World Bank wins pledges for $100 billion replenishment of fund for poorest countries

Donor countries have pledged a record $100 billion three-year 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.

The World Bank made the announcement early on Friday in Seoul at a pledging conference for the International Development Association, which provides grants and very low interest loans to some 78 low-income countries.

The total exceeds the previous $93 billion IDA replenishment announced in December 2021. Countries will contribute about $24 billion directly to IDA, but the fund will issue bonds and employ other financial leverage to stretch that to the targeted $100 billion in grants and loans through mid 2028.

But the two-day pledging conference fell short of the $120 billion goal that some developing countries had called for, partly because the dollar’s strength -- pushed up by Donald Trump’s U.S. presidential election victory -- diminished the dollar value of significant increases in foreign currency contributions by several countries.

At a G20 leaders’ summit in Brazil last month, Norway increased its pledge by 50% from 2021 to 5.024 billion krone. That’s $455 million at current exchange rates, but at the start of 2024, it would have been worth $496 million.

South Korea boosted its pledge by 45% to 846 billion won, ($597 billion), Britain by 40% to 1.8 billion pounds, while Spain boosted its contribution to 400 million euros, a pledge worth $423 million -- $10 million less than the day it was announced in October.

U.S. President Joe Biden pledged a $4 billion U.S. contribution, up from $3.5 billion in the previous round.

Source: Reuters
 

--Agencies