The World Bank announced it has raised about $24 billion to provide loans and grants for some of the world’s poorest nations that it can leverage to generate a record $100 billion in total spending power.
Known as the International Development Association (IDA), donor countries committed $23.7 billion to replenish the bank’s concessional lending arm, a World Bank spokesperson told AFP, marking a slight increase from the roughly $23.5 billion pledged during the last fundraising round three years ago.
The bank can use the money to borrow on financial markets, allowing it to leverage the amount raised by around four times, unlocking around $100 billion in new loans and grants, up from $93 billion in 2021.
A World Bank statement read, referring to the current IDA funding round that they believed the historic success of this IDA21 replenishment was a vote of confidence and support from donors and clients.
The World Bank President Ajay Banga said in a separate statement that the funding would be deployed to support the 78 countries that need it most, referring to the developing countries that are eligible for IDA support.
He said, “It will help provide resources to invest in health, education, infrastructure, and climate resilience, as well as helping to stabilize economies and create jobs.”
The World Bank’s announcement, according to the statement, followed two days of talks in the South Korean capital, Seoul, a city still reeling after President Yoon Suk Yeol declared martial law late on Tuesday local time, before backtracking under pressure from lawmakers.
The International Development Association (IDA), has become the single largest source of concessional, or below-market, climate finance, and around two-thirds of all IDA funding over the past decade has gone to support countries in Africa, according to the World Bank.
It’s replenishment is a crucial part of the bank’s operations, and happens once every three years, with much of the funding coming from the United States, Japan and several European countries, including the United Kingdom, Germany and France.
This year, the statement explained that the United States announced ahead of time that it would commit a record $4 billion in new funding to the IDA, while other countries, including Norway and Spain, also significantly stepped up their financial support.
Thirty-five former recipients of IDA assistance have graduated from developing economy status in recent decades, including China, Turkey and South Korea, with many of them now donors to the fund.