IFI WG Hill Handout - FY24 Appropriations

President’s Budget Request for Fiscal Year 2024 - Funding for International Financial Institutions (IFIs) 

Summary of FY24 President’s Budget Request (PBR) International Financial Institutions (IFI) and Related Programs 

Treasury’s request for the Multilateral Development Banks for FY24 is an overall 20% increase above FY23 requested level. This budget request is a reflection of Treasury’s view of the level of need and depth of the crises the country and the world are facing. 

Multilateral Development Banks (MDBs)

The MDBs play key roles in the effort to reduce poverty, increase economic growth, foster economic and social inclusion, and fight climate change, which advances U.S. foreign policy objectives of sustaining peace and stability, promoting security, and protecting the global environment. The MDBs have also played a leading role in the global response to the COVID-19 pandemic and to Russia’s invasion of Ukraine. The FY24 budget requests $2.293 billion for the MDBs, $1.479 billion of this is for IDA as part of the US’s pledge of $3.5 billion (July 1, 2022 - June 30, 2025). 

Treasury’s requests for the MDBs:

  • International Bank for Reconstruction and Development (IBRD) - $233.3 million
  • International Development Association (IDA): $1.479 billion, of which $49 million is for arrears
  • African Development Bank (AfDB): $54.6 million. 
  • African Development Fund (AfDF): $224 million, of which $27 million is for arrears.
  • Asian Development Fund (AsDF): $119.4 million of which $84 million is for the subsidy cost of $1 billion of loan guarantees to support the Innovative Finance Facility for Climate in Asia and the Pacific, and of which $35 million is for the Energy Transition Mechanism Partnership Fund. 
  • International Fund for Agricultural Development (IFAD): $81.8 million of which $35 million is for the Enhanced Adaptation for Smallholder Agriculture Programme (ASAP+) and $3.833 million is to eliminate arrears.

PBR - Other SFOPs Bill Highlights

  • Arrears: Arrears are unmet commitments to MDBs providing concessional loans and grants that are past due. Outstanding arrears jeopardize U.S. influence at the MDBs and these institutions’ effectiveness. Until recently, there was little political will to pay down arrears. The COVID-19 crisis renewed U.S. interest in paying down arrears, both as a way to signal its commitment to multilateralism and as a way of providing MDBs with additional liquidity to address the pandemic. Through FY20, U.S. arrears to the MDBs amounted to just under $2.5 billion, with the largest amounts owed to IDA, the AfDF, the AsDF, and the GEF. The FY24 budget request includes funds to pay down arrears at IDA, AfDF, AsDF, IFAD, and the GEF, but this amount would not clear U.S. arrears owed to all these institutions. 
  • Treasury’s Exchange Stabilization Fund (TESF): The Budget request seeks to authorize the Treasury to lend up to $21 billion from the TESF split between the Resilience and Sustainability Trust (RST) and the Poverty Reduction and Growth Trust (PRGT) at the International Monetary Fund.
  • IDA Replenishment: The PBR includes meeting full funding levels for IDA to meet its commitments to IDA20. Like arrears, underfunding IDA compared to the U.S.’s commitment would jeopardize the U.S.’s influence at the MDBs and across the international landscape by damaging the U.S.’s negotiating power and reducing the international finance institution's effectiveness at delivering on its goals.   
  • Debt relief: The G20 Debt Service Suspension Initiative (DSSI) is an agreement among bilateral official creditors to suspend debt service payments from the world’s 73 poorest countries during the COVID-19 pandemic. It is a way to temporarily ease the financing constraints for those countries and free up scarce money that they can use to mitigate the human and economic impact of the COVID-19 crisis. The G20 Common Framework for Debt Treatments Beyond the DSSI aims to address sovereign debt challenges and ensure broad participation of creditors with fair burden sharing and importantly brings in official creditors that were not part of the Paris Club process. The FY24 budget requests $52 million for funds to support the G20 DSSI and the Common Framework.
  • Climate: The significant increase in Treasury’s FY24 budget on climate requests reflects the U.S.’s commitment to climate action.

  • Food Security: The PBR includes a $40 million request for the Global Agriculture and Food Security Program (GAFSP). GAFSP is a multilateral financing platform that provides financial assistance to governments, farmer and producer organizations, and the private sector in the form of grants, concessional loans, and blended finance. It also provides technical assistance and advisory services, supporting more than 16 million rural people including nearly 7 million women since 2010.