An Evaluation of the World Bank Group Strategy for Fragility, Conflict, and Violence, 2020–25
Chapter 3 | Financing for Fragile and Conflict-Affected Engagements
Highlights
The World Bank’s financing support to countries classified as fragile and conflicted-affected situations (FCS) has increased from 11 percent in FY 2015–19 to 22 percent in FY20–24—averaging commitments of $15.2 per year. However, this increase is driven by the new classification of large borrowers such as Ethiopia, Nigeria, and Ukraine as FCS since FY20, as well as in part by one-time commitments related to the COVID-19 pandemic response. After adjusting for these effects and inflation, commitments to traditional FCS countries increased by 3 percent annually in real terms. The International Development Association (IDA) Fragility, Conflict, and Violence (FCV) Envelope and trust funds have enabled this increase.
The International Finance Corporation and the Multilateral Investment Guarantee Agency increased their commitments in FCS, but like the World Bank, the increase was driven by new countries classified as FCS. The share of International Finance Corporation long-term finance committed in FCS countries reached 6.4 percent during FY20–24, up from 4.0 percent of volume in the preceding FY15–19 period. The Multilateral Investment Guarantee Agency issued guarantees in FCS equaling 9.2 percent of its total guarantee volume, compared with 6.9 percent in the five years prior. The Multilateral Investment Guarantee Agency met its target for an average of 30–33 percent of new guarantee volume in the 17th Replenishment of IDA and FCS from FY24. However, the International Finance Corporation faced challenges in scaling up its business to meet corporate commitments.
The IDA FCV Envelope, introduced in the 19th Replenishment of IDA, and its predecessor allocations enhanced financing for eligible IDA countries and enabled a more structured, milestone-based policy dialogue; however, portfolio recalibrations resulted primarily in scaling up existing programs rather than designing significantly different portfolios. Prevention support primarily involved countries that had already descended into conflict, with the intent of preventing further deterioration. Interviews with Country Management Units and other World Bank staff working on FCS highlight the transition challenges for countries that lose eligibility for FCV Envelope funds, with risks to program continuity and sustainability.
Growth in FCS financing has not been met with proportionate increases in administrative budgets, which have declined in real terms. Although Country Management Units ring-fenced supervision budgets, preparation budgets and advisory services and analytics budgets decreased, which could risk the quality of pipeline projects.
This chapter presents findings related to (i) trends and patterns in the World Bank’s support to FCS, (ii) enhanced financing tools in FCS through the IDA FCV Envelope, and (iii) adjusted administrative budget allocations in FCS countries.
The World Bank Group’s Support to FCS: Trends and Patterns
The World Bank’s financing to FCS has increased to more than one-fifth of total World Bank financing (figure 3.1). The share of projects and financing commitments in FCS has steadily increased, reaching 26 percent of projects and 22 percent of financing volume in FY20–24, up from 22 percent and 11 percent, respectively, in FY15–19. The share of IDA funds targeted to FCS reached an average of 33 percent (FY20–24), up from 20 percent during a prior period (FY15–19). The share of advisory services and analytics (ASA) delivered in FCS, by contrast, remained flat, at 12 percent and 14 percent (FY15–19 and FY20–24, respectively).
Figure 3.1. Share of World Bank and International Development Association Commitments in FCS
Figure 3.1. Share of World Bank and International Development Association Commitments in FCS
Source: Independent Evaluation Group.
Note: IDA + blend calculations are based on country lending assigned at the time of approval. Calculations show commitment to FCS under the IDA + blend country group over the total IDA + blend country group commitments. FCS = fragile and conflict-affected situations; IDA = International Development Association.
During the strategy period (FY20–24), World Bank financing to FCS grew significantly, driven in part by newly classified FCS. In line with its strategic intent, financing support to FCS has expanded significantly since FY15 and especially since FY20, partly because some large borrowers have become FCS countries (World Bank 2023h; World Bank Group n.d.), including Nigeria in FY20, Ethiopia in FY22, and Ukraine in FY23 (figure 3.2). In FY24, these three countries accounted for 64 percent of all FCS commitments. Excluding these three countries, financing to FCS increased by an average of 7 percent annually between 2010 and 2024 in nominal terms (with Ethiopia, Nigeria, and Ukraine, the increase was 16 percent). Financing to traditional FCS (excluding these three new FCS list entrants) peaked in FY22, the final year of IDA19 and during the COVID-19 pandemic response, but has since declined by about 50 percent.
During FY20–24, annual commitments averaged $15.2 billion, compared with $5.2 billion in FY15–19, a nominal increase of 192 percent, with support to traditional FCS increasing by 72 percent. The increase includes the significant resources provided to Ukraine ($12 billion in FY23–24). This increase in financing to FCS over the past decade contrasts with a more modest 27 percent increase in nominal terms in non-FCS countries.
Figure 3.2. World Bank Support to FCS, FY10–24
Figure 3.2. World Bank Support to FCS, FY10–24
Source: Independent Evaluation Group.
Note: FCS = fragile and conflict-affected situations.
