International financial institutions

UNDP and the World Bank

The World Bank, through both the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), provides low-interest loans, interest-free credit, and grants to developing countries. In 2004 the World Bank provided $20.1 billion for developing countries worldwide, with $9 billion going to low-income countries. The World Bank operates in 100 countries and focuses its work primarily on poverty reduction, achievement of MDGs. The World Bank is currently the most important source of funds for HIV/AIDS, with commitments amounting more than $1.3 billion, with half of that for sub-Saharan Africa. While a lending institution, the World Bank also provides grants. The World Bank has 109 country offices.

The partnership

UNDP and the World Bank have a very strong partnership, working together in critical areas such as Poverty Reduction Strategy Papers and the Millennium Development Goals: thus, in May 2005, the UNDP Administrator as Chair of the UNDG and the Executive Director of the World Bank issued a joint note clarifying the links between the PRSP and the MDGs.

A Memorandum of Understanding on Financial Management regarding Grant Agreements, signed in 2004, covers mainly World Bank financial management, reporting and auditing requirements. This MOU is intended to facilitate the implementation of activities in countries with low capacity, where the World Bank provides grants to UNDP.

Also important as a source of funding is the Loan Implementation mechanism, through which resources allocated to programme countries as loans are channeled to UNDP as programme country cost-sharing.