In order to help some of the world’s poorest countries, the World Bank said Thursday that it has raised nearly $24 billion. This money can be used to create a record $100 billion in overall spending power.
According to a World Bank spokesperson who spoke to AFP, donor nations pledged $23.7 billion to restock the bank’s concessional lending division, the International Development Association (IDA). This represents a modest increase over the approximately $23.5 billion that donor nations had pledged in the previous fundraising round three years prior.
Leveraging the amount raised by almost four times, the Bank can utilise this money to borrow on financial markets, enabling it to unleash approximately $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 statement read, referring to the current IDA funding round.
“It is the result of our work to become a more faster, simpler, and more effective institution,” it added.
Following two days of negotiations in Seoul, the capital of South Korea, which is still in shock after President Yoon Suk Yeol imposed martial law late Tuesday local time before reversing his decision in response to pressure from lawmakers, the World Bank made its announcement.
IDA mainly provides grants to support the world’s 78 poorest countries, covering everything from the economic impact of the Covid-19 pandemic to climate change adaptation.
It is the single largest source of concessional, or below-market, finance for these countries, with around three-quarters of all IDA funding going to support countries in Africa, the World Bank said in a statement announcing the decision.
IDA replenishment is a crucial part of the World 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 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.
35 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.
