International Bank of Reconstruction and Development (IBRD)

Key takeaways
* The IBRD is a World Bank institution that provides finance and policy advice to support sustainable development and poverty reduction.
* It was created after World War II to help rebuild economies and has since broadened its mission to promote global economic growth.
* The IBRD focuses on middle‑income and creditworthy low‑income countries, providing loans, guarantees, and advisory services.
* It raises funds in international capital markets and benefits from a high credit rating, allowing it to offer favorable financing terms.
* The institution is owned by its member countries (currently 189); the United States is the largest shareholder.

What the IBRD is

The International Bank for Reconstruction and Development (IBRD) is a global development bank administered by the World Bank Group. Its mandate is to reduce poverty and promote sustainable development by providing financial products, technical assistance, and policy advice to help countries strengthen institutions, build infrastructure, and improve public services.

Origins and evolution

The IBRD was established in the aftermath of World War II to finance reconstruction and economic recovery. Over time its focus expanded from postwar rebuilding to supporting long‑term economic development and poverty reduction across a broader set of countries.

Who it serves

The IBRD primarily serves middle‑income countries and creditworthy low‑income countries. These nations often have significant growth potential and established infrastructure but still face substantial poverty, inequality, or institutional challenges. The World Bank updates income classification thresholds regularly.

Core services

The IBRD delivers a mix of financial and advisory support to governments:

• Financial products: investment loans, development policy loans, guarantees, and risk management tools.
• Advisory and knowledge services: policy advice, capacity building, and technical assistance for national and municipal governments.
• Project support: design and implementation assistance throughout project cycles.
• Public financial management: advice on debt, asset management, and public sector reforms to strengthen fiscal sustainability.

How it finances operations

The IBRD raises funds by borrowing in international capital markets. Its strong creditworthiness allows it to access low‑cost financing, which it relends to client countries on favorable terms. Revenue comes from interest margins and investment income; part of its earnings have historically supported concessional lending through other World Bank institutions.

Example project

Peru — Sierra Irrigation Subsector
* Objective: reduce rural poverty and boost agricultural productivity in the Peruvian Sierra.
* Support: a loan (about $20 million) plus advisory and technical assistance to modernize irrigation systems, improve water management, and formalize water rights.
* Outcome: expanded irrigation capacity, improved crop yields, and increased adoption of higher‑value crops by farmers.

Governance and membership

The IBRD is owned by its member countries, each holding shares and voting power. Membership provides collective ownership and governance; shareholder decisions guide strategy and policies. The United States is the largest single shareholder by voting share.

How the IBRD differs from other World Bank institutions

• IBRD focuses on middle‑income and creditworthy low‑income countries and finances operations by borrowing from capital markets.
• The International Development Association (IDA), by contrast, provides concessional (low‑ or no‑interest) financing and grants to the poorest countries.

Bottom line

The IBRD is a central instrument of the World Bank Group for promoting sustainable development in countries that are beyond the poorest but still face major development challenges. By combining finance, technical assistance, and policy advice, the IBRD helps governments invest in infrastructure, strengthen institutions, and manage public finances to support inclusive and resilient growth.