INTERNATIONAL FINANCE

THE WORLD BANK

An international organization dedicated to providing financing, advice and research to developing nations to aid their economic advancement. Investopedia explains 'The World Bank' The World Bank was created at the end of World War II as a result of many European and Asian countries needing financing to fund reconstruction efforts. Created out of the Bretton Woods agreement of 1944, the Bank was successful in providing financing for these devastated countries. Today, the Bank functions as an international organization that attempts to fight poverty by offering developmental assistance to middle and poor-income countries. By giving loans, and offering advice and training in both the private and public sectors, the World Bank aims to eliminate poverty by helping people help themselves.

History:
The World Bank is one of five institutions created at the Bretton Woods Conference in 1944. The International Monetary Fund, a related institution, is the second. Delegates from many countries attended the Bretton Woods Conference. The most powerful countries in attendance were the United States and United Kingdom, which dominated negotiations. The main objectives behind setting up this international organization were to aid the task of reconstruction of the war-affected economies of Europe and assist in the development of the underdeveloped nations of the world. For the first few years, the World Bank remained preoccupied with the task of restoring war-torn nations in Europe. Having achieved success in accomplishing this task by late 1950s, the World Bank turned its attention to the development of underdeveloped nations. It was the world's first multilateral development bank, and was funded through the sale of World Bonds. Its first loans were to France and other European countries, but soon lent money to Chile, Mexico and India to build power plants and railways. By 1975, the Bank also lent money to countries to help with family planning, pollution control and environmentalism. World Bank as a Whole: The World Bank provides financial and technical assistance to emerging market countries. The World Bank is not actually a bank in the common sense. Instead, it consists of two development institutions -- the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)-- owned by 186 member countries. The Bank is closely affiliated with three other organizations --the International Finance Corporation (IFC), the Multilateral Guarantee Agency (MIGA), and the International Centre for the Settlement of Investment Disputes (ICSID) -- that support its goal of reducing worldwide poverty. The five organizations make up the World Bank Group.

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What Is the Purpose of the World Bank?

The Bank's charter, drafted in 1944 and called "Articles of Agreement," defines five purposes for the institution but does little to clarify the goals. Three purposes provide some general strategic direction and two have a more operational orientation. According to the Articles of Agreement, the three strategic purposes of the Bank are: 1) To help member states to reconstruct and develop by facilitating capital investment 2) To promote foreign private investment 3) To promote the long-range balanced growth of international trade and the maintenance of equilibrium in balances of payments. This should be achieved by encouraging international investment aimed at mobilizing domestic resources and thus "raising productivity, the standard of living and conditions of labor." The other two operational purposes in the Articles emphasize 4) The need to coordinate with other lending agencies 5) The need "to conduct its operations with due regard to the effect of international investments to business conditions" Now, the World Bank's main goal is to reduce poverty and to improve the living standards of the people in low and middle-income countries. The World Bank is one of the worlds largest sources of funding and knowledge to support governments of member countries in their efforts to invest in schools and health centers, provide water and electricity, fight disease and protect the environment. What are the functions of World Bank? Main functions of World Bank are as follows: Provide funds for development projects Provide policy advice and technical assistance Promote investment in developing countries Extend grants for project preparation and institutional building The World Bank provides low-interest loans, interest-free credits and grants to developing countries. The World Bank loans are usually to invest in education, health, and infrastructure. The loans can also be used to modernize a country's financial sector, agriculture, and natural resources management.