The average growth of commitments was a modest 3 percent in real terms over the evaluation period when excluding the increase in commitments due to FCS country reclassifications and the one-time COVID-19 pandemic response. In addition to being driven by newly classified FCS,1 the surge in financing to FCS since FY20 was due to inflation and the one-time COVID-19 pandemic response. While the classification of Ethiopia, Nigeria, and Ukraine as FCS led to 28 percent of the increase in commitments since FY10, inflation accounted for 27.4 percent of the increase, and 6.9 percent of the increase was in the one-time response to the COVID-19 pandemic. The period also saw country-specific increases and withdrawals in financing to FCS, such as in Afghanistan, the Democratic Republic of Congo, and Sudan. The highest commitment amount in FCS was in FY23, when it surpassed $20 billion, reflecting the World Bank’s substantial response to Russia’s invasion of Ukraine. Overall, traditional FCS saw a modest real increase of 3 percent per year throughout the evaluation period, indicating that there was no crowding out of traditional FCS during a period of geopolitical and pandemic crises. Among this group of traditional FCS, the Democratic Republic of Congo, the Federal Republic of Somalia, Sudan, and Timor-Leste saw significant growth in financing during the strategy period, while lending declined in The Gambia, Iraq, and Lebanon (figure 3.3).
FCS commitments are highly concentrated in six countries, and per capita commitments vary significantly. The six largest FCS borrowers—Nigeria (14 percent), Ukraine (12 percent), the Democratic Republic of Congo (10 percent), Mozambique (6 percent), Afghanistan (5 percent), and Ethiopia (5 percent)—accounted for 52 percent of lending during FY15–24, with the remaining 36 countries accounting for the rest. On a per capita basis, financial support by the World Bank varied from $17 to $800 per capita for the FY15–24 period, with a median of $228.2 Considering commitments throughout the entire 10-year period, Georgia ($800), Armenia ($580), Ukraine ($563), and Lebanon ($513) received relatively high per capita flows, whereas Zimbabwe ($17), Sudan ($57), and Myanmar ($68) received low per capita allocations as they were in arrears or under Operational Policy (OP) 7.30, precluding full engagement; overall, half the states (20 of the 42), excluding small island states,3 received allocation below the median, including the Democratic Republic of Congo, Iraq, and Nigeria.
Figure 3.3. Disaggregating the Growth of World Bank FCS Commitments
Figure 3.3. Disaggregating the Growth of World Bank FCS Commitments
Source: Independent Evaluation Group.
Note: FCS = fragile and conflict-affected situations.
The IDA FCV Envelope and trust fund resources contributed to the increase in FCS financing. IDA19 significantly scaled up resources for IDA FCS through the FCV Envelope top-up of performance-based allocation (PBA) financing to IDA countries facing FCV risks with a structure of incentives and accountabilities for countries to reduce their FCV risks. During FY21–24, the IDA FCV Envelope allocations accounted for 22 percent of financing in IDA FCS. FCS also received 80 percent of total World Bank recipient-executed trust fund disbursements in FY19–23, with Afghanistan, Ukraine, and West Bank and Gaza being the top beneficiaries (World Bank 2023h).4 Reliance on trust funds for FCS commitments will have implications for sustaining financing levels in the environment of reduced official development assistance anticipated in the coming years (figure 3.4).
Figure 3.4. Sources of FCS Financing
Figure 3.4. Sources of FCS Financing
Source: Independent Evaluation Group.
Note: The graph shows the total amount of financing by source to FCS countries as reported in the World Bank Group system. Apart from FCS filtering, no calculations were made. FCS = fragile and conflict-affected situations; FCV = fragility, conflict, and violence; IBRD = International Bank for Reconstruction and Development; IDA = International Development Association.
Supporting investments in FCS has been a strategic priority for both IFC and MIGA. IFC and MIGA have set ambitious targets to scale up their business volume in FCS. Supporting investments in FCS has been a corporate priority for IFC since 2009. With the 2018 capital increase package, IFC committed to increasing its share of own-account long-term finance investment commitments in IDA countries and FCS to 35 to 40 percent, with 15 to 20 percent in low-income IDA FCS by FY30. FCS has been a strategic priority for MIGA since 2005. Subsequent MIGA strategies reaffirmed this commitment, with the FY21–23 strategy setting targets for IDA FCS to an average of 30 to 33 percent of new guarantee volume, and the current MIGA FY24–26 strategy aims to increase engagement in IDA countries and FCS, although it does not set a specific target.
IFC and MIGA have increased their commitments in FCS, but IFC has not sufficiently scaled up its business in FCS to meet ambitious corporate commitments. IFC committed $4.65 billion in long-term finance in FY20–24, up from $2.22 billion in FY15–19.5 Average annual commitments more than doubled between the two periods, from $444 million (FY15–19) to $929 million (FY20–24), reaching $1.43 billion in FY24. This commitment reflects 6.4 percent of IFC’s long-term finance during the FCV strategy period (FY20–24; figure 3.5). As is the case for the World Bank, much of the increase reflects commitments in new FCS. In FY24, Nigeria and Ukraine accounted for two-thirds of IFC’s FCS long-term finance. In terms of the number of investment projects, IFC committed 174 investments in FCS, or 12 percent of all projects, during FY20–24. While IFC has increased commitments in FCS, it has not met corporate targets. IFC’s commitments in IDA17 and FCS (the key performance indicator that IFC tracks) reached 21 percent of total long-term financing in FY19–24, compared with a capital increase target of 32.5 percent for FY19–30 (World Bank Group 2020, 2025). Private activity in FCS has been affected during the strategy period by the disruptions due to the COVID-19 pandemic and, since then, the context of a historically weaker level of growth than in the decade before COVID-19, including a decline in foreign direct investments (World Bank 2025c).6 In addition to long-term financing, IFC short-term finance—predominantly comprising Global Trade Finance Program guarantees—plays an important role in FCS and rose from $208 million in FY15 to $313 million in FY24 according to IFC’s management information system. (IFC’s proprietary commitment database, using a different accounting methodology, shows short-term finance increasing from $149 million in FY15 to $3,162 million in FY24.) During the strategy period (FY20–24), IFC’s short-term finance has been largely driven by guarantees in Nigeria. IFC has also successfully scaled up core private capital mobilization in FCS, which increased from $412 million in FY20 to $2.4 billion in FY24.
