The World Bank has announced that it has raised $23.7 billion to replenish its concessional lending arm, the International Development Association (IDA). This funding, secured through commitments from donor nations, will allow the World Bank to leverage the amount raised to unlock a record $100 billion in total spending power, surpassing the $93 billion achieved during the last fundraising round in 2021.
According to a spokesperson, the $23.7 billion pledged by donor countries represents a slight increase from the $23.5 billion committed three years ago. By borrowing on financial markets, the World Bank can amplify this funding approximately fourfold, creating a substantial pool of resources for loans and grants aimed at the world’s poorest nations.
In a statement, the World Bank described the success of the IDA21 replenishment as a historic milestone and an endorsement of its efforts by donors and client countries. The bank indicated that the funds will be directed toward 78 of the world’s most vulnerable nations to support investments in health, education, infrastructure, and climate resilience. World Bank President Ajay Banga noted that these resources will also play a critical role in stabilizing economies and creating jobs.
The announcement followed two days of discussions in Seoul, South Korea. The IDA has been a pivotal source of concessional financing, particularly for climate-related initiatives. Over the past decade, approximately two-thirds of IDA funding has been allocated to African nations.
Key Contributions from Donor Nations
The replenishment of the IDA occurs every three years and relies on substantial contributions from nations such as the United States, Japan, and European countries, including the United Kingdom, Germany, and France. This year, the U.S. committed a record $4 billion in funding, with other nations, such as Norway and Spain, also increasing their contributions.
The World Bank noted that 35 former IDA recipients, including China, Turkey, and South Korea, have graduated from developing economy status in recent decades. Many of these countries now contribute to the fund, reflecting their economic progress.
The IDA has become the largest single source of concessional climate finance globally, underscoring its critical role in supporting sustainable development and addressing the challenges faced by the most impoverished nations.
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