Donor countries have pledged a historic $100 billion to the World Bank’s International Development Association (IDA), a lifeline for 78 low-income countries facing mounting debt, climate disasters, inflation, and conflict. The announcement was made at a two-day pledging conference in Seoul, marking the largest replenishment in IDA’s history and surpassing the $93 billion raised in 2021.
The $100 billion target includes $24 billion in direct contributions from donor nations, slightly up from the $23.5 billion pledged in 2021. The IDA plans to amplify this amount by leveraging bonds and other financial mechanisms to extend grants and very low-interest loans through mid-2028.
The pledges reflect significant increases by several countries. Notable contributions include the United States with $4 billion, up from $3.5 billion in 2021; Norway, with a 50% increase to 5.024 billion krone (approximately $455 million); South Korea, with a 45% increase to 846 billion won (around $597 million); Britain, with a 40% increase to 1.8 billion pounds; Spain, with a 37% rise to 400 million euros ($423 million).
However, fluctuations in currency values due to the strength of the US dollar diminished the dollar equivalent of several foreign contributions. For example, Norway’s 5.024 billion krone pledge, valued at $455 million, would have been $496 million earlier in the year.
Despite these increases, the pledges fell short of the $120 billion goal advocated by African heads of state, reflecting ongoing challenges in addressing the needs of the poorest nations.
The IDA fund has been critical in fostering development in vulnerable nations. World Bank President Ajay Banga emphasised that the new contributions, combined with balance sheet optimisations, will allow the IDA to stretch its resources and increase its lending capacity by $150 billion over the next decade.
Banga noted that the IDA is not just a financial mechanism but a catalyst for job creation, infrastructure development, and resilience against global crises. The fund supports job creation, education, health systems, and private sector growth, while addressing climate change and other pressing challenges.
Over 35 countries, including South Korea, China, Chile, and Turkey, have transitioned from IDA beneficiaries to donors, underscoring its role in fostering long-term development. The replenishment allows the IDA to continue providing essential financial aid to nations struggling with economic and environmental hardships.
The pledging conference concluded with the announcement that the IDA’s next meeting is scheduled for May 28, 2025. The ongoing contributions and initiatives reflect a commitment to bridging global inequalities and strengthening low-income countries’ capacity to address multifaceted crises.
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