people who would like to have some comments, and it is really our panelists who would like to have comments. So, Tim, over to you, and then followed by Dan.

[Tim Wainwright]
Thank you. I had two things actually just to say on that thing. The first one was just to pick up on that final point. And I'm very pleased to hear you say that, Junaid. Because I think the world we are living in is shifting a lot faster, and things are actually getting worse in some places, and better in others, but worse in some places or changing in other places. So if you look at what's happened in West Africa, for instance, if you look at the fact that how rapidly a climate change impacts are starting to occur in a number of different countries around the world, there's nowhere we work where we're not seeing something, and some of them are very serious. So I think being a bit flexible, because the development finance area has been very rules based about these definitions, and countries moving- I was just recently in Nepal, and they're about to graduate, and it's like quite a few people saying, really? So I think I really like the point about flexibility of definition. The second point I wanted to make, which just hasn't yet really come up, is the issue of how much this flexible funding is helpful in addressing Leave No One Behind. And I give one very quick example, was that we worked in partnership with the bank in Tanzania to look at how to make the World Bank's Water and Sanitation Programs accessible to persons with disabilities. So I think that's another illustration of why this type of funding is helpful. Thank you.

[Maitreyi Bordia Das]
Thank you. Dan, and then Hana.

[Dan Peters]
Thanks Maitreyi. We're focused a lot today and appropriately on the financing that flows through trust funds. And Annalisa already noted the progress that has been made in the last five years, for instance, in terms of aligning trust fund flows with country led bank processes in terms of consolidating the portfolio. So there's been a lot of progress on that side. I guess a challenge that I would like to put out to the team in DFI and the bank to think about is how you also start to incorporate knowledge from external partners into trust fund programs. Tim was already noting how quickly the world is changing right now. There are always new innovations, new things that we're trying to deal with. We've talked a little bit about AI today, and I think that the bank could look a little bit more externally in some of these places. And I do see, and I think that would be in line with the bank's own knowledge compact that was announced in April, and to give the bank credit, I think I see places where that knowledge is being brought in. For instance, in Africa, the accelerating impacts of CGIR Climate Research for Africa Project really was taking research done in the CGIR network and putting that into bank projects in a number of African countries. I think another one that we have followed closely, obviously is the ID4D initiative, the bank's digital ID initiative, which really helped to scale up digital IDs and payments during the COVID-19 crisis. So I see some of those green shoots, but I see other opportunities where external partners are doing research and that could really be brought into the bank's DNA and into the programs that it finances, including through trust funds. Thanks.

[Maitreyi Bordia Das]
Fantastic. Thank you very much. And Hana.

[Hana AlHashimi]
Thank you Maitreyi, and not to get between everyone and the next coffee or dinner as it were, of course it's always a threat. But just really to align with a lot of what's been said here, but also to bring back, we were talking about AAA ratings in the last session. I think that's probably a good way to wrap up what we're talking about. We want to keep, of course, the AAA side, but definitely keep in mind the overall objective, going to what Annalisa flagged about beneficiaries, so ensuring that the beneficiaries we're not forgetting the reason that we've created a lot of these trust funds and FIFs. One is the strong call for more agility and for addressing what we call the AAA rating of ensuring accessibility, affordability and availability of finance at scale. But we're looking at how it is that we can respond to real needs and to ensuring that people's lives and livelihoods are secured and that we're delivering for them. And so in that, I did want to, in these examples, bring back that idea of needing to ensure that we are looking at continually evolving, continually learning from the lessons that that we've learned here, and continually allowing the space for innovation, but also lessons that the broader World Bank Group can take, and from trust funds and FIFs in multiple calls for evolution, for reform, et cetera, and ensure that we are actually able to deliver for lives and livelihoods in the developing world. Thank you.

[Maitreyi Bordia Das]
Thanks very much. Annalisa, any last word?

[Annalisa Prizzon]
I'm really between your coffee break and dinner, but I would love really to reiterate the strap line of this session is partnerships in action. So trust funds, FIFs can really help unlock finance. That's where we- Junaid talk about leverage a lot. I think these are key instruments working with other partners and be very clear around the access for other MDBs, other implementers at the country level. So I really commend the work on the annual report, and we look forward to the next edition. Thank you Maitreyi and the team.

[Maitreyi Bordia Das]
Akihiko, did you want to say something? Should I just wrap?

[Akihiko Nishio]
Let me- just to thank everybody for a wonderful conversation. And I understand that the retention rate from the online viewers has been extremely high which shows that the conversation has been very interesting for the those participating online. So it's really a tribute to everyone for having provided a very interesting, insightful input. So thank you very much.

[Maitreyi Bordia Das]
So apparently I was wrong, it wasn't a hundred plus, it was 300 plus people online, because there are different platforms that are streaming, and so in the different platforms, there's over 300 people. That is actually quite sobering to us in our team, which just says that the hunger for information on trust funds and FIFs and what they do in terms of their development impact or their potential development impact, and what they do in terms of concessional financing or potential is very high. And we really take that as a signal to us to do more of this, which we will. But I'm not going to attempt to sum up this session. This was far too rich, and it was both very high level and strategic as well as very specific. Just a couple of my takeaways, and this is exhortations that came from our panelists, number one, to think about partnerships in a broader way and to do more with those partnerships, so that was one. And the second thing is the leave no one behind agenda. We are at 2025, we are five more years, and the rallying cry of the SDGs is to leave no one behind. So how can trust funds and FIFs be more foot forward in terms of that agenda, which is also in keeping with the World Bank's agenda of ending extreme poverty, boosting shared prosperity on a livable planet. So we do take that. I really won't offer to dissect any more of this session. It was far too rich. I think it has given us a lot of homework. I hope that it has also been very useful to our donor partners because I think that much of the advice that we got is shared advice for us both. And I think that we would very much internally, certainly, circle back and think a lot about how we can do things differently. So thanks everyone very much. I am going to turn to our intrepid MC, Sri. Please, over to you, Sri, take it away.

[Srimathi Srihar]
Thank you so much, Maitreyi. And I promise not to keep anyone any longer. Just to say thank you to Maitreyi for your inspiring closing remarks, which brings us to the end of our 90-minutes session here today. And a huge thanks as well to our two fantastic panels and speakers, Akihiko, Alfonso, Junaid, Annalisa, Dan, Hana, Tim. Thank you all so much for being here and for, I think, what was a really thought provoking and inspiring conversation around the role and impact of trust funds and FIFs. So I also want to, of course, thank everyone that tuned in online. As Akihiko and Maitreyi mentioned earlier, we really had great engagement with our online audience today, so it's great to see that. And wonderful to see all of you. And thank you for joining. Have a great rest of your day.

[audience clapping]