The World Bank announced on Thursday that it has secured nearly $24 billion in donor commitments to replenish its concessional lending arm, the International Development Association.
This funding will enable the Bank to generate a record $100 billion in total spending capacity through loans and grants aimed at assisting the world’s poorest countries.
According to a World Bank spokesperson, donor countries pledged $23.7 billion to the IDA in this latest fundraising round, marking a slight increase from the $23.5 billion raised three years ago. The Bank will leverage these funds on financial markets, multiplying the amount by approximately four times, resulting in $100 billion in new loans and grants, up from $93 billion in 2021.
“We believe the historic success of this IDA21 replenishment is a vote of confidence and support from donors and clients,” the World Bank said in a statement, referencing the current funding cycle.
Focused Support for Developing Nations
World Bank President Ajay Banga emphasized the importance of the replenished funds, stating, “This funding will be deployed to support the 78 countries that need it most.” These resources will be directed toward vital areas such as health, education, infrastructure, and climate resilience. Additionally, Banga noted that the funds would play a significant role in stabilizing economies and creating job opportunities in these nations.
IDA’s Role in Climate and Economic Development
The IDA is the largest source of concessional climate financing globally, with two-thirds of its funding over the past decade directed to African countries. The replenishment process occurs every three years and relies heavily on contributions from the United States, Japan, and several European nations, including the United Kingdom, Germany, and France.
This year, the United States committed a record $4 billion in new funding to the IDA, with other nations such as Norway and Spain significantly increasing their contributions. This collective effort highlights the global importance of supporting developing economies in addressing critical challenges.
Former Beneficiaries Now Donors
Over the past few decades, 35 countries that once relied on IDA assistance have transitioned out of developing economy status. Former beneficiaries such as China, Turkey, and South Korea are now contributors to the fund, showcasing the IDA’s impact in fostering long-term economic growth and development.
The announcement follows two days of discussions held in Seoul, South Korea, which has faced political turbulence in recent days. President Yoon Suk Yeol declared martial law late on Tuesday, only to retract the decision under pressure from lawmakers. Despite this backdrop, the talks underscored the World Bank’s commitment to addressing pressing global development needs.
