World Bank secures record $100bln to aid world's poorest nations

By Al Mayadeen English
Source: Agencies
6 Dec 2024 07:38

World Bank President Ajay Banga says the funding will be deployed to support the 78 countries that need it the most.

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Delegates arrive at the Development Committee Plenary during the World Bank/IMF Spring Meetings at the World Bank headquarters in Washington, Friday, April 19, 2024. (AP)

The World Bank announced on Thursday that it had secured nearly $24 billion to provide loans and grants to some of the world's poorest nations, which it plans to leverage to generate a record $100 billion in total spending capacity.

Donor nations pledged $23.7 billion to replenish the International Development Association (IDA), the bank's concessional lending arm, a spokesperson for the World Bank told AFP.

This figure marks a slight increase from the approximately $23.5 billion pledged during the previous fundraising round three years ago.

The World Bank intends to use these contributions to access financial markets, enabling it to amplify the amount raised by roughly four times and unlock approximately $100 billion in new loans and grants, an increase 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 bank said in a statement, referring to the latest IDA funding round.

World Bank President Ajay Banga, in a separate statement, highlighted that "this funding will be deployed to support the 78 countries that need it most."

He emphasized that the resources would be directed toward investments in health, education, infrastructure, and climate resilience, as well as supporting economic stabilization and job creation.

The announcement follows two days of discussions in Seoul, South Korea, a city still grappling with political turmoil after President Yoon Suk Yeol declared martial law late Tuesday, only to reverse the decision under pressure from lawmakers.

According to the World Bank, IDA has become the largest source of concessional, or below-market, climate financing, with around two-thirds of its funding over the past decade directed to African nations.

IDA replenishment, which occurs every three years, is a cornerstone of the Bank's operations. Much of the funding is contributed by the United States, Japan, and several European nations, including the United Kingdom, Germany, and France.

This year, the United States pre-announced a record $4 billion commitment to the IDA, while countries such as Norway and Spain also significantly increased their contributions.

Over the past few decades, 35 former recipients of IDA assistance, including China, Turkiye, and South Korea, have graduated from developing economy status and now serve as donors to the fund.