The World Bank has announced a $93 billion replenishment package of the International Development Association (IDA) to help low-income countries respond to the COVID-19 crisis and build a greener, more resilient, and inclusive future.
The financial support brings together $23.5 billion of contributions from 48 high and middle-income countries with financing raised in the capital markets, repayments, and the World Bank’s own contributions.
The financing package, agreed over a two-day meeting hosted virtually by Japan, is the largest ever mobilized in IDA’s 61-year history. IDA’s unique leveraging model enables it to achieve greater value from donor resources – every $1 that donors contribute to IDA is now leveraged into almost $4 of financial support for the poorest countries.
Commenting on the financial support by the bank, World Bank Group President, David Malpass, said: “Today’s generous commitment by our partners is a critical step toward supporting poor countries in their efforts to recover from the COVID-19 crisis.
“We are grateful for the confidence our partners have in IDA as a non-fragmented and efficient platform to tackle development challenges and improve the lives of millions of people around the world”, the development banker added.
According to the Breton Woods institution, the funds will be delivered to the world’s 74 poorest countries under the 20th replenishment (IDA20) programme, which focuses on helping countries recover from the impacts of the COVID-19 crisis.
It stated that in these countries, the ongoing pandemic was worsening poverty, undermining growth, and jeopardizing the prospects of a resilient and inclusive development. Countries are struggling with falling government revenues; increasing debt vulnerabilities; rising risks to fragility, conflict, and instability; and dropping literacy rates.
Noting further that about a third of IDA countries are facing a looming food crisis, the Bank stated that the funding was aimed at helping countries build back greener, a substantial portion of these funds go to tackling climate change, with a focus on helping countries to adapt to rising climate impacts and preserve biodiversity.
This is even as it assured that IDA would also deepen support to countries to better prepare for future crises, including pandemics, financial shocks, and natural hazards. While IDA20 will support countries globally, resources are increasingly benefiting Africa, which will receive about 70 percent of the funding.
With this strong package, IDA will be able to scale up its support in the pandemic and address health challenges, helping 400 million people receive essential health and nutrition resources. The social safety nets programme is also expected to reach as many as 375 million people.
According to the Washington D.C-based development finance institution, the IDA20 programme has more ambitious policy commitments that will support countries in prioritizing investments in human capital, covering issues such as education, health and nutrition, vaccines, safety nets, and support for people with disabilities.
In addition, the World Bank maintained that IDA would also increase its ambition in addressing other major development challenges such as gender inequality, job creation, and situations of fragility, conflict and violence, including in the Sahel, the Lake Chad region, and the Horn of Africa, adding that a continued emphasis on governance and institutions, debt sustainability, and digital infrastructure interventions will help foster economic and social inclusion.
Due to the urgent development needs of IDA countries, the replenishment was advanced by one year. IDA20 will cover the period of July 1, 2022, to June 30, 2025. The IDA20 policy architecture builds on the strong foundation of IDA19, with enhancements to make IDA20 even more ambitious and fit for today’s challenges.
IDA19 achievements key to IDA20 include, strong COVID-19 response with nearly 70 countries benefiting from IDA financing for vaccines, health professionals’ training, and hospital equipment; over 60 percent of climate financing, in fiscal year 2021 alone, focused on adaptation and resilience; IDA helped 62 countries institutionalize disaster risk reduction plans; and greater debt transparency through the Sustainable Development Finance Policy introduced in IDA19, with 19 countries publishing annual and timely debt reports in fiscal year 2021.
Available figures indicated that since the start of the COVID-19 pandemic, the World Bank Group, had committed over $157 billion to fight the health, economic, and social impacts of the pandemic, the fastest and largest crisis response in its history.
The financing is helping more than 100 countries strengthen pandemic preparedness, protect the poor and jobs, and jump start a climate-friendly recovery. The Bank is also supporting over 50 low-and middle-income countries more than half of which are in Africa, with the purchase and deployment of COVID-19 vaccines, and is making available $20 billion in financing for this purpose until the end of 2022.
The World Bank’s International Development Association (IDA), was established in 1960, to help the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives.
IDA is one of the largest sources of assistance for the world’s 74 poorest countries, 39 of which are in Africa. The rest are in other regions: 14 in East Asia; 6 in South Asia; 4 in Europe and Central Asia; 8 in Latin America and Caribbean; and 3 in Middle East and North Africa.
Resources from IDA bring positive change to the 1.3 billion people who live in IDA countries. Since 1960, IDA has provided $458 billion to 114 countries. Annual commitments have averaged about $29 billion over the last three years (FY19-FY21), with about 70 percent going to Africa.
