Donor countries committed $23.7bn to replenish the bank’s concessional lending arm, known as the International Development Association (IDA), a World Bank spokesperson told AFP, marking a slight increase from the roughly $23.5bn pledged by donor countries during the last fundraising round three years ago.
The Bank can use this money to borrow on financial markets, allowing it to leverage the amount raised by around four times, unlocking around $100bn in new loans and grants, up from $93bn in 2021.
“We believe the historic success of this IDA21 replenishment is a vote of confidence and support from donors and clients,” the World Bank statement read, referring to the current IDA funding round.
“It is the result of our work to become a more faster, simpler, and more effective institution,” it added.
The World Bank’s announcement follows two days of talks in the South Korean capital, Seoul, a city still reeling after President Yoon Suk Yeol declared martial law late on Tuesday local time, before backtracking under pressure from lawmakers.
IDA mainly provides grants to support the world’s 78 poorest countries, covering everything from the economic impact of the COVID-19 pandemic to climate change adaptation.
It is the single largest source of concessional, or below-market, finance for these countries, with around three-quarters of all IDA funding going to support countries in Africa, the World Bank said in a statement announcing the decision.
IDA replenishment is a crucial part of the World Bank’s operations, and happens once every three years, with much of the funding coming from the United States, Japan and several European countries including the United Kingdom, Germany and France.
This year, the United States announced ahead of time that it would commit a record $4bn in new funding to the IDA, while other countries - including Norway and Spain - also significantly stepped up their financial support.
35 former recipients of IDA assistance have graduated from developing economy status in recent decades, including China, Turkey and South Korea, with many of them now donors to the fund.