Today I have laid a departmental minute relating to the intention by the Department for International Development (DFID) to create an additional contingent liability of $1,912,245,702.50 with respect to the World Bank’s International Bank for Reconstruction and Development (IBRD). This contingent liability would be in the form of “callable” capital, which is a commitment to make a capital contribution to IBRD in the very unlikely event that the IBRD is unable to meet its financial obligations.
The additional callable capital would permit the United Kingdom to subscribe to the additional shares allocated to it in the 2018 IBRD general and selective capital increases. This would support the United Kingdom’s global influence by allowing it to retain its single seat on the World Bank Board and help enable a modest increase in IBRD support to its clients consistent with our development, prosperity and security priorities.
A call from IBRD from shareholders for this capital is considered very unlikely. IBRD has a triple A credit rating, with a very diversified portfolio of investments across a large number of countries. As of 30 June 2018, it held $43.5 billion in equity and a general reserve of $28.6 billion 1. If the liability were to be called, provision for any payment will be sought through the normal Supply procedure.
1 International Bank for Reconstruction and Development (IBRD) management’s discussion and analysis and financial statements, June 30 2018