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The Bank's goal is to "bridge the economic divide between poor and rich countries, to turn rich country resources into poor country growth and to achieve sustainable poverty reduction." To achieve this goal, the Bank focuses on six areas: 1. Overcome poverty by spurring growth in the poorest countries, focusing on Africa. 2. Offer reconstruction to poor countries emerging from war, a major contributing factor to extreme poverty. 3. Provide a customized development solution to help those middle-income countries overcome problems that could throw them back into poverty. 4. Spur governments to act on preventing climate change, controlling communicable diseases, (especially HIV/AIDS and malaria), managing international financial crises, and promoting free trade. 5. Work with the League of Arab States to improve education, build infrastructure and provide micro-loans to small businesses in the Arab world. 6. Share its expertise with developing countries, and its knowledge with anyone via reports and its interactive online database. Today, the services provided by the World Bank have increased manifold. The World Bank is no longer confined to simply providing financial assistance for infrastructure development, agriculture, industry, health and sanitation. It is rather significantly involved in areas like removal of rural poverty through raising productivity, increasing income of the rural poor, providing technical support, and initiating research and cooperative ventures. Who Runs the World Bank? Robert Zoellick has been President of the World Bank since 2007. The Bank has more than 10,000 employees from over 160 countries. Two-thirds work in Washington, DC, with the rest stationed in 100 country offices in the developing world. What is Source of Funding for World Bank? The World Bank is an investment bank, intermediating between investors and recipients, borrowing from the one and lending to the other. Its owners are the governments of its 186 member nations with equity shares in the Bank, which were valued at about $176 billion in June 1995. The IBRD obtains most of the funds it lends to finance development by market borrowing through the issue of bonds (which carry an AAA rating because repayment is guaranteed by member governments) to individuals and private institutions in more than 100 countries. Its concessional loan associate, IDA, is largely financed by grants from donor nations. The Bank is a major borrower in the world's capital markets and the largest nonresident borrower in virtually all countries where its issues are sold. It also borrows money by selling bonds and notes directly to governments, their agencies, and central banks. The proceeds of these bond sales are lent in turn to developing countries at affordable rates of interest to help finance projects and policy reform programs that give promise of success.

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Who Are The Recipients Of Funding Of World Bank? Neither wealthy countries nor private individuals borrow from the World Bank, which lends only to creditworthy governments of developing nations. The poorer the country, the more favorable the conditions under which it can borrow from the Bank. Developing countries whose per capita gross national product (GNP) exceeds $1,305 may borrow from the IBRD. (Per capita GNP, a less formidable term than it sounds, is a measure of wealth, obtained by dividing the value of goods and services produced in a country during one year by the number of people in that country.) These loans carry an interest rate slightly above the market rate at which the Bank itself borrows and must generally be repaid within 12-15 years. The IDA, on the other hand, lends only to governments of very poor developing nations whose per capita GNP is below $1,305, and in practice IDA loans go to countries with annual per capita incomes below $865. IDA loans are interest free and have a maturity of 35 or 40 years. In Short, World Bank seeks to promote the economic development of the world's poorer countries assists developing countries through long-term financing of development projects and programs provides to the poorest developing countries whose per capita GNP is less than $865 a year special financial assistance through the International Development Association (IDA) encourages private enterprises in developing countries through its affiliate, the International Finance Corporation (IFC) acquires most of its financial resources by borrowing on the international bond market has an authorized capital of $184 billion, of which members pay in about 10 percent has a staff of 10,000 drawn from 186 member countries.

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World Bank Group

Five Agencies, One Group The World Bank Group consists of five closely associated institutions, all owned by member countries that carry ultimate decision-making power. As explained below, each institution plays a distinct role in the mission to fight poverty and improve living standards for people in the developing world. The term "World Bank Group" encompasses all five institutions. The term "World Bank" refers specifically to two of the five, IBRD and IDA. The International Bank for Reconstruction and Development Established 1944 | 187 Members Cumulative lending: $523.6 billion (effective fiscal 2005, includes guarantees) Fiscal 2010 lending: $44.2 billion for 164 new operations in 46 countries
IBRD aims to reduce poverty in middle-income and creditworthy poorer countries by promoting sustainable development through loans, guarantees, and (nonlending) analytical and advisory services. The income that IBRD has generated over the years has allowed it to fund several developmental activities and to ensure its financial strength, which enables it to borrow in capital markets at low cost and offer clients at good borrowing terms. IBRDs 24-member Board is made up of 5 appointed and 19 elected Executive Directors, who represent its 184 member countries.