MIGA issued guarantees in FCS for $2.65 billion in FY20–24, or 9.2 percent of its guarantee volume and 19 percent of projects, with significant fluctuation in its engagements year over year. Guarantee volumes in FCS have increased in recent years, but that increase is driven by the addition of three large countries—Ethiopia, Nigeria, and Ukraine (figure 3.6)—with a significant increase in 2023 driven by guarantees in Ethiopia and Ukraine. MIGA guarantees in FCS were solely for political risk insurance for, among other things, war and civil disturbance or for inconvertibility or transfer restrictions relevant to investor concerns related to fragility, while MIGA’s credit insurance (nonhonoring of financial obligations) was not used due to the high sovereign risk of FCS.7 MIGA has met its corporate target for the broader IDA17 and FCS metric of 30 to 33 percent of new guarantee volume since FY23, with FCS representing a smaller fraction of the composite metric (9 percent in FY24).
Figure 3.5. International Finance Corporation Long-Term Commitments in FCS
Figure 3.5. International Finance Corporation Long-Term Commitments in FCS
Sources: Independent Evaluation Group; International Finance Corporation.
Note: FCS = fragile and conflict-affected situations; IFC = International Finance Corporation.
Figure 3.6. Multilateral Investment Guarantee Agency Guarantees in FCS
Figure 3.6. Multilateral Investment Guarantee Agency Guarantees in FCS
Sources: International Evaluation Group; Multilateral Investment Guarantee Agency.
Note: FCS = fragile and conflict-affected situations; MIGA = Multilateral Investment Guarantee Agency.
Financing Through the International Development Association FCV Envelope
IDA19 created a World Bank FCV Envelope to enhance available financing to support eligible IDA countries facing certain types of FCV risks, providing cumulative $10.4 billion in commitments during IDA19 and IDA20. Building on special FCV top-ups introduced in IDA17 and IDA18, IDA19 created the World Bank FCV Envelope. Allocations from the FCV Envelope complement PBAs for eligible countries, and the envelope was envisioned as a key financing tool of the FCV strategy (World Bank 2021a). The FCV Envelope is a global set-aside with an original size of $7.5 billion in IDA19,8 increasing to $8.8 billion in both IDA20 and IDA21 (IDA 2022, 2024). Actual allocations stood at $2.3 billion for the IDA18 precursor instruments, $5.4 billion under IDA19, and $5 billion to date under IDA20.9 The remaining funds were reallocated as part of the reallocation of PBAs.
IDA19 created three separate FCV Envelope allocations to support the implementation of the pillars in IDA-eligible countries. These allocations build on their predecessor instruments in IDA18, the Turn Around Regime and the Risk Mitigation Regime (figure 3.7; IDA 2020). In IDA19 and IDA20, each allocation mirrored a pillar of engagement of the strategy. Eligibility for PRA and the TAA resources is determined through criteria that emphasize government commitment and leadership, with the objective of recalibrating country programs in partnership with governments to address drivers of FCV and to offer a strong incentive and accountability structure (World Bank 2021a).10
- The Prevention and Resilience Allocation (PRA) provides enhanced support for countries at the highest risk of descending into high-intensity conflict or large-scale violence, based on the government’s strategy and agreed milestones. PRA countries receive up to a 75 percent boost to their PBA, up to a national top-up cap of $700 million during IDA19 and IDA20 (World Bank 2020).
- The Remaining Engaged during Conflict Allocation (RECA) enables IDA to maintain a base level of engagement in a small number of countries that experience high-intensity conflict and have extremely limited government capacity. The RECA also codifies the World Bank’s ability to partner with UN agencies or international nongovernmental organizations (NGOs) in certain limited circumstances for development projects that benefit RECA countries. These countries receive a floor PBA allocation equivalent of a country performance rating of 2.5, up to $300 million in IDA19 and IDA20 (World Bank 2020).
- The Turn Around Allocation (TAA) supports countries emerging from conflict, social and political crises, or disengagement, where there is a window of opportunity to pursue reforms that can accelerate a transition out of fragility and build resilience, based on the government’s commitment and agreed milestones. TAA countries receive up to a 125 percent PBA top-up, with a cap of $1.25 billion per country during IDA19 and IDA20 (World Bank 2020).
Figure 3.7. FCV Strategy Pillars and IDA19 Country Caps
Figure 3.7. FCV Strategy Pillars and IDA19 Country Caps
Source: World Bank 2020.
