The World Bank has secured a record-breaking $100 billion in pledges to fund its International Development Association (IDA), the arm dedicated to providing low-interest loans and grants to the world’s poorest countries.
This historic milestone surpasses the previous funding round in 2021, which totaled $93 billion.
Unprecedented Global Commitment
The IDA relies on periodic replenishments from donor nations to sustain its operations. This year’s pledges, totaling $24 billion from donor countries, form the foundation for leveraging funds through IDA’s financial model, which multiplies contributions 3.5 to 4 times.
World Bank President Ajay Banga, who assumed leadership in June 2023, spearheaded this record-breaking effort despite global economic challenges such as pandemic recovery, inflation, and currency volatility.
It is a 25% increase in contributions from 17 donor countries, with 10 nations raising their pledges by 40% or more compared to the previous round.
Impact of IDA Investments
The IDA has been a lifeline for developing nations, deploying $270 billion over the past decade.
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Approximately two-thirds of these funds have been directed to Africa, delivering critical services and infrastructure, including:
- Health Services: Reaching 900 million people.
- Electricity Access: Connecting 117 million individuals to reliable power.
- Clean Water: Providing access to 94 million people.
In the 2023 fiscal year, countries such as Pakistan, Bangladesh, Tanzania, and Kenya were among the largest recipients, each receiving over $2 billion of the $34 billion in total commitments.
Banga’s Vision for the World Bank
Ajay Banga has prioritized transforming the World Bank into a faster, more efficient institution, with a renewed focus on mobilizing private sector capital to amplify its development impact. His vision includes addressing climate change, supporting clean energy transitions, and enhancing resilience in vulnerable communities.
Under Banga, the World Bank aims to adapt its lending model to meet evolving global challenges, emphasizing innovative financing solutions and partnerships.
Key Contributions from the US and Other Donors
The Biden administration recently pledged $4 billion to the IDA – its largest shareholder. This pledge, however, requires congressional approval, which is uncertain given the short legislative session remaining in 2024.
Historically, US contributions to the IDA have varied. During President Donald Trump’s administration, the US contributed approximately $3 billion to the fund in 2019, despite the administration’s preference for unilateral lending over multilateral approaches.