The International Development Association Established 1960 | 170 Members Cumulative commitments: $221.2 billion (effective fiscal 2005, includes guarantees) Fiscal 2010 commitments: $14.5 billion for 190 new operations in 66 countries
Contributions to IDA enable the World Bank to provide approximately $6 billion to $9 billion a year in highly concessional financing to the worlds 81 poorest countries (home to 2.5 billion people). IDAs interest-free credits and grants are vital because these countries have little or no capacity to borrow on market terms. In most of these countries, the great majority of people live on less than $2 a day. IDAs resources help support country-led poverty reduction strategies in key policy areas, including raising productivity, providing accountable governance, improving the private investment climate, and improving access to education and health care for poor people.

The International Finance Corporation Established 1956 | 182 Members Committed portfolio: $38.7 billion (plus $8 billion in syndicated loans) Fiscal 2010 commitments: $12.7 billion committed and $5.4 billion mobilized for 528 projects in 104 countries
Page IFC promotes economic development through the private sector. Working with business partners, it invests in sustainable private enterprises in developing countries without accepting

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government guarantees. It provides equity, long-term loans, structured finance and risk management products, and advisory services to its clients. IFC seeks to reach businesses in regions and countries that have limited access to capital. It provides finance in markets deemed too risky by commercial investors in the absence of IFC participation and adds value to the projects it finances through its corporate governance, environmental, and social expertise.

The Multilateral Investment Guarantee Agency Established 1988 | 175 Members Cumulative guarantees issued: $22.4 billion Fiscal 2010 guarantees issued: $1.5 billion for 19 projects
MIGA helps promote foreign direct investment in developing countries by providing guarantees to investors against noncommercial risks, such as expropriation, currency inconvertibility and transfer restrictions, war and civil disturbance, and breach of contract. MIGAs capacity to serve as an objective intermediary and to influence the resolution of potential disputes enhances investors confidence that they will be protected against these risks. In addition, MIGA provides technical assistance and advisory services to help countries attract and retain foreign investment and to disseminate information on investment opportunities to the international business community.

ICSID The International Centre for Settlement of Investment Disputes Established 1966 | 144 Members Total cases registered: 319 Fiscal 2010 cases registered: 27
ICSID helps encourage foreign investment by providing international facilities for conciliation and arbitration of investment disputes, thereby helping foster an atmosphere of mutual confidence between states and foreign investors. Many international agreements concerning investment refer to ICSIDs arbitration facilities. ICSID also issues publications on dispute settlement and foreign investment law.

Fiscal Year 2010 Highlights

In fiscal 2010, the World Bank Group committed $ 72.9 billion, distributed in credits, loans, grants, and guarantees. In fiscal 2010, IBRD committed $44.2 billion for 164 new operations in 46 countries. IDA committed $14.5 billion for 190 new operations in 66 countries. In fiscal 2010, Financial and Private Sector Development was the World Banks top theme recipient, with $17.7 billion in new commitments, an increase of over 80 percent compared with the previous year.

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IBRD and IDA Lending by Region Fiscal 2010
Share of Total Lending of $58.7 Billion South Asia 19%