Note: CPR = country performance rating; FCV = fragility, conflict, and violence; IDA19 = 19th Replenishment of the International Development Association; PBA = performance-based allocation.
The TAA and the PRA require governments to commit to a reform agenda that includes milestones. The IDA18 Risk Mitigation Regime and Turn Around Regime allocations prompted some countries to include conflict sensitivity in ASA, including multisector programmatic ones, to ensure portfolio-wide strategy and policy actions. These allocations also led to recipient countries presenting a more coherent narrative about their transition out of fragility (World Bank 2021d). Leveraging insights from this experience, the IDA19 FCV Envelope was designed to strengthen IDA’s ability to respond more rapidly. This was achieved by embedding milestones and a portfolio recalibration within the PRA and the TAA. The RECA does not include these changes, in recognition that in that period of the conflict cycle the focus should be on remaining engaged, as moving toward long-term goals is more challenging.
FCV allocations under IDA19 and IDA20 provided substantial financial top-ups to other IDA resources, such as the PBA—averaging 40 percent of recipient countries’ IDA commitments during the years they were on the FCS list—which enabled increased engagement and delivery in highly fragile environments.11 ,12 The FCV Envelope and its Risk Mitigation Regime and Turn Around Regime predecessors allocated $2.3 billion under IDA18, $5.4 billion under IDA19, and $5 billion to date under IDA20, accounting for a growing share of total IDA FCV financing (table 3.1). IEG calculations show that countries such as Mali, the Federal Republic of Somalia, and Sudan received top-ups exceeding 50 percent of their other overall commitments during that period, with the Federal Republic of Somalia receiving the highest relative boost under IDA20. Overall, usage was strong despite project implementation challenges. The RECA instrument has played a critical role in maintaining engagement in countries with conflict-induced declining Country Policy and Institutional Assessment scores, such as South Sudan and the Republic of Yemen. Drawing on the Republic of Yemen’s IDA18 experience, RECA has helped preserve service delivery, support institutional capacity, and expand the World Bank’s portfolio—mainly through partnerships with UN agencies—ensuring a development presence during periods of acute fragility.
The FCV Envelope helped ensure a more structured policy dialogue with government authorities on FCV. The systematic process for establishing and maintaining eligibility to access FCV Envelope financing allowed IDA to engage comprehensively, including on the governance and security dimensions of fragility, to elevate and further focus country-level discussions on FCV dynamics, anchored in specific government milestones (IDA 2020). The introduction of a systematic eligibility process for accessing PRA and TAA financing has enabled IDA to support client governments in developing prevention and transition strategies that integrate the interlinked dimensions of development, governance, and security. To maintain eligibility, annual reviews of PRA and TAA milestones are required, ensuring a continued focus on effective prevention and transition efforts. This process has incentivized stronger dialogue with clients and government policy on prioritizing support for peace, stability, and inclusion (World Bank 2024e). In Niger, the PRA dialogue resulted in a national security policy, a national internal security strategy, a counter-radicalization strategy, and the establishment of peace committees in all border and at-risk municipalities (IDA 2023; World Bank 2023e). In Burundi, the government approved a PRA action plan along with its budget to show the real budget allocations made from government resources for upcoming prevention and resilience activities (World Bank 2023e).
Table 3.1. Actual Fragility, Conflict, and Violence Envelope Allocations per Country (US$, millions)
|
Country |
Allocation |
IDA18 |
IDA19 |
IDA20 |
|---|---|---|---|---|
|
Benin |
PRA |
— |
— |
335 |
|
Burkina Faso |
PRA |
— |
600 |
467 |
|
Burundi |
PRA |
— |
— |
214 |
|
Cameroon |
PRA |
— |
265 |
441 |
|
Central African Republic |
TAR and TAA |
228 |
162 |
140 |
|
Chad |
PRA |
— |
133 |
289 |
|
Congo, Dem. Rep. |
PRA |
— |
600 |
467 |
|
Haiti |
RECA |
— |
— |
29 |
|
Gambia, The |
TAR and TAA |
157 |
76 |
194 |
|
Guinea |
RMR |
147 |
— |
— |
|
Madagascar |
TAR |
821 |
— |
— |
|
Mali |
PRA |
— |
465 |
147 |
|
Mozambique |
PRA |
— |
600 |
700 |
|
Nepal |
RMR |
300 |
— |
— |
|
Niger |
RMR and PRA |
300 |
600 |
233 |
|
Tajikistan |
RMR |
100 |
— |
— |
|
Togo |
PRA |
— |
— |
252 |
|
Somalia, Fed. Rep. |
TAR and TAA |
219 |
495 |
629 |
|
South Sudan |
RECA |
— |
137 |
162 |
|
Sudan |
TAA |
— |
1,049 |
— |
|
Yemen, Rep. |
RECA |
— |
228 |
300 |
|
Total |
n.a. |
2,273 |
5,412 |
4,999 |
Source: Independent Evaluation Group.
Note: — = not available; IDA18 = 18th Replenishment of the International Development Association; IDA19 = 19th Replenishment of the International Development Association; IDA20 = 20th Replenishment of the International Development Association; n.a. = not applicable; PRA = Prevention and Resilience Allocation; RECA = Remaining Engaged during Conflict Allocation; RMR = Risk Mitigation Regime; TAA = Turn Around Allocation; TAR = Turn Around Regime.
