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Business Reporter

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.

The financing, which was announced on Wednesday, 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.

In a public update, the World Bank (WB) said the fund was arguably the largest ever mobilized in IDA’s 61-year history and follows a two-day meeting hosted virtually by Japan.

“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,” WB group president, Mr David Malpass, said.

“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 multilateral finance institution said 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.

“In these countries, the ongoing pandemic is worsening poverty, undermining growth, and jeopardizing the prospects of a resilient and inclusive development,” said the bank.

“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.”

To help countries build back greener, a substantial portion of these funds would be channeled towards tackling climate change, with a focus on helping countries to adapt to rising climate impacts and preserve biodiversity.

IDA would also deepen support to countries to better prepare for future crises, including pandemics, financial shocks, and natural hazards.

“With this strong package, 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,” said the bank.

“The social safety nets programme is also expected to reach as many as 375 million people.”

IDA was established in 1960 to helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programmes that boost economic growth, reduce poverty, and improve poor people’s lives.

Since the start of the Covid-19 pandemic, the WB said it has deployed over US$157 billion to fight the health, economic, and social impacts of the pandemic, the fastest and largest crisis response in its history.