World Bank Earmarks $100 Billion in Assistance for World’s Poorest Countries

The World Bank has secured a historic $24 billion in loans and grants to assist 78 of the world’s poorest countries, with these contributions expected to generate an unprecedented $100 billion in total financing.

The funds, provided by donor nations, are part of the 21st replenishment of the International Development Association (IDA), the Bank’s concessional lending arm. This year’s commitment represents a modest increase from the $23.5 billion pledged in the previous fundraising cycle, held three years ago.

World Bank Group’s President, Ajay Banga on Thursday, December 5, 2024, expressed confidence that the new funding will provide vital resources to help vulnerable countries address pressing challenges, such as rising debt levels, economic instability, and the impacts of climate change.

He emphasized that the $24 billion will be used strategically to promote development in 78 countries that are in greatest need, with a focus on sectors like health, education, infrastructure, and climate resilience.

“Today, we are proud to announce the results of that effort. After months of negotiation, partnership, and unwavering commitment from our donor community, the 21st replenishment of the International Development Association (IDA) has raised $24 billion in donor contributions.

“Thanks to IDA’s unique leveraging model, this $24 billion will generate a total of $100 billion in affordable financing—the largest replenishment in IDA’s history. This is made possible because of donor generosity but also the work we have done to better optimize our balance sheet, take on more risk, and increase our leverage capacity. This marks the largest replenishment in IDA’s history,” he stated.

Banga noted that the impact of this replenishment goes beyond the financial resources provided. He explained that IDA has worked with its partners to simplify its operational framework, cutting the number of required metrics from 1,100 to 500, thus reducing bureaucratic obstacles. This streamlined process will ensure that resources are delivered more quickly and effectively to the countries that need them most.

Over the last 60 years, IDA has played a crucial role in supporting the world’s poorest nations, providing affordable financing through low-interest loans and grants. This model has allowed IDA to mobilize and deploy $270 billion over the past decade, with $179 billion directed to Africa. Additionally, IDA has become the largest provider of concessional climate financing, investing $85 billion globally in the past 10 years.

The funds from this replenishment will continue to yield tangible results. Over 900 million people have received health services, 117 million people have gained access to reliable electricity, and 94 million people now have access to clean water, thanks to previous IDA investments.

However, the World Bank recognizes that challenges remain, particularly as 1.2 billion young people enter the workforce, with projections showing that only 420 million jobs will be created. IDA aims to not only provide funding but also catalyze job creation through investments in infrastructure, education, and private sector development.