Trust Funds – The Basics

In 2013 The World Bank Group (WBG) disbursed about $52 billion dollars to finance projects, mainly through IBRD, IDA and the IFC. These disbursements are the ‘regular’ projects financed by the WBG. However, the WBG also has many Trust Funds (TFs), which complement regular project financing. The TFs are often established to adequately respond to economic and/or social developments. In 2013, the WBG held about $29 billion in trust funds. The activities financed by TFs can differ from basic and small consultancy projects to very large multimillion dollar construction projects.

The largest share of TF - overview World Bank Group Trust Fund resources are allocated to so-called FIFs, financial intermediary funds. This type of Trust Fund is set up by multiple organizations, both private and public, to provide a direct and coordinated response to a global priority, such as HIV/Aids. When it comes to FIFs, the World Bank takes up the role of the trustee, the administrator of the fund. It often is a donor as well. As the Trustee, the World Bank supports projects and transfers money to the implementing agencies. Large and prominent FIFs are the Global Environment Facility (GEF) and the Global Agriculture and Food Security Program (GAFSP).TF - GAFSPIn addition to the FIFs, for which the WBG acts as the TF - GEFprivate banker (receiving, holding and investing the funds), the WBG also has IBRD/IDA and IFC Trust Funds. With these TFs, the WBG plays a much more active role and has a say, either direct or indirect, in the activities the funds are used for. Trust Funds can either be Bank-Executed Trust Funds (BETFs) or Recipient-Executed Trust Funds (RETFs). These Trust Funds are often more focused towards one country or region, or to a specific (sub)sector to complement regular project financing. An example would be the Afghanistan Reconstruction Trust Fund (ARTF).

Trust Funds can be either single donor or multi donor. It is important to know that providing funds to a Trust Fund does not mean those funds can only be allocated to organizations from the donor country.

The Netherlands is donor to over a hundred different Trust Funds, varying in regional and thematic focus. More information about Trust Funds can be found here, while the 2013 Annual Report on Trust Funds is available here.