For FY2024, the Biden Administration is requesting $4.04 billion for the international financial institutions (IFIs). These include the International Monetary Fund (IMF), the multilateral development banks (MDBs), and associated multilateral trust funds focused on climate change and food security. The FY2024 request for the IFIs is 70% more than the amount in FY2023 ($2.36 billion, Figure 1), and accounts for about 6% of the total FY2024 Department of State, Foreign Operations, and Related Programs (SFOPS) budget request.
U.S. funding for the IFIs is administered by the Treasury Department, which is responsible for managing U.S. participation in these institutions. Congress authorizes and appropriates U.S. contributions to the IFIs. The Senate Committee on Foreign Relations and the House Committee on Financial Services are responsible for managing MDB authorization legislation. The SFOPS Subcommittees of the House and Senate Committees on Appropriations manage the relevant appropriations legislation. Over the past several decades, authorizations and appropriations for U.S. contributions to the IFIs have been included in annual SFOPS appropriations or larger omnibus appropriations acts.
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Source: U.S. Treasury Department, International Programs Congressional Justification for Appropriations, FY2024. |
Overview of the FY2024 Request
More than half of the Treasury international programs request—$2.29 billion—is U.S. funding to the MDBs, which finance development projects in low- and middle-income countries. The second largest portion of the request is $1.42 billion for multilateral energy and environmental trust funds, more than five times the amount enacted in FY2023 ($275.2 million). Together, the MDBs and the trust funds focused on energy and the environment account for about 90% of the FY2024 request.
Multilateral Development Banks
Most of the MDBs provide two types of financial assistance: concessional financing, which provides grants and low-cost loans to the world's poorest countries, and non-concessional financing, which provides market-based loans to middle-income and some low-income countries. Nearly 80% of the budget request for the MDBs is for the concessional lending facilities. The FY2024 request includes annual installments towards multi-year pledges, including: $1.48 billion to the International Development Association (IDA), the World Bank's concessional lending facility; $224 million for the African Development Fund, the concessional lending facility of the African Development Bank; and $107.2 million for the Asian Development Fund, the concessional lending arm of the Asian Development Bank.
The request also includes annual installments towards previously negotiated, multi-year capital increases of two MDB non-concessional lending facilities. Specifically, the Administration is requesting $233.3 million for the International Bank for Reconstruction and Development (IBRD), the World Bank's non-concessional lending facility, and $54.6 million for non-concessional lending by the African Development Bank. U.S. contributions to capital increases protect U.S. voting shares at these institutions.
Additionally, the budget request includes two new MDB funding initiatives. The first is $75 million for a new capital 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 from $275 million enacted in FY2023. Specifically, the Administration is requesting
Other Funding Requests
In addition to the MDBs, energy, and the environment, the FY2024 budget request includes funding for a variety of international economic programs. Specifically, the request includes
Authorization Requests For FY2024, the Administration is not requesting any appropriations for the International Monetary Fund (IMF), but is seeking two authorization requests.
The Administration is also seeking authorization to exempt bonds issued by IDA from regulations by the Securities and Exchange Commission (SEC), similar to the exemption that IBRD bonds are granted. The Administration requested this authorization in its FY2022 and FY2023 budget proposals, and legislation that would allow these exemptions was also introduced in February 2023 (H.R. 1161), as well as in the 117th Congress (H.R. 8484). |
FY 2024 Supplemental Request
In August 2023, the Administration requested an additional $2.25 billion for the World Bank as part of a larger supplemental budget request to Congress. The request includes $1.25 billion for the IBRD to leverage $25 billion in lending at below non-concessional rates. The Administration argues that this additional funding for the IBRD would allow the World Bank to respond more effectively to global challenges and provide a "credible alternative to PRC [People's Republic of China] financing." The remaining $1 billion would be for IDA to support low-income countries facing a number of crises, including food insecurity and destabilizing fragility and conflict.
The FY2024 supplemental request also includes authorization language to allow the U.S. government to lend up to $21 billion to the PRGT and RST.
Potential Policy Questions for Congress