In March, the Biden Administration released its budget request for Fiscal Year 2025 (FY25), and on June 12th, the House Appropriations Committee approved its FY25 State, Foreign Operations, and Related Programs (SFOPs) bill. While the Biden Administration's budget request meets existing commitments to the MDBs, the House bill fails to meet many MDB commitments and includes harmful climate provisions that would weaken the U.S.’s ability to push for better environmental impacts at the MDBs. Though the upcoming election means that appropriations negotiations may be even more difficult than last year’s contentious process, Congress should meet the existing commitments to the MDBs and exclude provisions that would lead the U.S. to renege on its climate commitments. Furthermore, Congress must push for stronger social, environmental, and accountability policies as conditions for potential Congressional support of general capital increases (GCIs) at the Inter-American Investment Corporation (IDB-Invest) and the European Bank for Reconstruction and Development (EBRD).
MDB commitments in the FY25 President’s Budget Request (PBR)
The FY25 PBR for the Treasury Department includes $1.93 billion for existing commitments to the World Bank and the regional multilateral development banks (MDBs). We call on Congress to appropriate the funding needed to meet U.S. commitments to the MDBs, including:
BIC encourages Capitol Hill to meet these existing commitments to preserve the US’s leadership role and ability to improve these institutions’ policies and practices.
GCI Authorization Requests in the FY25 PBR
The FY25 PBR also includes requests for authorization and contributions for two GCIs. GCIs inject new shareholder capital into the MDBs so the institutions can increase the volume of their lending. The request calls for a $75 million contribution and authorization of a $3.5 billion GCI for IDB-Invest, the private sector lending arm of the Inter-American Development Bank (IDB). The GCI, approved by shareholders in March 2024, comes as the IDB implements its New Institutional Strategy, a series of reforms intended to increase the IDB’s overall impact. The request also calls for a $50 million contribution and authorization of a €4 billion GCI for the EBRD. This GCI, approved by shareholders in December 2023, comes as the EBRD revises its Environmental and Social Policy and Access to Information Policy. As these institutions engage in reforms and policy reviews, we call for Congress to push for stronger accountability and transparency standards if they authorize these capital increases.
MDB provisions in the House FY25 SFOPs bill
In June, the House Appropriations Committee approved its SFOPs appropriations bill, which contains $1.55 billion for existing commitments to the World Bank and the regional MDBs. The bill includes climate provisions that would weaken the U.S.’s ability to meet its climate commitments and excludes MDB oversight provisions that inform how the Treasury must engage with the MDBs. Below are some of the key provisions and gaps within the House’s FY25 SFOPs bill:
