World Bank Iraq Trust Fund Update on Progress IRFFI Donor Committee Meeting Baghdad, July 7, 2008.

World Bank Iraq Trust Fund World Bank Iraq Trust Fund Update on ProgressUpdate on Progress

IRFFI Donor Committee IRFFI Donor Committee MeetingMeeting

Baghdad, July 7, 2008Baghdad, July 7, 2008

The World Bank in IraqThe World Bank in Iraq

How does the Bank operate in Iraq?How does the Bank operate in Iraq? - An Emphasis on Government Leadership - An Emphasis on Government Leadership

The Bank’s main objective is to help Iraq build The Bank’s main objective is to help Iraq build efficient and accountable institutionsefficient and accountable institutions

• Strengthen institutionsStrengthen institutions• Improve delivery of basic servicesImprove delivery of basic services• Lay groundwork for medium-term economic Lay groundwork for medium-term economic

developmentdevelopment

Help Iraq develop sustainable systems to better Help Iraq develop sustainable systems to better utilize its substantial financial resourcesutilize its substantial financial resources

The World Bank in IraqThe World Bank in Iraq

How does the Bank operate in Iraq?How does the Bank operate in Iraq? - An Emphasis on Government Leadership - An Emphasis on Government Leadership

Identification & PreparationIdentification & Preparation• Iraq designs projects, with

Bank assistance

• Iraqi Strategic Review Board reviews projects to ensure consistency with Iraq’s development priorities

• Bank appraises project

• Bank and Iraq jointly negotiate legal agreements

ImplementationImplementation• Iraq implements projects

• Iraq contracts private companies to carry out the work, using World Bank competitive procurement procedures and financial management policies

• Bank supervises the implementation of projects 3-4 times per year

• Fiduciary monitoring agent helps Bank monitor physical progress and compliance with policies

Sources and Uses of FundsSources and Uses of Funds

Since the Bari Donor Committee Meeting, the EC has committed an additional EUR20 million, bringing total donor commitments to US$496.9

Donors have deposited US$494.4 million

Investment income totals US$62.3 million

Total value of ITF exceeds US$556.6 million

The World Bank in IraqThe World Bank in Iraq

The World Bank in IraqThe World Bank in Iraq

Sectoral DistributionSectoral Distribution

Sectoral Distribution of Active Lending

Cap. Build. & Public Adm in.

1%

Electricity1%

Social Protection

2%

Rural Deve lopm ent

10%

RuralDeve lop.

2%

Health10%

Environm ent1%

Water Sanitation &

Urban37%

Private Sector12%

ITF finances 16 grants valued at US$465.2 million, obligating 94% of donor deposits

Snapshot of Current ITF PortfolioSnapshot of Current ITF PortfolioGrant

Amount(US $m)

Effective Date

OriginalClosing

Date

RevisedClosing

Date

Active Projects

Community Infrastructure 46.0 12/18/04 06/30/07 12/31/08

School Construction & Rehabilitation 60.0 10/14/04 06/30/07 06/30/09

School Construction - M arshlands Sup p lement 6.0 10/31/06 09/30/07 06/30/09

Private Sector Develop ment 55.0 12/06/04 06/30/07 06/30/09

Water Sup p ly , Sanitation & Urban Reconstruction 110.0 12/08/04 08/31/07 07/31/09

Baghdad Water Sup p ly 65.0 12/04/04 08/31/07 07/31/09

Second Cap acity Building Project 7.0 11/09/04 11/30/06 08/31/09

Disabilities 19.5 11/23/05 09/30/07 09/30/09

Household Survey & Policies for Poverty Reduction 5.5 07/24/06 09/30/07 09/30/09

Household Survey & Policies (Technical Assistance) 3.6 05/03/06 09/30/07 09/30/09

Health Rehabilitation 25.0 12/04/04 12/31/06 02/28/10

Social Protection 8.0 06/06/06 09/30/07 02/28/10

Environmental M anagement 5.0 11/06/06 09/30/07 08/31/10

Electricity Reconstruction 6.0 04/04/07 09/30/07 09/30/10

Closed Projects

Cap acity Building I 3.6 01/16/04 07/15/04 08/31/04

Textbook Provision 40.0 05/15/04 12/31/05 12/31/06

The World Bank in IraqThe World Bank in Iraq

The World Bank in IraqThe World Bank in Iraq

Portfolio ProgressPortfolio Progress

Status of Contracting and DisbursementIraqi -executed ITF projects only

0%

20%

40%

60%

80%

100%

Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 M ay-08

Disbursement StatusDisbursement Status

Total disbursements stand at US$173.8 million.

