The World Bank announced a record level of contributions to its International Development Association (IDA), designed to benefit the world’s poorest countries.
Governments have pledged US$75 billion for replenishing IDA funds over a three-year period.
15 December 2016: The World Bank announced a record level of contributions to its International Development Association (IDA), designed to benefit the world’s poorest countries. Governments have pledged US$75 billion for replenishing IDA funds over a three-year period.
The agreement was reached at a meeting on IDA’s 18th replenishment convening in Yogyakarta, Indonesia, on 15 December 2016, with the participation of more than 60 donor and borrower governments. World Bank Group President Jim Yong Kim welcomed the agreement as “a pivotal step” in ending extreme poverty. He said the commitments will serve to “crowd in the private sector” and help the world’s poorest countries raise additional funding from capital markets.
World Bank Group President Jim Yong Kim welcomed the agreement as “a pivotal step” in ending extreme poverty.
Kyle Peters, World Bank Group, and Dede Ekoue, former Minister of Development, Togo, welcomed the final agreed package. Peters said the financing will contribute to global stability and progress through action on climate change, resilience and gender equality.
A World Bank press release notes that the funding is expected to support work in: health and nutrition services; improved water sources; safe childbirth; financial services; teacher training; child immunizations; improved statistical capacity in government services; and renewable energy. The package includes financing of more than US$14 billion for tackling fragility, conflict and violence, and US$2 billion for refugees and host communities.
The IDA will blend donor contributions with internal resources and funds raised through debt markets, potentially generating US$3 for every US$1 contributed by donors. A World Bank press release referred to this approach as a “radical transformation” for the Group, highlighting its creation of a US$2.5 billion Private Sector Window (PSW) together with the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) that will help mobilize private capital in poor and fragile nations.
Axel van Trotsenburg, World Bank, highlighted the package as a step towards fulfilling the Addis Ababa Action Agenda (AAAA), the outcome document of the Third International Conference on Financing for Development (FfD) in July 2015, and said it will be critical to achieving the Sustainable Development Goals (SDGs).
Established in 1960, the IDA provides grants and low or no-interest loans to help boost economic growth, reduce poverty and improve the lives of some of the world’s poorest people. Forty-eight countries so far are contributing to the IDA 18 replenishment, which is expected to benefit up to 75 countries. [World Bank Press Release] [IDA 18 Replenishment Webpage] [IDA Website]