In a historic move to combat global challenges, donor countries have pledged a record-breaking $100 billion over the next three years to the World Bank’s International Development Association (IDA), which supports the world’s poorest nations. The announcement came during a pledging conference in Seoul on Friday.
This funding surge surpasses the previous $93 billion commitment made in 2021, signaling a strengthened global effort to address issues such as mounting debts, climate disasters, inflation, and conflict in low-income countries.
The IDA, which provides grants and low-interest loans to 78 low-income nations, will receive approximately $24 billion in direct contributions from donor countries. The fund will leverage this amount by issuing bonds and employing financial mechanisms to meet the $100 billion target, ensuring grants and loans are available through mid-2028.
World Bank President Ajay Banga highlighted the critical importance of the funding. “This funding will be deployed to support the 78 countries that need it most,” Banga said in a statement. “It will provide resources to invest in health, education, infrastructure, and climate resilience, while also stabilizing economies and creating jobs.”
The IDA replenishment, conducted every three years, is integral to the World Bank’s operations. Major contributors include the United States, Japan, the United Kingdom, Germany, France, and several European nations.
This year, the United States pledged a record $4 billion in new funding, emphasizing its commitment to supporting low-income nations. Other nations, including Norway and Spain, also significantly increased their contributions.
The funds are expected to address pressing issues across eligible countries, providing essential resources to bolster healthcare systems, expand educational access, build resilient infrastructure, and mitigate the impacts of climate change.
The IDA serves as a financial lifeline for nations grappling with severe economic instability and humanitarian crises. Its ability to issue bonds and use financial leverage effectively amplifies the impact of donor contributions, allowing for more comprehensive and sustained support.
This landmark funding commitment reflects a growing recognition of the interconnectedness of global challenges. With inflation, climate change, and geopolitical tensions continuing to strain low-income nations, the replenished IDA fund aims to mitigate risks and foster sustainable development in the world’s most vulnerable regions.
As these resources are deployed, the focus will remain on fostering resilience, creating opportunities, and stabilizing economies, ensuring a brighter future for millions living in the most disadvantaged parts of the world.
