World Bank pledges to replenish IDA fund early to help poorest countries

The World Bank said on Thursday that it had launched an early twentieth replenishment process of the International Development Association, its fund for the world’s poorest countries, aiming to support countries in their recovery from the COVID-19 crisis and transition to green, resilient, and inclusive development.

It said in a statement that the IDA20 replenishment would conclude in December 2021 with a policy and financial package to support 74 countries between July 2022 and June 2025.  

 “IDA accelerated its financing commitments in 2020 to help the world’s poorest countries contain the impacts of the pandemic and lay the groundwork for recovery. I am pleased that our shareholders have agreed to an early replenishment so IDA can continue these efforts,” said World Bank Group President David Malpass.

“IDA is a uniquely effective platform, consolidating global resources from donors and capital markets to support well-focused country programs and development spending. An ambitious and successful IDA20 replenishment by December 2021 will be critical to provide the concessional financing and grants that the poorest countries need so urgently at this time.” 

The IDA19 three-year cycle started in July 2020 with $23.5 billion of donor contributions aiming to enable a total of $82 billion financing to IDA countries, according to the statement.

The World Bank said almost half of this amount had been committed to the world’s poorest countries in the first year of the IDA19 cycle, necessitating advancing IDA20 so that additional financial resources can be available for countries to meet their urgent development needs.

It said in February 2021, IDA donor and borrower country representatives agreed to advance IDA20 by one year due to pressures of the COVID-19 crisis.

The statement said under the theme ‘Building Back Better from the Crisis: Towards a Green, Resilient and Inclusive Future,’ the IDA20 replenishment process would be informed by IDA19 progress as well as the World Bank’s mission and COVID-19 response. 

It said, “IDA donor and borrower representatives agreed that the IDA20 policy framework will maintain the four IDA19 special themes of climate change; fragility, conflict and violence; gender; and jobs and economic transformation; and introduce human capital as the fifth special theme. 

“IDA20 will also deepen recovery efforts by focusing on four cross-cutting issues: crisis preparedness; debt sustainability and transparency; governance and institutions; and technology. ”

The bank said negotiations on the policy commitments and financing framework would continue through meetings in June and October, concluding with donors pledging their contributions on December 13-14, 2021. 

It said the negotiation process would be co-chaired by Axel van Trotsenburg, World Bank Managing Director of Operations, and Dr Denny Kalyalya, an independent co-chair selected by IDA donor and borrower representatives.

Leave a Reply

Your email address will not be published. Required fields are marked *