In a statement released on Thursday by Ajay Banga, President of the World Bank Group, it was announced that donor nations have pledged $23.7 billion to replenish its concessional lending division, known as the International Development Association (IDA).
This year's contributions represent a modest increase from the approximately $23.5 billion raised during the previous fundraising cycle three years ago.
“Over the past year, we have faced an exceptionally challenging global environment characterized by economic instability, escalating debt, climate-related crises, and an urgent need for human development. Yet, amidst these difficulties, a remarkable collective effort has emerged, fueled by a shared conviction that we can and must improve the conditions for the world's most vulnerable populations.
“Today, we are pleased to share the outcomes of that endeavor. Following months of negotiations, collaboration, and steadfast dedication from our donor community, the 21st replenishment of the International Development Association (IDA) has successfully secured $24 billion in contributions.
“Thanks to IDA’s distinctive leveraging strategy, this $24 billion will facilitate a total of $100 billion in accessible financing—the largest replenishment in IDA’s history. This achievement is made possible not only by the generosity of our donors but also by our efforts to optimize our balance sheet, embrace greater risk, and enhance our leveraging capabilities,” the statement noted in part.
The allocated funding will be directed towards supporting the 78 countries that require it the most, providing essential resources for investments in health, education, infrastructure, and climate resilience; stabilizing economies, creating jobs, and laying the groundwork for a brighter future; and empowering nations to navigate an unpredictable world and realize their full potential.
Banga emphasized that the replenishment process extends beyond mere resource allocation; it also encompasses the methods of delivery.
"Over time, the operational framework of IDA has become increasingly intricate, featuring more than 1,100 distinct requirements and metrics. Although these measures are well-intentioned, they have frequently hindered our efficiency and placed additional burdens on those we aim to assist.
"In this replenishment cycle, we collaborated closely with our partners to simplify IDA’s operations, reducing the number of required metrics by half to 500. This change will render IDA more straightforward, quicker, and more attuned to the needs of our clients, resulting in fewer bureaucratic obstacles and allowing for greater focus on achieving tangible outcomes."
Regarding the significance of IDA, the bank noted that in its 60 years of operation, 35 countries have successfully graduated from IDA, many of which have since become generous donors, contributing to the prosperity of others.
"Throughout its history, IDA has served as a vital ally for the world’s most impoverished nations. It provides essential support that few others can offer:
"Affordable financing through zero- and low-interest loans and grants for countries with limited financial resources.
"Unparalleled development expertise acquired from decades of experience across the globe.
"The ability to multiply every donor dollar by 3.5 to 4 times, transforming modest contributions into impactful investments."
This approach, Bayan noted, has allowed IDA to mobilize and allocate $270 billion in the past decade, with $179 billion specifically directed to Africa.
"IDA has emerged as the largest source of concessional climate financing, investing $85 billion worldwide over the last ten years, with more than half of that amount focused on climate adaptation—protecting communities from rising sea levels, constructing heat-resistant schools, and ensuring that farmers have access to the appropriate seeds for their conditions," he added.
He stated that during the review period, the investments have yielded significant outcomes, including reaching 900 million individuals with health services, connecting 117 million people to dependable electricity, providing 94 million individuals with access to clean water, and supporting over 18 million farmers with essential technology.
"This is why IDA is frequently referred to as the 'best deal in development.' It transcends mere financial deployment; it fundamentally transforms lives.
"While we celebrate these successes and today's milestones, we must acknowledge that the challenges ahead will require even greater focus. In many countries served by IDA, governments are grappling with escalating debt and constrained fiscal capacity. For these nations, IDA’s concessional financing often represents the sole feasible source of investment in sectors that generate employment.
"This is especially vital as a significant cohort of 1.2 billion young people is poised to enter the job market. Current forecasts suggest that only 420 million jobs will be available, leaving nearly 800 million young individuals at risk of unemployment—a potential threat to social stability and economic progress
"The World Bank Group is acutely aware of this challenge and is committed to addressing it directly, which is why we are ensuring that job creation is a primary objective of our initiatives rather than a secondary outcome.
"Historically, employment has been the most reliable and enduring solution to poverty. It fosters dignity, empowers women, instills hope in younger generations, and strengthens communities.
"In this light, IDA serves not merely as a financial tool; it acts as a catalyst for job creation. It equips countries with the necessary resources to develop infrastructure, enhance education and health systems, and stimulate private sector growth—all essential components for generating jobs and economic opportunities.
The connection between the World Bank Group's expertise in the public sector and our financing capabilities in the private sector enables us to effectively address our global jobs agenda with both depth and breadth. This initiative represents a comprehensive approach and signifies a significant transformation for the institution, he stated.