International Financial Institutions: FY2024 Budget Request

International Financial Institutions: FY2024 Budget Request

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Updated September 19, 2023
International Financial Institutions: FY2024 Budget Request
For FY2024, the Biden Administration is requesting $4.04
non-concessional financing, which provides market-based
billion for the international financial institutions (IFIs).
loans to middle-income and some low-income countries.
These include the International Monetary Fund (IMF), the
Nearly 80% of the budget request for the MDBs is for the
multilateral development banks (MDBs), and associated
concessional lending facilities. The FY2024 request
multilateral trust funds focused on climate change and food
includes annual installments towards multi-year pledges,
security. The FY2024 request for the IFIs is 70% more than
including: $1.48 billion to the International Development
the amount in FY2023 ($2.36 billion, Figure 1), and
Association (IDA), the World Bank’s concessional lending
accounts for about 6% of the total FY2024 Department of
facility; $224 million for the African Development Fund,
State, Foreign Operations, and Related Programs (SFOPS)
the concessional lending facility of the African
budget request.
Development Bank; and $107.2 million for the Asian
Development Fund, the concessional lending arm of the
U.S. funding for the IFIs is administered by the Treasury
Asian Development Bank.
Department, which is responsible for managing U.S.
participation in these institutions. Congress authorizes and
The request also includes annual installments towards
appropriates U.S. contributions to the IFIs. The Senate
previously negotiated, multi-year capital increases of two
Committee on Foreign Relations and the House Committee
MDB non-concessional lending facilities. Specifically, the
on Financial Services are responsible for managing MDB
Administration is requesting $233.3 million for
authorization legislation. The SFOPS Subcommittees of the
the International Bank for Reconstruction and
House and Senate Committees on Appropriations manage
Development (IBRD), the World Bank’s non-concessional
the relevant appropriations legislation. Over the past several
lending facility, and $54.6 million for non-concessional
decades, authorizations and appropriations for U.S.
lending by the African Development Bank. U.S.
contributions to the IFIs have been included in annual
contributions to capital increases protect U.S. voting shares
SFOPS appropriations or larger omnibus appropriations
at these institutions.
acts.
Additionally, the budget request includes two new MDB
Figure 1. Treasury’s International Programs Budget
funding initiatives. The first is $75 million for a new capital
Request
increase at the Inter-American Investment Corporation
(ICC, also called IDB Invest). The ICC is part of the Inter-
American Development Bank (IADB), which focuses on
private sector development. The second is $119.3 million
for two new programs at the Asian Development Bank:
(1) the Innovative Finance Facility for Climate in Asia and
the Pacific and (2) the Energy Transition Mechanism
Partnership Trust Fund.
Energy and Environmental Trust Funds
U.S. funding for multilateral climate change and
environmental initiatives has varied over time, and the