Africa 20%

Middle East and North Africa 6%

East Asia and Pacific 13%

Latin America and the Caribbean 24%

Europe and Central Asia 18%

SOUTH ASIA:
12,000 10,000 8,000 6,000 4,000 2,000

Total IBRD and IDA Lending Fiscal 200510 millions of dollars

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World Bank Main Projects in Pakistan
The World Bank, Pakistan is helping the Federal and Provincial Governments in implementing various reform programs aimed at encouraging growth, investment, and employment generation. Reforms at the provincial level are specifically aimed at improving delivery of social services like education, health, clean drinking water, and sanitation. These efforts have yielded impressive results in many areas: - Investing in Education The Bank supports government programs to improve access to education that focus explicitly on the achievement of results. Between 2004 and 2011, IDA extended over US$1.1 billion to support increased investment and reform in the education sector in the two largest provinces in Pakistan: Punjab and Sindh. These efforts, including reforms in teacher recruitment and payment of stipends for girls attendance, have started to translate into increased enrollment rates. For example, overall net primary school enrollment in Punjab increased from 45 percent in 2001 to 62 percent in 2008. Female primary enrollment went up from 43 percent to 60 percent. Similar enrollment results have been achieved in Sindh. Other achievements in Sindh include merit-based recruitment of around 13,000 teachers and 300 new private coeducational primary schools in underserved rural communities which are supported by public cash subsidies of US$46 per student per month conditional on free schooling and stipulated school quality standards. These schools have over 26,000 students and evidence suggests that the school participation rate has increased from 30 percent to 80 percent in these communities, and that gender disparity in school participation has been eliminated. - Responding to Natural Disasters Over the course of the monsoon season in July and August 2010, Pakistan experienced the worst floods in its history. The floods affected 78 districts and nearly 10 percent of Pakistans population over a vast geographical area. The Bank has provided strong support for floods recovery, consisting of $300 million in critical import financing, $20 million for highways rehabilitation, and $125 million to finance cash transfers to around 1.4 million flood affected families. The Bank also provided support to the Government of Pakistan when the earthquake hit Pakistan on October 8, 2005. The earthquake left 2.8 million homeless, and 570,000 houses damaged, with 90% requiring total replacement. The Bank provided $400 million for Earthquake Reconstruction out of which $220 million was for housing reconstruction. 96% (335,000 houses) of the 350,000 houses have been completed under Rural Housing and Reconstruction Program and have also been certified. - Protecting the Poorest In social protection, the Bank has helped the government in establishing the social safety net systems. The Benazir Income Support Program (BISP) is the countrys national safety net program and the Banks support focuses on increasing its targeting efficiency and strengthening its operation. This cash transfer program offers a monthly payment of Rs.

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1,000 to qualifying households. In 2011 it is expected to cover about 7 million households or about one quarter of Pakistans total population. - Operating in Conflict Areas The conflict in Khyber Pakhtunkhwa (KP) and the Federally Administered Tribal Areas (FATA) led to one of the worst security crises in Pakistans history, displacing millions of people and severely disrupting lives, livelihoods, and the provision of public services. The Bank is now administering the Multi-Donor Trust Fund (MDTF) for KP, FATA and Balochistan, which supports the implementation of a program for reconstruction and development aimed at facilitating the recovery from the impact of the armed conflict and reducing the potential for escalation or resumption. Ten donors have contributed a total of US $140 million for the MTDF. In 2011, the Bank provided an IDA credit of US$250 million supplemented by $35 million MDTF grant - to finance cash transfer to conflict-affected households in the KP and FATA. - Supporting Rural Livelihoods The Bank has supported Pakistan Poverty Alleviation Fund (PPAF) since 2000 and during this time, the program has facilitated the formation of 80,000 community organizations and provided 1.9 million micro-credit loans, 16,000 community infrastructure schemes, and training support for 232,000 people in enterprise development skills. The World Bank is also assisting the Government of Azad Jammu & Kashmir (AJK)* in implementing a program to restore vital economic and social infrastructure damaged and/or destroyed by the October 2005 earthquake by financing reconstruction of 201 primary schools, 35 other buildings including government offices, police stations, and vocational training institutes, and 24 rural roads. 190 sub projects including 24 rural roads and 166 buildings are complete. Work on 50 sites is above 80% completed, on 13 sites it is more than 60 % and on remaining seven sites it is about 50% complete. - Connecting the Poorest The Bank is working to address Pakistans vast urban and rural infrastructure deficits, often cited as the greatest constraint to sustained, rapid growth. Through its ongoing US$ 495.0 million Highways Rehabilitation Project, the Bank is helping Pakistan to improve its road network. Major achievements include: (a) road network in poor condition reduced from 49% to 39.5%; (b) network-level ride quality (measurement of how bumpy or smooth the road is) improved by 15%; (c) travel time between Karachi and Peshawar reduced from 47 hours to 42 hours; (d) fatalities on Grand Trunk Road decreased from 107 to 60 per km.

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Loans/Credits/Grants to Pakistan:
During the past five years, from Fiscal Year (FY) 2007 to March 2011 the Bank approved 35 operations totaling around US$5.0 billion (IDA $ 4395.27 million + IBRD $ 634.4 million) for Pakistan. Stringent implementation of the economic program will be critical to success, and timely responses of fiscal and monetary authorities to emerging risks will be essential to ensure it remains on track.

