The U.S. International Financial Institutions (IFI) Act directs the U.S. government (USG) to strengthen the environmental and social (E&S) performance of each multilateral development bank (MDB) in which the United States is a shareholder. The U.S.Agency for International Development (USAID) has led reviews of MDB projects with significant environmental and social risks and reported semi-annually to Congress on such reviews since the late 1980s. This report covers the period from November 2021 through April 2022.
As described in USAID’s December 2021 report to Congress, USAID is iteratively designing and incrementally implementing a new, field-focused process for USAID reviews of proposed MDB-financed projects with high E&S risks that aims to be more effective and efficient.
USAID is closely coordinating with the U.S. Department of the Treasury (Treasury), the U.S. Department of State (State), and the U.S. Environmental Protection Agency (EPA).
Consistent with its mandate,Treasury continues to lead interagency reviews of all proposed MDB-financed projects in the weeks and months prior to the MDB Board vote to evaluate whether the project design appropriately addresses risks, among other issues, and to determine whether the United States will support the project.
The new, USAID-led process for MDB projects with high E&S risks complements the Treasury-led interagency reviews by prioritizing a subset of all high E&S risk projects (that are of particular interest or concern to USAID,Treasury, State and/or EPA) and then enabling project review and engagement with MDB staff well in advance of an MDB Board vote to improve E&S dimensions of project design.
This report includes a process overview, intermediate outputs, and next steps for USAID’s new, field focused review process. USAID continues to welcome the opportunity to brief Congress on this approach.