Project expenditures total US$157.4 million (34% of the value of projects)

Expenditures to cover costs to project appraisal and supervision total US$13.6 million

Expenditures for trust fund management and administrative fees total about US$2.7 million

The World Bank in IraqThe World Bank in Iraq

Resource AvailabilityResource Availability

The World Bank in IraqThe World Bank in Iraq

US $ mInflows

Donor Deposits 494.4Investment Income Earned 62.3

Total Inflows 556.7Outflows

Projects Under Imp lementation 465.2Exp enditures for Project Ap praisal and Supervision 13.6Exp enditures for Trust Fund M anagement, Administration, and Fees 2.7

Total Outflows 481.5Available Resources 75.2Resources Allocated

New Projects Currently Under Prep arationRegional Health (Awaiting Signature) 8.7Education Sector Strategy 3.0

Public Financial M anagement 18.0Bank Restructuring 10.0

Additional Financing Grants under p reparationPrivate Sector Development Project 10.0

Estimated Project Ap praisal and Supervision through June 2009 3.4FM A Contract through December 2010 6.9Estimated TF M anagement, Administration, and Fees through June 2009 1.0

Total Allocated Resources 61.0Resources Available for New Commitments 14.1

GoI appointed a senior MoF staff as GoI appointed a senior MoF staff as focal pointfocal point The Bank is working with implementing partners to The Bank is working with implementing partners to

restructure two projectsrestructure two projects::• Disabilities ProjectDisabilities Project• Baghdad Water ProjectBaghdad Water Project

Designated AccountsDesignated Accounts piloted in two projects: piloted in two projects:• Household SurveyHousehold Survey• School ReconstructionSchool Reconstruction

Other Disbursement MechanismsOther Disbursement Mechanisms are being explored are being explored Additional FinancingAdditional Financing for three projects: for three projects:

• Household SurveyHousehold Survey• Community InfrastructureCommunity Infrastructure• Private Sector DevelopmentPrivate Sector Development

The World Bank in IraqThe World Bank in Iraq

Improving Portfolio PerformanceImproving Portfolio Performance

Regional Health Emergency ResponseRegional Health Emergency Response US$8.7 m.US$8.7 m.

Education StrategyEducation Strategy US$3 m.US$3 m.

Public Financial Management ReformPublic Financial Management Reform US$18 m.US$18 m.

Bank RestructuringBank Restructuring US$10 m.US$10 m.

The World Bank in IraqThe World Bank in Iraq

New Projects Under PreparationNew Projects Under Preparation

Iraq’s US$500 million IDA allocation has now been Iraq’s US$500 million IDA allocation has now been fully committed to 5 projects under implementation:fully committed to 5 projects under implementation:• Third Education ProjectThird Education Project• Road Rehabilitation ProjectRoad Rehabilitation Project• Dokan and Derbandikhan Hydropower ProjectDokan and Derbandikhan Hydropower Project• Electricity Reconstruction Project (Electricity Reconstruction Project (with ITF co-financing)with ITF co-financing)• Water Supply ProjectWater Supply Project

The Bank finances a broad portfolio of sectoral The Bank finances a broad portfolio of sectoral Analytical and Advisory ActivitiesAnalytical and Advisory Activities

The Bank is currently preparing its Third Interim The Bank is currently preparing its Third Interim Strategy Note for Iraq, which will define its framework Strategy Note for Iraq, which will define its framework for engagementfor engagement

The World Bank in IraqThe World Bank in Iraq

Other Bank WorkOther Bank Work