Lending by Volume in Millions of US Dollars - Pakistan

Lending by Volume in Number of Projects - Pakistan

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1. IBRD Projects in Pakistan:

i. Project Name : HIGHWAYS REHAB
Project Development Objectives: The Project Development Objective is the sustainable delivery of a productive and efficient national highway network, contributing to lower transportation costs. Lending Information/Disbursement Summary (USD millions, as of June 30, 2010) Loan/Credit/Grant Status IBRD-73760 Effective IBRD-73410 Effective IBRD-72120 Effective Amount Disbursed Undisbursed Cancellation 65.00 53.47 11.53 0.00 100.00 90.16 9.84 0.00 50.00 38.55 13.94 0.00

ii. Project Name : Punjab Municipal Services Improvement

Project Development Objectives: The objective of the Project is to improve the delivery and effectiveness of urban services in Punjab

iii. Project Name : Electricity Distribution and Transmission

Project Development Objectives: The project's development objectives are to: (i) strengthen the capacity of distribution and transmission networks to meet increasing demand for electricity; (ii) strengthen institutional capacity; and (iii) support other priority areas of power sector reform.

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2. IDA Projects in Pakistan:
i. Sindh Education Sector Project (SEP)
Overview The Sindh Education Sector Project (SEP) has proven to be an effective instrument to achieve results, improve governance and accountability in the education sector in Pakistan, and strengthen country systems for fiscal and fiduciary management as well as monitoring and evaluation systems. The project has focused the dialogue and the governments attention and efforts on the achievement of results. Today, the various interventions supported by the project directly affect the schooling conditions of 3.8 million students in the province of Sindh. Bank Contribution The International Development Association financially supported the design and implementation of the first year of the SERP, through the Sindh Education Sector Development Policy Credit (SEPDC), with US$100 million, approved by the Banks Board in June 2007. The SEP is a US$300 million Standard Investment Credit and was approved by the Banks Board in June 2009. The project is composed of two components. The first component provides US$294 million to finance key education sector budget line items (Eligible Expenditures). The second component is a Technical Assistance (TA) component of US$6 million to assist the government with program implementation and monitoring and evaluation. An Additional Financing (AF) project of US$50 million, following the design of the SEP, was approved by the Board in March 2011.

ii. Punjab Education Reforms: (Punjab Education Sector Project)

Overview The Punjab Education Sector Project (PESP) for Pakistan is supporting the Government of Punjabs education reforms, which since 2003 have aimed to improve access, quality, and governance in education Punjab is Pakistans largest province with a population of 100 million, which embodies 60 percent of the country's total population. Punjab has long contributed the most to Pakistans national economy; it is the most industrialized province and, because of widespread irrigation, features diverse agricultural productivity. However, in the countrys efforts to alleviate poverty, low educational attainment had long been a stumbling block. As recently as 2001, primary school enrollment was only 45 percent, where efforts to improve access and quality were yielding little fruit. IDAs US$350 million Punjab Education Sector Project was launched in 2008, and is financing about 15 percent of the provincial governments total education budget over a

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Bank Contribution:

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three-year period. It also contains a US$10 million component for providing technical assistance to support implementation of the Governments medium-term sector program. Under the earlier four IDA credits, a total of US$400 million was provided to support education reforms from 2004 through 2007. Continuous IDA support has provided a real continuity of policy dialogue with the provincial government.

iii. Rural Communities Push Back Poverty:

Pakistan has a population of over 162 million, with over 60 percent living in rural areas. Rising food prices, the energy crisis, and other inflationary pressures have not only pushed more people below the poverty line, but have increased vulnerability of the ultra-poor to an unprecedented level. The rising levels of ethnic and religious strife, conflict and insecurity, and recurring natural calamities have further limited the countrys capacity to deal effectively with persistent poverty. Bank Contribution: IDA provided a total of US$328 million for the first 2 PPAF projects. Additional funding of US$238 million was also provided for its earthquake reconstruction program. A further US$75 million of additional finance is supporting participatory development through social mobilization in over 50,000 villages. Through the PPAF III, IDA is providing an additional US$250 million.

