Client Services

Commodity Price Risk Management Advisory

IBRD can provide assistance in building capacity and helping develop a customized strategy that meets the country’s specific risk management needs.

An important first step in the implementation of a commodity risk management strategy is a risk assessment process that can quantify the financial impact of commodity price volatility on the borrower’s finances.

Advisory engagements can cover the following services:

  • Risk assessment and design of a customized strategy
  • Analysis of existing institutional and legislative framework
  • Technical support to design a framework for selecting hedging strategies
  • Education for stakeholders and policy-makers
  • Technical support to building a robust infrastructure for hedging risk.

In case a client wants to execute a hedging transaction, IBRD can help in two formats: 

  • Hedging transaction embedded in the loan agreement
  • Stand-alone hedging transaction.

Why IBRD?

Advisory Services

  • IBRD has extensive experience in capacity building (i.e. Debt Management).
  • IBRD has already helped specific countries in commodity risk management issues, such as Uruguay, Morocco and the Dominican Republic.

Intermediation Services

  • IBRD doesn’t take any positions and supports structuring transactions as an honest broker.
  • IBRD has a deep knowledge of markets and established relationships with most dealers in the oil space.
  • IBRD provides competitive execution, as per its normal execution process.
  • IBRD is a AAA entity which helps mitigate the counterparty risk to clients.