World Bank announces a $100 billion commitment for IDA21 replenishment, strengthening global efforts to combat poverty, climate change

Asempa Dawuro

Dec 14, 2024 - 14:13

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World Bank announces a $100 billion commitment for IDA21 replenishment, strengthening global efforts to combat poverty, climate change

Climate Resilience is key to improved Living

By Adu Gyamfi Odopa

(Odopa2@gmail.com)

The World Bank Group today unveiled a record $100 billion financing package for the 21st replenishment cycle of the International Development Association (IDA21), the largest in the fund’s history.

This commitment includes a joint contribution of $23.7 billion from 59 donor countries.

The IDA21 replenishment will provide critical support to low-income countries over a three-year period, from FY2025 to FY2028, strengthening global efforts to address poverty, inequality, and climate change.

The final commitments were made during the replenishment meeting in Seoul, South Korea, held from 5-6 December, which brought together World Bank management, governments, and various other stakeholders.

The IDA21 financing package surpasses the historic commitment of $93bn made during the previous replenishment cycle (IDA20).

This funding is vital for 78 countries, including some of the world's poorest nations, as they work to tackle pressing challenges such as poverty, food insecurity, conflict, fragility, debt burdens, and climate resilience.

It is particularly significant for Africa, a major recipient of IDA support – in 2023, nearly 70% of all IDA financing went to African countries.

Earlier this year, African leaders called for a replenishment of at least $120bn in 2024. While the $100 billion allocated falls short of these calls, it still represents an overall increase in funding.

The announcement comes on the heels of a commitment by developed countries to provide US$300 billion annually by 2035 for climate finance to developing nations at COP29 last month.

However, many developing countries expressed concern that this amount falls significantly short of the financing needed to address the climate crisis.

A key demand from these countries at COP29 was for financing to be provided on grant or grant -equivalent terms, given the high debt levels facing many low -income nations.

IDA remains one of the few international financing sources that offer grant financing for countries experiencing severe debt distress, which affects more than half of IDA-eligible countries and very low-cost financing to the remaining countries.

Therefore, further to the announcements made at COP29, the IDA contribution will provide a boost to countries to help them meet their adaptation financing needs.

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