IEG analyzed progress on 388 FCV Envelope annual targets and found that countries achieved, on average, more than half of their milestones.13 PRA and TAA milestones are not binding conditions but serve as monitoring indicators to assess whether the country’s government remains committed to the prevention and transition strategies, justifying continued FCV Envelope support.14 Including the Risk Mitigation Regime and the Turn Around Regime, 37 IDA FCV Envelope allocations were provided to 21 countries during IDA18, IDA19, and IDA20. IEG has analyzed the annual targets related to those allocations to assess progress.15 The share of targets that were achieved on time was roughly consistent across the IDA cycles for both the PRA and TAA (table 3.2). Countries achieved 56 percent of their targets, while 31 percent saw some progress and 13 percent no progress. The countries with the highest shares of achieved targets across IDA periods were Mali (77 percent), Niger (69 percent), and Cameroon (68 percent). The countries with the highest shares of targets with no progress made were the Democratic Republic of Congo and the Federal Republic of Somalia (both 32 percent) and Guinea (29 percent). This evaluation did not assess the relevance and appropriateness of the selected targets.
Table 3.2. Annual Target Achievement Rates (percent)
|
Achieved Annual Targets |
IDA18, FY18–20 |
IDA19, FY21–22 |
IDA20, FY23–24 |
Total |
|
Prevention and Resilience Allocation |
n.a. |
58 |
56 |
57 |
|
Risk Mitigation Regime |
27 |
n.a. |
n.a. |
27 |
|
Turn Around Allocation |
n.a. |
52 |
55 |
54 |
|
Turn Around Regime |
76 |
n.a. |
n.a. |
76 |
|
Total |
57 |
55 |
55 |
56 |
Source: Independent Evaluation Group.
Note: IDA18 = 18th Replenishment of the International Development Association; IDA19 = 19th Replenishment of the International Development Association; IDA20 = 20th Replenishment of the International Development Association; n.a. = not applicable.
Most FCV targets focused on upstream reforms rather than tangible outcomes, yet those targeting results on the ground showed stronger progress. IEG found that only 20 percent of targets fall into the results on the ground category, with the majority instead emphasizing policy, legislative, or systems-strengthening goals. This emphasis is particularly evident in the governance cluster, where 99 percent of targets do not track results on the ground. In contrast, the basic services cluster and the justice and security cluster include a larger share of ground-level outcomes (48 percent and 32 percent, respectively). Despite their limited share, results-oriented targets tended to progress best, suggesting that FCV allocations can effectively incentivize concrete service delivery and coordination with other actors. Notable examples include improved access to local justice services in Burkina Faso, improved access to basic services in The Gambia, and increased access to bilingual public schools in Cameroon. The slower progress on policy and systems-level targets highlights the difficulty of advancing structural reforms in fragile contexts.
The milestones added up to important steps on countries’ transitions out of fragility. In the Federal Republic of Somalia, the TAA contributed to completing the heavily indebted poor country process and supported the strengthening of relations between the federal government and its member states (World Bank 2025e). In the Central African Republic, the TAA helped advance strategic goals even while implementation progress slowed during a volatile period. Holding elections and forming a new government were discussed and agreed on as the most critical milestones that would trigger continued access to TAA resources. This approach helped incentivize the government to hold elections within the foreseen deadlines (World Bank 2021a). The Gambia completed the Truth, Reconciliation and Reparations Commission process, resulting in a report submitted to the government and publicly disclosed (World Bank 2023e).
Despite many achievements, progress on some FCV Envelope milestones was uneven. The annual reviews of various countries were delayed or put on hold due to stalled key reforms, insufficient government information, or unexpected political turmoil.16 Five of the countries benefiting from FCV Envelope allocations (Burkina Faso, Chad, Mali, Niger, and Sudan) experienced political shocks in the forms of coups d’état or unforeseen political transitions that paused operations and affected policy dialogue, which in turn affected progress on some milestones; other countries experienced delays in information gathering or challenges to advancing reforms (IDA 2020).
Portfolio recalibrations often resulted in scaling up existing programs rather than developing a significantly different portfolio. Countries accessing the PRA or TAA are required to recalibrate their lending portfolios to ensure every project addresses one or more drivers of conflict, as identified by the Risk and Resilience Assessment (RRA) or other FCV diagnostics. This requirement has led to project cancellation, restructuring, and redesign (World Bank 2024e). Across countries, this process has improved geographical and beneficiary targeting, enhanced attention to inclusion and social standards, and enabled better management of risks through tools such as environmental and social frameworks and public financial management (IDA 2020). However, in many countries, this led to redefinition rather than recalibration, meaning that while projects were better related to the drivers of conflict and have undergone project-level improvements in delivery mechanisms, they remain largely the same interventions as before. For example, in the Democratic Republic of Congo, the PRA supported refined geographical targeting but did not significantly alter the makeup of the portfolio. In some countries there were portfolio-wide impacts. In Chad, the process involved narrowing the focus to fewer sectors and expanding operations in conflict-affected and high-risk areas. In Mali and Mozambique, it entailed adopting a spatial approach to differentiate interventions based on their location—targeting areas surrounding active conflict, buffer zones at risk of escalation, historically marginalized regions, and urban and peri-urban areas—aligning with the government’s strategy (World Bank 2023e). In Niger, the process led to significant transformation from an ad hoc approach with a few projects in conflict hot spots to a comprehensive, portfolio-wide approach (IDA 2020).
The PRA and TAA processes offered a robust platform for engagement with stakeholders and development partners. The eligibility process was often the first time that under government leadership, development, humanitarian, and security-related issues were comprehensively discussed with partners within a single policy framework (World Bank 2024e). This coordination involved aligning diagnostics and approaches to address key policy challenges, consultations on milestones, and joint monitoring. This has proven particularly valuable on issues that are outside the Bank Group’s comparative advantage or mandate, or where partners are providing support, notably on political, stabilization, security, humanitarian, and justice matters (World Bank 2024e). For example, the UN helps to monitor the political and security situation and related milestones in several countries (World Bank 2023e). In Mozambique, the eligibility process fostered candid dialogue on structural conflict drivers, shifting from security-based approaches to a comprehensive reconciliation, peace building, and inclusion strategy. The consultative process helped build a coalition and agreement on the baseline narrative, opening the way for multilateral support (the African Development Bank, the European Union, the UN, and the Bank Group) to the government for the north (IDA 2020). This enabled the government to create a comprehensive approach and monitoring framework to mitigate the risks of conflict escalation (World Bank 2021b). In Burkina Faso, the PRA eligibility process has strengthened policy dialogue and collaboration, placing conflict prevention at the center of discussions with the government and stakeholders. The PRA’s formalization of government commitments sustained momentum on key issues, including national reconciliation and the publication of a national reconciliation strategy (World Bank 2021a).
The PRA was designed to prevent further escalation of conflict but often comes too late for prevention. The PRA eligibility criteria in IDA19 and IDA20 made it unlikely that countries would receive a PRA before being added to the FCS list. Thus, because of its design, the PRA was better configured to prevent further escalation of conflict in places where there are already conflict-related fatalities as opposed to supporting more upstream conflict prevention. In Benin and Togo, the World Bank recently granted an in-principle agreement to allow for the preparation of a waiver request and an eligibility note for the PRA before the quantitative eligibility threshold was reached.17 The World Bank has held internal discussions as to whether it could do more and intervene earlier with dedicated funding for conflict prevention in countries that are committed to addressing key drivers of conflict (World Bank 2024e). IDA21 acted on this by broadening the range of data used to establish qualifying levels of conflict or the risk thereof to enhance upstream prevention (IDA 2025).
While RECA allocations have maintained IDA engagements and preserved institutions, sustainability is a challenge. The RECA countries, Haiti, South Sudan, and the Republic of Yemen, have used their allocations to maintain and expand existing IDA engagements, respond to basic needs, and build local capacity. Given the intensity of the conflict and the Republic of Yemen’s OP 7.30 status and low capacity, engagements in the Republic of Yemen have been partially implemented through UN third-party implementation (TPI).18 Supplemental funding has also allowed the World Bank to preserve the capacity of local institutions (World Bank 2023e). However, RECA countries are dependent on allocations, and sudden reductions can lead to challenging portfolio contractions. The Republic of Yemen received additional allocations under IDA18 and maintained high commitments during the shortened IDA19 cycle. While in FY23 this commitment was maintained by front-loading IDA20 commitments, it now implies a shrinking of the program.
So far, successful transitioning of FCS along the FCV Envelope allocations has not happened as envisioned. The different allocations were designed to support countries through and out of the conflict cycle, yet none of the countries have moved as expected from one allocation to another. Of the 10 countries that have received the PRA, 4 saw conflict worsen (Burkina Faso, the Democratic Republic of Congo, Mali, and Niger). All these countries no longer receive the PRA. Among TAA countries, gains have been made in the Federal Republic of Somalia and especially in The Gambia. Sudan has backslid and is no longer eligible. For the Central African Republic, the latest annual review concluded that “the perceived window of opportunity and transition for [the Central African Republic] is no longer apparent, and [the Central African Republic] is not turning around” (World Bank 2024i, 7). If countries were to move out of recipient status, they could experience a contraction of their program, as management noted at the IDA19 MTR (IDA 2020). This poses risks to the sustainability of the achieved development gains. Box 3.1 offers some lessons from these FCV allocations.
Box 3.1. Lessons from International Development Association Fragility, Conflict, and Violence Envelope Allocations
The annual milestone reviews and strategic planning have proved key to the success of the Fragility, Conflict, and Violence (FCV) Envelope. These reviews have highlighted the need for clearly defined milestones, outcome-focused indicators, and a strong alignment with the envelope’s objectives. Given the complexity of country contexts, proactively using annual reviews to document local shifts, assess progress and challenges, and refine the World Bank’s approach is essential for maintaining effective policy dialogue and adapting milestones as needed. This proactive strategy also ensures that the FCV Envelope’s overarching goals are preserved and that the World Bank’s support remains relevant. Additionally, given the fluid nature of FCV settings, careful planning of funding levels will be crucial as countries either advance in conflict prevention and recovery or become ineligible for FCV Envelope top-ups.