Administration is requesting $1.42 billion for FY2024, up
Source: U.S. Treasury Department, International Programs
from $275 million enacted in FY2023. Specifically, the
Congressional Justification for Appropriations, FY2024.
Administration is requesting
Overview of the FY2024 Request
• $800 million for the Green Climate Fund (GCF),
More than half of the Treasury international programs
which is established within the framework of the United
request—$2.29 billion—is U.S. funding to the MDBs,
Nations Framework Convention on Climate Change
which finance development projects in low- and middle-
(UNFCCC) to assist developing countries in adaptation
income countries. The second largest portion of the request
and mitigation practices to counter climate change (the
is $1.42 billion for multilateral energy and environmental
trust funds, more than five times the amount enacted in
State Department budget request includes an additional
FY2023 ($275.2 million). Together, the MDBs and the trust
$800 million for the GCF);
funds focused on energy and the environment account for
• $425 million for the Clean Technology Fund (CTF),
about 90% of the FY2024 request.
which provides concessional resources to be combined
with MDB resources to support clean energy, climate
Multilateral Development Banks
adaptation, and sustainable land use;
Most of the MDBs provide two types of financial
•
assistance: concessional financing, which provides grants
$168.2 million for the Global Environment Facility,
and low-cost loans to the world’s poorest countries, and
which provides mostly grants to developing countries to
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International Financial Institutions: FY2024 Budget Request
address biodiversity, land degradation, chemical waste,
• Extension of U.S. participation in IMF supplemental
and other environmental issues; and
fund: The Administration is requesting a five year-extension
• $27 million for Resilient Development Trust Funds,
of U.S. participation in the New Arrangements to Borrow
MDB-managed trust funds focused on building
(NAB). The $480 bil ion NAB is a borrowing arrangement
resilience to natural disasters and extreme weather.
between 38 IMF members, including the United States. The
NAB supplements core IMF resources. The NAB is
Other Funding Requests
currently authorized through 2025.
In addition to the MDBs, energy, and the environment, the
The Administration is also seeking authorization to exempt
FY2024 budget request includes funding for a variety of
bonds issued by IDA from regulations by the Securities and
international economic programs. Specifically, the request
Exchange Commission (SEC), similar to the exemption that
includes
IBRD bonds are granted. The Administration requested this
authorization in its FY2022 and FY2023 budget proposals, and
• $122 million for multilateral food security programs,
legislation that would allow these exemptions was also
including the International Fund for Agricultural
introduced in February 2023 (H.R. 1161), as well as in the
Development (IFAD), a MDB focused on agricultural
117th Congress (H.R. 8484).
development, and the Global Agriculture and Food
Security Program (GAFSP), a multilateral financing
platform focused on food and nutrition security.
FY 2024 Supplemental Request
•
In August 2023, the Administration requested an additional
$52 million for U.S. participation in multilateral debt
$2.25 billion for the World Bank as part of a larger
initiatives, primarily through the Common Framework
supplemental budget request to Congress. The request
on Debt Treatments (Common Framework) and the Paris
includes $1.25 billion for the IBRD to leverage $25 billion
Club, a group of governments (excluding China) that
in lending at below non-concessional rates. The
negotiate debt relief for developing countri
Administration argues that this additional funding for the
• es.
IBRD would allow the World Bank to respond more
•
effectively to global challenges and provide a “credible
$50 million that the Treasury Department could use
alternative to PRC [People’s Republic of China] financing.”
flexibly to support initiatives at the IFIs and other
The remaining $1 billion would be for IDA to support low-
international organizations to meet “new and emergent
income countries facing a number of crises, including food
priority needs.”
insecurity and destabilizing fragility and conflict.
• $40 million for a first-time contribution by the United
States to the Global Infrastructure Facility (GIF), a
The FY2024 supplemental request also includes
global collaboration platform to address support
authorization language to allow the U.S. government to
infrastructure development projects. (The Obama
lend up to $21 billion to the PRGT and RST.
Administration requested funding for the GIF in FY2017
but no appropriations were made).
Potential Policy Questions for Congress
• $45 million for Treasury’s
•
Office of Technical
The FY2024 budget request for the IFIs is 70% higher
Assistance (OTA), a small office that provides technical
than the amount enacted in FY2023. Why is U.S.
assistance to developing countries in a variety of
support of the IFIs a good use of U.S. taxpayer funds?
economic and financial policy areas.
• How does the Administration evaluate the effectiveness
of multilateral environmental funds and determine the
Authorization Requests
appropriate level of U.S. commitments to these funds?
For FY2024, the Administration is not requesting any
• Both the World Bank and the IMF are trying to increase
appropriations for the International Monetary Fund (IMF), but
financing to combat climate change. How should these
is seeking two authorization requests.
organizations consider climate change in the context of
• Authorization to use previously appropriated funds: The
economic development and macroeconomic stability?
Biden Administration is requesting authorization to use
•
FY2023 appropriations of $20 mil ion to extend loans from
Why does the Treasury Department require a new fund
Treasury’s Exchange Stabilization Fund (ESF) to IMF funds
to meet “new and emergent” needs at the IFIs?
focused on developing countries. The specific IMF funds

include the IMF’s Poverty and Growth Trust Fund (PRGT),

which provides concessional lending to low-income
countries, and the IMF's Resilience and Sustainability Trust
Rebecca M. Nelson, Specialist in International Trade and
(RST), which provides long-term financing to low- and
Finance
middle-income countries to address long-term challenges
Martin A. Weiss, Specialist in International Trade and
(such as climate change and pandemic preparedness). This
Finance
authorization request was included in Treasury’s FY2023
budget request but was not included in the final
IF11902
appropriations legislation.

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International Financial Institutions: FY2024 Budget Request

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https://crsreports.congress.gov | IF11902 · VERSION 6 · UPDATED