World Bank Iraq Trust Fund Update on Progress IRFFI Donor Committee Meeting Baghdad, July 7, 2008

The World Bank in Iraq How does the Bank operate in Iraq? - An Emphasis on Government Leadership The Banks main objective is to help Iraq build efficient and accountable institutions The Banks main objective is to help Iraq build efficient and accountable institutions Strengthen institutionsStrengthen institutions Improve delivery of basic servicesImprove delivery of basic services Lay groundwork for medium-term economic developmentLay groundwork for medium-term economic development Help Iraq develop sustainable systems to better utilize its substantial financial resources Help Iraq develop sustainable systems to better utilize its substantial financial resources

The World Bank in Iraq How does the Bank operate in Iraq? - An Emphasis on Government Leadership Identification & Preparation Iraq designs projects, with Bank assistance Iraqi Strategic Review Board reviews projects to ensure consistency with Iraqs development priorities Bank appraises project Bank and Iraq jointly negotiate legal agreementsImplementation Iraq implements projects Iraq contracts private companies to carry out the work, using World Bank competitive procurement procedures and financial management policies Bank supervises the implementation of projects 3-4 times per year Fiduciary monitoring agent helps Bank monitor physical progress and compliance with policies

Sources and Uses of Funds Since the Bari Donor Committee Meeting, the EC has committed an additional EUR20 million, bringing total donor commitments to US$496.9 Donors have deposited US$494.4 million Investment income totals US$62.3 million Total value of ITF exceeds US$556.6 million The World Bank in Iraq

Sectoral Distribution ITF finances 16 grants valued at US$465.2 million, obligating 94% of donor deposits

Snapshot of Current ITF Portfolio The World Bank in Iraq

Portfolio Progress

Disbursement Status Total disbursements stand at US$173.8 million. Project expenditures total US$157.4 million (34% of the value of projects) Expenditures to cover costs to project appraisal and supervision total US$13.6 million Expenditures for trust fund management and administrative fees total about US$2.7 million The World Bank in Iraq

Resource Availability The World Bank in Iraq

GoI appointed a senior MoF staff as focal point GoI appointed a senior MoF staff as focal point The Bank is working with implementing partners to restructure two projects: The Bank is working with implementing partners to restructure two projects: Disabilities ProjectDisabilities Project Baghdad Water ProjectBaghdad Water Project Designated Accounts piloted in two projects: Designated Accounts piloted in two projects: Household SurveyHousehold Survey School ReconstructionSchool Reconstruction Other Disbursement Mechanisms are being explored Other Disbursement Mechanisms are being explored Additional Financing for three projects: Additional Financing for three projects: Household SurveyHousehold Survey Community InfrastructureCommunity Infrastructure Private Sector DevelopmentPrivate Sector Development The World Bank in Iraq Improving Portfolio Performance

Regional Health Emergency Response Regional Health Emergency Response US$8.7 m. US$8.7 m. Education Strategy Education Strategy US$3 m. US$3 m. Public Financial Management Reform Public Financial Management Reform US$18 m. US$18 m. Bank Restructuring Bank Restructuring US$10 m. US$10 m. The World Bank in Iraq New Projects Under Preparation

Iraqs US$500 million IDA allocation has now been fully committed to 5 projects under implementation: Iraqs US$500 million IDA allocation has now been fully committed to 5 projects under implementation: Third Education ProjectThird Education Project Road Rehabilitation ProjectRoad Rehabilitation Project Dokan and Derbandikhan Hydropower ProjectDokan and Derbandikhan Hydropower Project Electricity Reconstruction Project (with ITF co-financing)Electricity Reconstruction Project (with ITF co-financing) Water Supply ProjectWater Supply Project The Bank finances a broad portfolio of sectoral Analytical and Advisory Activities The Bank finances a broad portfolio of sectoral Analytical and Advisory Activities The Bank is currently preparing its Third Interim Strategy Note for Iraq, which will define its framework for engagement The Bank is currently preparing its Third Interim Strategy Note for Iraq, which will define its framework for engagement The World Bank in Iraq Other Bank Work