The Prevention and Resilience Allocation was not accessible to countries at the earliest stage of their conflict cycle during the 19th and 20th Replenishments of the International Development Association. Recent experiences with Benin and Togo enabled countries that were committed to addressing drivers of conflict to access Prevention and Resilience Allocation funding earlier. However, conflict prevention is desirable and possible in a wide range of countries.
Closing the gap between milestones and reducing drivers could increase insight into the progress out of conflict. The Prevention and Resilience Allocation and the Turn Around Allocation include robust milestone frameworks. However, because of the need to capture yearly progress in low-capacity environments, the majority of milestones are output focused. Consequently, while every milestone is connected to a driver of conflict, there is a gap in the theory of change between the outputs and the outcome of reducing the drivers of conflict. Including more long-term indicators that measure the progress toward addressing the drivers of conflict could shine a light on the recipient countries’ limited progress out of conflict.
Source: Independent Evaluation Group.
World Bank Administrative Budgets in FCS
The FCV strategy stressed the need for increased administrative budgets to address the higher cost of doing business in FCS, due to the complexity and riskiness of operating in FCS. However, the strategy did not indicate specific targets for increasing administrative budget allocations. The strategy’s MTR pointed to cost pressures arising from the higher cost of staffing positions in FCS (more than 40 percent higher than in non-FCS), benefits, and facilities and security costs. IEG analysis and interviews with task team leaders (TTLs) also point to the higher cost of project supervision in FCS.
Annual administrative budget allocations to FCS increased by 29 percent during FY19–25, but they were flat when accounting for the new classification of Ethiopia and Nigeria as FCS—and in real terms, they decreased. The FCS administrative budgets, including the World Bank’s work program (World Bank budget) and trust funds, grew more than twice as fast as the non-FCS administrative budgets, with a substantial increase of 29 percent between 2019 and 2025, from $287 million to $369 million, compared with an increase of 13 percent for the non-FCS administrative budgets (figure 3.8). The entry of Ethiopia and Nigeria into the FCS classification largely drove that growth (figure 3.9), whereas the classification of Ukraine as an FCS in 2023 only slightly contributed to the FCS administrative budget increase. When these three countries are excluded, the administrative budget is flat across the years, at just below $300 million. After adjusting for inflation, administrative budgets for FCS increased by only 6 percent between FY19 and FY25. Excluding the newly classified FCS, the administrative budgets for FCS declined by 21 percent in real terms (figure 3.9, panel b).
Nearly half of administrative budgets are sourced from trust funds, with the use of trust funds increasing in FCS. There is no significant difference in the source of administrative budgets for FCS and non-FCS. For both groups, most spending came from the World Bank budget. Between 2019 and 2024, an average of 55.6 percent of FCS spending was funded from the World Bank administrative budget, compared with 54.0 percent of non-FCS spending. Forty-two percent of FCS budgets came from trust funds, compared with 39 percent of non-FCS budgets. Administrative World Bank budgets increased proportionately by 37 percent for FCS and 36 percent for non-FCS in nominal terms between FY19 and FY25—thus not showing increased emphasis on FCS. However, trust funds increased for FCS by 25 percent but declined for non-FCS by 4 percent. The dynamic of increasing the use of trust funds to complement World Bank budgets in FCS will be challenging to sustain in an environment in which official development assistance is becoming more constrained.
Figure 3.8. Planned Spending in All FCS and Traditional FCS, 2019–25
Figure 3.8. Planned Spending in All FCS and Traditional FCS, 2019–25
Source: Independent Evaluation Group analysis of World Bank budget data.
Note: FCS = fragile and conflict-affected situations.
Meanwhile, administrative budgets and financial commitments have been decoupled, with administrative budgets not keeping pace with the growth of FCS financing available. Although the project count in FCS has grown by just 24 percent, the FCS portfolio commitment amount has increased by nearly 200 percent over the past five years (figure 3.10), while administrative budgets increased by 29 percent in nominal terms. This reflects the rapid growth in project size in FCS. In 2019, the average project size in FCS was about $80 million (compared with $160 million in non-FCS). By 2024, the average project size in FCS had increased to about $170 million, similar to the project size in non-FCS. Large operations in Ethiopia, Nigeria, and Ukraine contributed to this trend. Without these three countries, the average project size in FCS reached $120 million, an increase of 50 percent since 2019. In contrast, financial commitments in non-FCS grew at 18 percent, with administrative budgets for this group of countries increasing at a similar pace (13 percent). The decoupling of rapidly increasing lending volumes and essentially flat real administrative budgets in FCS raises concerns about the capacity to prepare and supervise projects appropriately in the context of lower client capacity and the higher cost of doing business in FCS.
Figure 3.9. Growth of Planned Spending in Nominal and Real Terms in FCS and Non-FCS
Figure 3.9. Growth of Planned Spending in Nominal and Real Terms in FCS and Non-FCS
Source: Independent Evaluation Group.
Note: FCS = fragile and conflict-affected situations.
