 replenishment in Seoul, raising a staggering $100 billion.){kind=link}
The World Bank Group has wrapped up the International Development Association (IDA) replenishment in Seoul, raising a staggering $100 billion for global development.
According to a release, the $100 billion replenishment is the highest in IDA’s 60-year history but falls short of the target set by several agencies. World Bank Group President Ajay Banga described the replenishment as an incredible achievement in the face of a challenging global landscape.
IDA is an arm of the World Bank that provides concessional grants and loans to third-world countries at low interest rates, serving as a “crucial lifeline” to nations in need. Every three years, donor countries converge to pledge contributions and review IDA’s policy framework for international development.
In South Korea, donor nations pledged a total of $23.7 billion to the 21st IDA replenishment with 27 countries increasing their donations by over 25%. IDA’s leveraging model sees the pledged funds raised to $100 billion, multiplying every donor dollar by four times, rising 7.3% from IDA20.
An impressive 59 countries made financial commitments to IDA21 in a replenishment led by the US, UK, Japan, Germany, and France.
A key feature of IDA21 is a change in policy with donor nations pushing for the removal of “duplicative metrics.” Compared to IDA20, policy requirements for the next three years have been slashed from 1,100 to 500 with 78 nations singled out for funding.
“During this replenishment cycle, we worked closely with our partners to streamline IDA’s operations, cutting the number of required metrics in half to 500,” said Banga. “This will make IDA simpler, faster, and more responsive to the needs of our clients.”
The $100 billion is expected to be deployed for investment in health, education, job creation, and climate resilience in developing and underdeveloped nations.
Despite rising debt levels and economic uncertainty, Banga says IDA achieved the milestone by demonstrating financial shrewdness, optimizing its balance sheet, and steadily increasing its risk appetite.
A streak of positive results
IDA has been championing frontline development in the Global South, operating as a critical partner for needy nations via low-interest loans. In the 60 years of its operations, 35 countries have graduated from being recipients of grants to become donors in their own right.
In the last decade, IDA has deployed nearly $300 billion with $179 billion funding development projects in Africa. From 2015, IDA says that its funds have been instrumental in providing 900 million persons with health care while connecting over 194 million individuals to potable water and electricity.