Title XIII of the International Financial Institutions (IFI) Act of 1977, as amended, 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.
Toward this end, the United States Agency for International Development (USAID) identifies MDB projects likely to have adverse environmental and social impacts (i.e., Category A or high risk projects) and reports on them in semi-annual congressional reports pursuant to Section 1303(c) of Title XIII. This report covers the period from January through June 2023.
USAID also leads an interagency process to prioritize high risk MDB projects. This process complements Treasury-led interagency reviews of all MDB projects by enabling targeted project review and engagement with MDB staff well in advance of an MDB Board vote (4 to 24 months prior) to improve E&S dimensions of project design.
Prioritization is implemented by USAID Pillar and Regional Bureaus as well as relevant Missions, the U.S. Department of the Treasury (Treasury), the U.S. Department of State (State), the U.S. Environmental Protection Agency (EPA), and, as of this report, the U.S. Department of Labor (DoL).
During prioritization, high risk projects are ranked1 as high, medium, or low priority for early engagement with MDB staff based on three main criteria: i) whether the project poses particularly high E&S risks; ii) whether the project affects USG priorities or equities; and iii) whether the USG has an opportunity to influence the project design. Each main criterion has a number of sub-criteria that relate to impact assessment practice standards or USG or international datasets.
Following prioritization, USAID will conduct a pre-approval field review of a high priority project. Treasury leads early interagency desk reviews of all high priority and medium priority projects soon after the projects’ key E&S documents are disclosed. Consistent with its mandate, Treasury will also lead interagency desk reviews of all projects (regardless of E&S risk category or priority) soon after the projects’ financing documents are released, which is typically 14 to 21 days prior to appraisal. The purpose of these pre-Board reviews is to evaluate whether the project design appropriately addresses risks, among other issues, and to determine whether the United States will vote in support of the project.
