World Bank secures US$100 billion in record funding for 78 poorest nations

According to Reuters, donor nations have pledged a record-breaking US$100 billion in funding over three years for the World Bank's International Development Association (IDA) to support 78 of the world's poorest countries. The announcement was made during the IDA replenishment meeting in Seoul. The funding aims to help these nations address mounting debt burdens, climate disasters, inflation, and regional conflicts.

The IDA is the World Bank's financing arm dedicated to low-income countries, providing grants and low-interest loans. The new funding surpasses the US$93 billion announced in December 2021. Of the total pledge, US$24 billion will come directly from donor contributions, slightly higher than the US$23.5 billion committed in 2021. Through bond issuance and other financial mechanisms, the IDA will expand the funding to US$100 billion in grants and loans by mid-2028.

Despite this record funding, the pledges fell short of the US$120 billion target sought by African leaders, partly due to the strength of the US dollar, which reduced the value of foreign currency contributions. However, 17 donor countries pledged to increase their contributions by over 25%, with 10 nations boosting their commitments by 40% or more.

World Bank President Ajay Banga highlighted that the IDA's expanded capacity is the result of efforts to optimize the institution's balance sheet, which has increased lending capacity by approximately US$150 billion over the past decade. He emphasized that the IDA is more than just a financial tool—it is a catalyst for job creation and an enabler of infrastructure development, educational improvements, healthcare system enhancements, and private sector growth in the developing world.

This US$100 billion funding package will support investments in healthcare, education, climate protection, and infrastructure across 78 countries, while stabilizing economies and creating jobs. The initiative is seen as a foundation for sustainable growth and long-term prosperity in the Global South.

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