The same World Bank departments and staff are responsible for both IDA and IBRD financial and risk management design, implementation and oversight. IDA’s funding program will benefit from the expertise developed over 70 years of executing the IBRD’s funding operations in the capital markets.
IDA’s triple-A rating is based on a solid financial structure, conservative financial policies, sustainable business model, as well as consistent, strong shareholder support.
Exceptionally Strong Capital Base
- Consistent equity increases since 1960.
- Largest equity base of any supranational issuer.
- IDA holds actual capital in excess of the minimum capital required to support the current portfolio plus a buffer.
- IDA is required to keep liquid assets to cover at least 24 months of projected net outflows.
- Portfolios conservatively managed against strict guidelines.
- Eligible investments are highly rated fixed income securities with conservative rating limits.
Quality Loan Portfolio
- Preferred creditor status: clients prioritize obligations to IDA.
- Policy of freezing lending and disbursements on all outstanding loans for late payments.
- Borrowing clients are IDA shareholders with incentive to repay.
- All projects undergo a strict due diligence process.
- Lending terms based on income levels and debt sustainability.
- Single country borrowing limit set at 25% of available capital.
- Global diversification.
Prudent Risk Management
- Governance structure for IDA risk management matches IBRD's.
- The same financial professionals manage IDA’s bond issuance, risk management, and asset-liability and liquidity management operations.
- Market risks are prudently managed and well capitalized to protect IDA’s triple-A rating.
- ALM policy matches the interest and currency sensitivity of assets and liabilities.