World Bank announces record $100 bn support for world's poorest countries

World Bank President Ajay Banga looks on at the World Bank headquarters in Washington, DC, on October 22, 2024, during the International Monetary Fund/World Bank annual Fall meetings. [AFP]

The World Bank announced Thursday that it had raised close to $24 billion to provide loans and grants for some of the world's poorest nations, which it can leverage to generate a record $100 billion in total spending power.

Donor countries committed $23.7 billion to replenish the bank's concessional lending arm, known as the International Development Association (IDA), a World Bank spokesperson told AFP, marking a slight increase from the roughly $23.5 billion pledged during the last fundraising round three years ago.

The Bank can use this money to borrow on financial markets, allowing it to leverage the amount raised by around four times, unlocking around $100 billion in new loans and grants, up from $93 billion 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," World Bank President Ajay Banga said 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 stabilize 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.