The bank’s executive directors endorsed Nov. 2 a document that consolidates policies and procedures related to investment lending, the World Bank’s oldest and most-used financing vehicle. The new consolidated policy, which takes effect in 2013, introduces changes such as the use in small states and fragile countries of the bank’s rapid response option for natural disasters.
The new policy also drops the three-year limit for additional financing, increases the funding limit for project preparation advances and introduces more flexibility in the timing of annual audits. Further, it revises and updates policy statements on economic analysis of investment lending activities and approval procedures of multiannual and multiphase investment lending projects.
Aside from these changes, the document consolidates 35 existing policies that apply to investment lending. It retains much of the content of the existing polices and procedure statements, but simplifies language and presentation to address gaps, overlaps and inconsistencies.
The new policy does not cover procurement and environmental safeguard policies related to investment lending. Those policies are being reviewed separately.
The introduction of the consolidated policy is part of the bank’s broader effort to reform and update all its policies and procedures.
“Consolidating our Investment Lending Policy is an important step to make this instrument more effective for the Bank’s range of clients,” said Joachim von Amsberg, World Bank vice president for operational policy and country services. “This effort will help our clients and staff focus more on problem solving, implementation, and delivering results – and less on bureaucracy.”
As part of the World Bank management’s next step following approval of the new policy, it will begin updating the bank’s operational manual and conduct staff training sessions. It is also set to ensure alignment of the new policy with new accountability and decision-making frameworks and launch a communication and outreach campaign to inform countries and clients about the new policy. The campaign will be led by World Bank country directors.
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