The World Bank has announced that it has raised approximately $24 billion to provide loans and grants to some of the world’s poorest nations.
This amount can be leveraged to generate a record $100 billion in total spending power.
Known as the International Development Association (IDA), donor countries have committed $23.7 billion to replenish the bank’s concessional lending arm. This marks a slight increase from the roughly $23.5 billion pledged during the previous fundraising round three years ago.
The bank can use the funds to borrow on financial markets, allowing it to leverage the amount raised by about four times. This will unlock around $100 billion in new loans and grants, up from $93 billion in 2021.
In a statement, the World Bank referred to the current IDA funding round as a historic success, indicating strong confidence and support from donors and clients.
World Bank President Ajay Banga stated that the funding will be deployed to support the 78 countries that need it most, focusing on investments in health, education, infrastructure, and climate resilience, as well as stabilizing economies and creating jobs.
This announcement followed two days of talks in the South Korean capital, Seoul. The IDA has become the largest source of concessional, or below-market, climate finance. Around two-thirds of all IDA funding over the past decade has supported countries in Africa.
The replenishment of IDA funds occurs every three years, with significant contributions from the United States, Japan, and several European countries, including the United Kingdom, Germany, and France. This year, the United States committed a record $4 billion in new funding to the IDA, while other countries, including Norway and Spain, also increased their financial support.
In recent decades, 35 former recipients of IDA assistance have graduated from developing economy status, including China, Turkey, and South Korea. Many of these countries are now donors to the fund.
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