World Bank announces record $100 billion IDA replenishment

• The World Bank Group today unveiled a record $100 billion replenishment of the International Development Association (IDA), marking a significant moment for global development. 

• The World Bank made the announcement in Seoul at a pledging conference for the IDA, which provides grants and very low interest loans to 78 low-income countries.

• Funding will support 78 countries, enabling investments in health, education, infrastructure, and climate resilience while stabilising economies, creating jobs, and laying the foundation for long-term prosperity.

• Donor countries have pledged the replenishment of the World Bank’s fund for the poorest nations, providing a vital lifeline for their struggles against crushing debts, climate disasters, inflation and conflict.

• Alongside this record-breaking financing, the World Bank is introducing a simpler, faster, and more agile IDA, reducing policy commitments and metrics by half, giving clients more freedom to prioritise and shape their development.

• The IDA is the World Bank’s fund for 78 low-income countries, by far their largest source of multilateral development finance. 

• It provides concessional financing for projects that boost economic growth, build resilience, and improve people’s lives across these countries — with more than two-thirds of the financing going to low-income countries in Africa. 

• Resources from IDA bring positive change to the 1.9 billion people who live in IDA countries. 

World Bank

• On July 1, 1944, as the battles of the Second World War raged in Europe and the Pacific, delegates from 44 countries met in Bretton Woods, New Hampshire to participate in what became known as the Bretton Woods Conference. 

• Their purpose was to agree on a system of economic order and international cooperation that would help countries recover from the devastation of the War and foster long-term global growth. 

• At its conclusion, the conference attendees produced the Articles of Agreement for the International Bank for Reconstruction and Development (soon called the World Bank) and the International Monetary Fund (IMF).

• The World Bank is like a cooperative, made up of 189 member countries. These member countries, or shareholders, are represented by a Board of Governors, who are the ultimate policymakers at the World Bank. 

• Generally, the governors are member countries’ ministers of finance or ministers of development. They meet once a year at the Annual Meetings of the Boards of Governors of the World Bank Group and the IMF.

• The World Bank Group is a unique global partnership with five institutions working for sustainable solutions that reduce poverty and build shared prosperity in developing countries.

Five institutions:

i) The International Bank for Reconstruction and Development: IBRD is a global development cooperative owned by 189 member countries. As the largest development bank in the world, it supports the World Bank Group’s mission by providing loans, guarantees, risk management products, and advisory services to middle-income and creditworthy low-income countries, as well as by coordinating responses to regional and global challenges. 

ii) The International Development Association: IDA helps the world’s poorest countries. Established in 1960, IDA aims to reduce poverty by providing zero to low-interest loans (called “credits”) and grants for programmes that boost economic growth, reduce inequalities, and improve people’s living conditions.

Together, IBRD and IDA make up the World Bank.

iii) International Finance Corporation: Established in 1956, IFC is the largest global development institution focused exclusively on the private sector. It helps developing countries achieve sustainable growth by financing investment, mobilising capital in international financial markets, and providing advisory services to businesses and governments. Although part of the Bank Group, IFC is a separate legal entity with separate Articles of Agreement, share capital, financial structure, management, and staff.

iv) Multilateral Investment Guarantee Agency: MIGA was created in 1988 to promote foreign direct investment into developing countries to support economic growth, reduce poverty, and improve people’s lives. MIGA fulfills this mandate by offering political risk insurance (guarantees) to investors and lenders.

v) International Centre for Settlement of Investment Disputes: ICSID provides international facilities for conciliation and arbitration of investment disputes.

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