3. IFC in Pakistan
Our Strategy: Pakistan is a priority country for IFC. For the past three years, IFCs investments and advisory services work have increased in Pakistan to promote private sector growth. Presently, the countrys economic expansion remains constrained by severe power shortages, weak transportation and logistics infrastructure, and limited access to finance for large segments of the population. IFCs strategy in Pakistan focuses on addressing these constraints by mobilizing investments in power and infrastructure, and providing access to finance to micro, small and medium enterprises (MSMEs) through financial intermediaries. a)IFC Investments: As of June 2011, IFC has committed almost $3.5 billion of its own funds in the country and has arranged about $610 million in syndications. During fiscal year 2011, IFC committed over $696 million, including $554 million in trade finance assistance to 11 banks. Last year, IFC:

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Committed $100 million to support capacity expansion of the Uch Power Station, an existing IFC client, through the construction of a standalone independent power plant, which will utilize the supply of indigenous gas in the Uch Gas Field;

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Provided Engro Fertilizers Limited with a $30 million subordinated loan to help mitigate the impact from the recent floods on their fertilizer business; Provided $1.9 million for the National Rural Support Program (NRSP) microfinance bank to support transformation of NRSPs microfinance loan portfolio into NRSP Microfinance Bank; and Supported to the tune of $10 the Qasim International Container Terminal, which operates a container terminal at Port Qasim, approximately 50 kilometers southeast of Karachi.

b)IFC Advisory Services: IFC Advisory Services is working to improve Pakistan's business environment in a number of different ways. Access to Finance The Credit Information Services program has been assisting DataCheck, the leading private credit bureau in Pakistan, to develop bureau scoring services. IFC and the Pakistan Banks Association are helping banks adopt sustainable banking principles, promoting access to finance for underserved populations and encouraging lending that is more socially and environmentally responsible. Investment Climate We are helping Develop alternative dispute resolution/mediation centers to provide support to SMEs. Sustainable Business Advisory IFC is working with Packages, an investment client, to improve wastepaper recovery in Lahore, Pakistan. This will allow more wastepaper to be recycled by Packages, generate income for local businesses, and help decrease GHG emissions. The Corporate Governance program is assisting the Pakistan Institute of Corporate Governance to develop training programs for the board members of private and public corporations. Infrastructure Following the recent flooding in Pakistan, IFC completed an advisory mandate to help the Punjab government explore opportunities for increasing the Lahore Water and Sewerage's delivery capabilities.

c)IFC Projects In Pakistan:

i. Doing Business in Pakistan 2010 project Overview The subnational Doing Business in Pakistan 2010 project benchmarked business regulations in 6 Doing Business areas across 13 cities and covered all provinces in Pakistan. It found a number of local level business reforms complementing nationwide effort, made reform recommendations and highlighted local best practices. The project results were delivered despite difficult security issues in many of the areas covered.

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Doing Business in Pakistan 2010 gave specific locations in Pakistan an opportunity to tell their story and compare their regulations with other cities in the same country and with over 180 locations around the globe. Local-level performances are becoming increasingly important in a globalized world, where specific locations, rather than countries, compete for investmentKarachi versus Shanghai, rather than Pakistan versus China Bank Contribution The project was funded by the United States Agency for International Development (USD 290,000), UK Department for International Development (USD 90,000) and the World Bank Group (USD 290,000). The Ministry of Finance and the Government of Punjab also dedicated resources and in-kind support to the project.
ii. IFC Supports Landmark Wind Power Project In Pakistan

International Finance Corporation (IFC), a member of the World Bank Group, is investing $38.1 million in Zorlu Enerji Pakistan Limited to build a landmark wind power project in Sindh Province, in the country that will increase the countrys renewable energy generation capacity.The 56.4MW Zorlu Pakistan wind project is the first internationally-financed wind power development in Pakistan, says a statement issued by the IFC here Thursday. The Asian Development Bank, ECO Trade and Development Bank and Habib Bank are also financing the US$159 million project.
iii. IFC Supports Hydro Plant in Pakistan, Boosting Supply of Clean Energy

IFC, a member of the World Bank Group, is providing a $60 million loan to Star Hydro Power Ltd. to support the construction of a private hydro-power project in Pakistan and increase the countrys supply of renewable energy. The 147 megawatt run-of-the-river power plant is the largest privately financed hydropower development in Pakistan. The Export-Import Bank of Korea, the Asian Development Bank and the Islamic Development Bank are also financing the $409 million project. Star Hydro Power is 80% owned by the Korea Water Resources Corporation and this project will help promote foreign direct investment in Pakistan, a country where only about 16 percent of hydro-power resources have been harnessed.
iv. Standard Chartered Bank and International Finance Corporation

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Standard Chartered Bank and International Finance Corporation launch Partnership to support the growth of Small and Medium Enterprises (SME) in Pakistan. Standard Chartered and International Finance Corporation (IFC), a member of the World Bank Group, signed an agreement in Davos, Switzerland, at the World Economic Forum to launch a pilot programme to support the training and growth of Small and Medium Enterprises (SME) in Pakistan. The pilot project will be launched in March 2009, in Lahore, Gujranwala, Sialkot and Faisalabad, targeting more than 100 entrepreneurs in these cities.

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v. International Finance Corporation & Habib Bank Limited joins hands for SME business development in Pakistan

The member of World Bank Group; International Finance Corporation has recently signed an agreement with Habib Bank Limited for the development and promotion of small sector business units in Pakistan through providing support and access to the finance. IFC has been helping HBL to develop its product HBL Business Faida specifically designed for small scale business entrepreneurs. HBL has launched this product on November 1, 2011 to provide small business entrepreneurs access to the financing facilities for the development of their business activities along with job creating opportunities. IFC has helped HBL to design Business Model of its SME segment. Habib Bank Limited has acknowledged and recognized the SME sector as one of the most growing sector of Pakistans economy. The Head of Retail and commercial lending of HBL, Mr. Mubashar Maqbool has quoted We at HBL are committed to support SME sector and aspire to be a leader in this market.

4. MIGA Projects in Pakistan:

i. Habib Metropolitan Bank Limited: This summary covers an investment by Habib Bank AG Zurich (HBZ) of Switzerland in its subsidiary, Habib Metropolitan Bank (HMB) in Pakistan. HBZ, an existing MIGA guarantee holder, has requested additional coverage for its investment in HMB and the consolidation of all guarantees previously issued by MIGA into one single contract. MIGAs proposed new coverage would be for 80 million Swiss Francs for a period of up to 20 years against the risks of transfer restriction and expropriation. HMB is one of the 10 largest banks in Pakistan. The bank was formed in 2006 as a result of a merger between the Pakistani branches of HBZ and Metropolitan Bank Limited, a local bank. HBZ currently holds 51 percent of the shares, with the remaining shares owned by local and foreign investors. MIGAs additional coverage to HBZ, as well as the denomination of MIGAs contract in Swiss Francs, will help HBZ meet its obligations to the Financial Markets Supervisory Authority (FINMA), the Swiss banking regulator. Project Name Habib Metropolitan Bank Limited Guarantee Holder Habib Bank AG Zurich Investor Country Switzerland Host Country Pakistan Sector Banking Gross Exposure ($million) 91.2 Fiscal Year 2011 Status Proposed Project Number 6115

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ii. Kashf Microfinance Banks Summaries of proposed guarantees are provided prior to Board consideration and final contract signing, and therefore are subject to change. Project briefs are disclosed after contract signing and do not reflect subsequent modifications (e.g., changes in guarantee amount). Project Name Kashf Microfinance Bank Guarantee Holder ShoreCap International Ltd. Triodos Custody, B.V. Stichting Triodos-Doen Investor Country Cayman Islands Netherlands Host Country Pakistan Sector Banking Gross Exposure ($million) 2.50 Fiscal Year 2008 Status Proposed Project Number 7470 Project Description This summary covers investments by ShoreCap International, Ltd. (SCI), Stichting Triodos-Doen (Triodos-Doen), and Triodos Custody, B.V., as custodian of Triodos Fair Share Fund (TFSF), in the Kashf Microfinance Bank (KMB) in Pakistan. The investors have applied for a MIGA guarantee of $2.5 million for a period of up to 10 years against the risks of transfer restriction, expropriation, and war and civil disturbance. SCI, Triodos-Doen, TFSF, another foreign sponsor, and the International Finance Corporation (IFC) will invest in KMB, a greenfield microfinance bank. KMB is being established in conjunction with the Kashf Foundation, a foundation which uses group lending to provide finance to the countrys poorest people. Kashf will transfer its individual lending portfolio (i.e., the upper end of microfinance in the local context) to KMB, as a base portfolio to the new bank. KMB aims to reach significant scale quickly by offering savings and deposit products, individual loans, and other value-added services to micro and small business owners, especially women. KMB intends to operate across Pakistan starting with branches in Punjab and Sindh, but expanding into Balochistan, Northwest Frontier Province, and Azad Jammu and Kashmir. Within five years, KMB expects to establish 100 branches and to have a loan portfolio of above $270 million equivalent to approximately 375,000 borrowers and over one million small depositors.

