International Bank for Reconstruction and Development (IBRD) Articles of Agreement
- Type: Convention
- Date of signature: 22/07/1944
- Place of signature: Bretton Woods, USA
- Depositary: Government of the United States
- Date of entry into force: 27/12/1945
What is it about?
IBRD Articles of Agreement established the International Bank for Reconstruction and Development, commonly known as the World Bank. IBRD is not a “bank” in the common sense. It is an International Organization – one of the United Nations’ specialized agencies – that pursues the goal of fighting poverty. The Bank provides loans at preferential rates and grants to countries that face serious economic problems. IBRD is one of the highest rated borrowers in international markets, and is able to borrow at relatively low interest rates. In addition, some 40 rich countries provide money for this funding by making contributions every four years.
Why is it relevant?
IBRD provides member countries with low-interest loans, grants, interest-free credit and technical assistance. These funds are used in several areas, such as health and education, agriculture, poverty reduction programs, environment, infrastructure projects, etc… The world’s low-income countries – generally able to borrow money in international markets only at high interest rates – receive grants and interest-free loans from the International Development Association (IDA), which along with IBRD, forms the World Bank. Higher-income developing countries benefit from low-interest loans. IBRD also provides advice and assistance to developing countries on several aspects of economic development.
In 1995, IBRD adopted “the Guidelines: Procurement under IBRD Loans and IDA Credits” (they have been updated in 1999 and 2004). The Loan Agreement governs the legal relations between the Borrower and the Bank. Its provisions, which concern international bids as well as other financing instruments (national competitive bidding, shopping, direct contracting, procurement) aim to ensure that any money borrowed from the Bank is directed towards the purpose for which it was intended. The acceptance of these directives is essential for States which desire to borrow from IBRD.