World Bank pledges historic $100bn aid for poorest nations

The World Bank announced on Thursday that it had secured nearly $24 billion in commitments to support loans and grants for some of the world's poorest nations, leveraging this to generate $100 billion in spending power.

A World Bank spokesperson told AFP that donor countries pledged $23.7 billion to replenish the International Development Association (IDA), the Bank's concessional lending arm.

This marks a modest increase from the approximately $23.5 billion raised during the last fundraising round three years ago.

This funding enables the Bank to leverage its resources by borrowing from financial markets, significantly boosting available funds to support development initiatives.

The total potential loans and grants now stand at around $100 billion, surpassing the $93 billion offered in 2021.

"We believe the historic success of this IDA21 replenishment is a vote of confidence and support from donors and clients," a World Bank statement read, referring to the current IDA funding round.

"This funding will be deployed to support the 78 countries that need it most," said World Bank President Ajay Banga, in a separate statement, referring to the developing countries that are eligible for IDA support.

It would, he added, help provide "resources to invest in health, education, infrastructure, and climate resilience," as well as helping to stabilise economies and create jobs.

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 has become the single largest source of concessional, or below-market, climate finance, and around two-thirds of all IDA funding over the past decade has gone to support countries in Africa, according to the World Bank.

IDA replenishment is a crucial part of the 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 $4 billion in new funding to the IDA, while other countries — including Norway and Spain — also significantly stepped up their financial support.

Thirty-five 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.