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5.ICSID and Pakistan :
a)Pending Cases:
1. Agility for Public Warehousing Company K.S.C. v. Islamic Republic of Pakistan (ICSID Case No. ARB/11/8) Subject Matter Customs clearance services Date Registered March 28, 2011 Date of Constitution of Tribunal September 08, Constituted: 2011 Composition of Tribunal L. Yves FORTIER President: (Canadian) Arbitrators: Charles N. BROWER (U.S.) Salim MOOLLAN (French) Status of Proceeding Pending (the Claimant files a request for provisional measures on December 9, 2011)

b)Concluded Cases:
1. Occidental of Pakistan, Inc. v. Islamic Republic of Pakistan

(ICSID Case No.

ARB/87/4) Subject Matter Petroleum concession Date Registered October 07, 1987 Date of Constitution of Tribunal May 06, Constituted: 1988 Composition of Tribunal President: Ian BROWNLIE (British) Anthony COLMAN Arbitrators: (British) Ashraf Ullah KHAN (British) Outcome of Proceeding Settlement agreed by the parties and proceeding discontinued at the request of the Claimant (Order taking note of the discontinuance issued by the Tribunal on January 27, 1989 pursuant to Arbitration Rule 44).

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2. SGS Socit Gnrale de Surveillance S.A. v. Islamic Republic of Pakistan (ICSID

Case No. ARB/01/13) Subject Matter Service agreement Date Registered November 21, 2001 Date of Constitution of Tribunal Constituted: April 25, 2002 August 09, Reconstituted: 2002 Composition of Tribunal Florentino P. FELICIANO President: (Philippine) Arbitrators: Andr J.E. FAURS (Belgian) J. Christopher THOMAS (Canadian) (1) J. Christopher THOMAS (Canadian) appointed following the resignation of Toby LANDAU (British) Outcome of Proceeding Settlement agreed by the parties and proceeding discontinued at their request (Order taking note of the discontinuance issued by the Tribunal on May 23, 2004 pursuant to Arbitration Rule 43(1)). 3. Impregilo S.p.A. v. Islamic Republic of Pakistan (ICSID Case No. ARB/02/2) Subject Matter Construction project Date Registered February 12, 2002 Outcome of Proceeding The Secretary-General issues an order taking note of the discontinuance of the proceeding pursuant to Arbitration Rule 44 on June 11, 2002. 4. Impregilo S.p.A. v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/3) Subject Matter Hydropower project Date Registered March 03, 2003 Composition of Tribunal President: Gilbert GUILLAUME (French) Bernardo M. CREMADES Arbitrators: (Spanish) Toby LANDAU (British) Outcome of Proceeding Settlement agreed by the parties and proceeding discontinued at the request of the Claimant (Order taking note of the discontinuance issued by the Tribunal pursuant to ICSID Arbitration Rule 44 on September 26, 2005). 5. Bayindir Insaat Turizm Ticaret Ve Sanayi A.S. v. Islamic Republic of Pakistan (ICSID Case No. ARB/03/29) Subject Matter Highway construction contract Date Registered December 01, 2003

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Date of Constitution of Tribunal June 15, 2004 Composition of Tribunal Gabrielle KAUFMANN-KOHLER President: (Swiss) Arbitrators: Franklin BERMAN (British) Karl-Heinz BCKSTIEGEL (German) Constituted: Outcome of Proceeding: Award rendered on August 27, 2009.

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