Given these administrative budget realities, Country Management Units (CMUs) allocated a larger proportion of the World Bank–funded budget to supervision in FCS than in non-FCS, at the cost of project preparation and ASA allocations in FCS. CMUs in FCS allocated a larger share to supervision budgets than those in non-FCS, reflecting the higher cost of doing business in FCS. The share of administrative budgets in FCS dedicated to project supervision increased from 37 percent in 2019 to 47 percent in 2024 (figure 3.11). This trend remains similar even when Ethiopia, Nigeria, and Ukraine are excluded from the calculations. Conversely, the share of administrative budget allocated to project preparation and ASA decreased more in FCS than in non-FCS. While allocating more administrative budgets to project supervision in FCS is in line with the higher supervision cost and capacity needs in complex FCV settings and can support better project implementation, reducing the share of project preparation and ASA budgets puts the quality of project preparation at risk.
Figure 3.10. Growth in Projects and Commitments, 2019–24
Figure 3.10. Growth in Projects and Commitments, 2019–24
Source: Independent Evaluation Group.
Note: FCS = fragile and conflict-affected situations.
Consequently, average actual supervision costs per project in FCS have been increasing at a higher pace than those in non-FCS. The average supervision cost in FCS grew by 65 percent (from $255,000 per project in 2019 to $420,000 per project in 2024), while the average supervision cost in non-FCS grew only by 36 percent (from $235,000 per project in 2019 to $320,000 per project in 2024). The growing average supervision costs in FCS reflect the need to address the complex nature of projects in FCS, which require more capacity building, more frequent visits, and increased security spending for supervision.
Figure 3.11. Planned Spending by Business Process in FCS and Non-FCS, 2019–24
Figure 3.11. Planned Spending by Business Process in FCS and Non-FCS, 2019–24
Source: Independent Evaluation Group analysis.
Note: ASA = advisory services and analytics; FCS = fragile and conflict-affected situations.
- Since FY20, the number of FCS countries has grown with the addition of Burkina Faso, Cameroon, Ethiopia, Niger, Nigeria, and Ukraine.
- Some FCS countries are nonborrowers (for example, Eritrea, Libya, the Syrian Arab Republic, and República Bolivariana de Venezuela).
- Small island states, which also received large per capita financial flows, were not considered in this analysis, as they were outliers given the minimum IDA country allocations.
- IEG calculated IDA FCV commitments of $47 billion, with the FCV Envelope of $10.4 billion accounting for 22 percent, based on the FCS list, as described in appendix A.
- Data include IFC own-account long-term finance based on the World Bank list of fragile situations for each fiscal year. Regional investments with commitments earmarked for FCS countries are included.
- See also “IFC’s Approach to Scaling Delivery in IDA and FCS Countries Through 2030,” ED Seminar, September 16, 2024 (OM2024-0053).
- However, in FY25 MIGA supported a transaction with Banque Ouest Africaine de Développement under its nonhonoring of financial obligations cover for regional development banks, which intends to support the bank’s operations in West African Economic and Monetary Union countries, including some that are FCS.
- Following adjustments to the overall size of IDA19 in response to COVID-19, the allocation was reduced to $6.3 billion for the two-year cycle (IDA 2021).
- The reference rates for converting special drawing rates to US dollars for each cycle are as follows: IDA18, 1.40207; IDA19, 1.38318, IDA 20, 1.42934.
- This applies only to the PRA and the TAA, not to the RECA.
- IEG’s calculations are based on country commitments during countries’ years on the FCS list (as described in appendix A), and not on allocations as reported in project appraisal documents.
- IDA20 FCV Envelope allocations currently exclude FY25 and will be updated once FY25 commitments for both the FCV Envelope and the Bank Group lending operations are finalized. Current FCV Envelope allocations are as of February 2025.
- As noted, the PRA and the TAA, as well as their Risk Mitigation Regime and Turn Around Regime predecessors, require a government to commit to a reform agenda, including milestones. These commitments are not conditionalities for further IDA support under the PRA, nor are they binding legal conditions; rather, they provide monitoring indicators to credibly assess whether the country environment remains adequate for IDA-financed activities and resources to support countries in achieving their sustainable development goals and conflict prevention agenda. Although the Risk Mitigation Regime and the Turn Around Regime preceded the IDA FCV Envelope allocations under the FCV strategy, they are included in this analysis to provide a more detailed longitudinal comparison.
- An FCV Envelope milestone is a multiyear government commitment or objective (typically over about three years) that targets key FCV drivers and guides the overall prevention or transition policy dialogue under the PRA or the TAA. Milestones anchor eligibility and are reviewed annually. An annual target is the specific, time-bound step or subgoal for a given year toward achieving that milestone. Annual targets are what the World Bank reviews each year to confirm continued eligibility and adjust the program as needed.
- Five of the 37 were RECA allocations to Haiti, South Sudan, and the Republic of Yemen. For the remaining 32 allocations, IEG identified milestones for 27. From those milestones, 405 annual targets were identified; 388 were closed with sufficient data to assess progress.
- The countries in which annual reviews stalled or were put on hold include Cameroon, the Central African Republic, Mali, and Sudan in FY22; Cameroon and the Central African Republic have since successfully completed the annual review process in FY23.
- Benin reached the PRA quantitative criteria by the time the eligibility process was completed. Togo was the first and only country to be granted a waiver to access the PRA before the criteria were met.
- Priority interventions have included income support, food security, basic health and nutrition, cholera response, urban services delivery, and restoration of agriculture production (World Bank 2023e).