Historic $100-bn boost for International Development Association

 

In a groundbreaking announcement on Friday, the World Bank Group unveiled a record $100-billion replenishment of the International Development Association (IDA), marking a pivotal moment for global development. 

 

The unprecedented financing accompanies the introduction of a more streamlined and responsive IDA, with a reduction of policy commitments and metrics by half, empowering client countries to prioritise their developmental needs more effectively.

 

This announcement brings to a close a year-long replenishment effort, World Bank president Ajay Banga said in an open letter to donors, stakeholders, and partners.

 

 

"Over the past year, we have navigated an incredibly challenging global landscape... Yet, amid these challenges, we have witnessed a remarkable collective effort to improve the lives of the world’s most vulnerable," Banga said. 

 

 

The 21st replenishment, which netted $24 billion in donor contributions, would dramatically enhance IDA's impact, he said.

 

 

Thanks to IDA's unique leveraging model, this funding will generate a total of $100 billion in affordable financing, the largest replenishment in IDA’s history, World Bank said. 

 

The amount will be deployed in 78 countries that need it most, focusing on key areas such as health, education, infrastructure, and climate resilience.

 

 

 

 

The replenishment not only targets financial resources but also aims to enhance operational efficiency by halving the required metrics from over 1,100 to 500, thereby reducing bureaucratic hurdles and improving response times, Banga said.

 

Over its 60 years, the IDA has proved its worth as a crucial partner for some of the world's poorest nations, providing zero- and low-interest loans and granting access to vital development knowledge.

 

 

This funding comes at a critical juncture, as it aims to combat rising unemployment among the world’s youth, particularly with 1.2 billion young people poised to enter the workforce. With projections suggesting only 420 million jobs will be created, IDA's role as a job creation catalyst has never been more vital.

 

“Together, we have proven that collective action can achieve extraordinary results. But the work is far from over,” Banga said.