December 17: The World Bank has announced a US$ 93 billion replenishment package of the International Development Association (IDA) to help low-income countries respond to the COVID-19 crisis and build a greener, more resilient, and inclusive future.

According to a statement issued by the World Bank on December 15, the financing brings together $23.5 billion of contributions from 48 high and middle-income countries with financing raised in the capital markets, repayments, and the World Bank’s own contributions.

The financing package, agreed over a two-day meeting hosted virtually by Japan, is the largest ever mobilized in IDA’s 61-year history, the statement further said.

The World Bank said that IDA’s unique leveraging model enables it to achieve greater value from donor resources. According to the World Bank, every $1 that donors contribute to IDA is now leveraged into almost $4 of financial support for the poorest countries. 

 “Today’s generous commitment by our partners is a critical step toward supporting poor countries in their efforts to recover from the COVID-19 crisis,” said World Bank Group's President David Malpass. “We are grateful for the confidence our partners have in IDA as a non-fragmented and efficient platform to tackle development challenges and improve the lives of millions of people around the world.”

The funds will be delivered to the world’s 74 poorest countries under the 20th replenishment (IDA20) programme, which focuses on helping countries recover from the impacts of the COVID-19 crisis. The World Bank noted that the ongoing pandemic is worsening poverty, undermining growth, and jeopardizing the prospects of a resilient and inclusive development in these countries.

"Countries are struggling with falling government revenues; increasing debt vulnerabilities; rising risks to fragility, conflict, and instability; and dropping literacy rates. About a third of IDA countries are facing a looming food crisis," the statement added. 

To help countries build back greener, a substantial portion of these funds go to tackling climate change, with a focus on helping countries to adapt to rising climate impacts and preserve biodiversity. IDA will also deepen support to countries to better prepare for future crises, including pandemics, financial shocks, and natural hazards, the statement added.

With this strong package, the World Bank expects IDA will be able to scale up its support in the pandemic and address health challenges, helping 400 million people receive essential health and nutrition resources. 

 The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives.