âThe World Bank’s International Development Association is the international community’s single largest channel for multilateral aid. Replenishing IDA20 is crucial to avoid a sudden drop in World Bank aid to the poorest countries when they need it most. During the pandemic, more than 100 million people fell into extreme poverty, âsaid Minister of International Development Anne Beathe Tvinnereim.
On December 15, 48 donor countries concluded the 20th Replenishment Process of the International Development Association (IDA), the World Bank’s fund for the world’s poorest countries. The result is a record financial package of $ 93 billion for low-income countries (IDA20), which will cover the period from mid-2022 to mid-2025. This is $ 11 billion more than the previous replenishment. Norway will provide more than NOK 3.3 billion over the three-year period. This is an increase of 7% from Norway’s contribution to the previous replenishment in 2019. Almost NOK 100 million of Norway’s contribution will be used to alleviate the debt of poor countries.
IDA provides long-term heavily subsidized or interest-free loans to the world’s 74 poorest countries, and grants to the most indebted of those countries. The World Bank, recipient countries and donors have agreed that all IDA20 policies must prioritize climate action, women’s rights and gender equality, private sector development and job creation, health, education and support to countries and regions affected by conflict and fragility.
This latest replenishment was brought forward due to urgent funding needs that arose during the COVID-19 pandemic. Over the past two years, a substantial portion of IDA resources have been allocated to health-related efforts and measures to counter economic decline in the world’s poorest countries.
âFor the first time since 2000, global poverty is increasing. Women, children and vulnerable groups are severely affected. The world is falling behind in efforts to achieve the SDGs. In the years to come, the international community will have to unite and take concerted and effective action to regain lost ground and overcome poverty, âsaid Ms. Tvinnereim.
Donors agree that the post-pandemic recovery must be designed to spur growth and create tens of millions of jobs, and must rely as much as possible on clean energy and climate-friendly technologies. More than a third of IDA20’s financial package will be allocated to the fight against climate change. Priority will be given to efforts to strengthen preparedness and build resilience to future crises, including climate-related disasters, famine and new pandemics. A substantial portion of IDA20 funding will be used to finance the purchase and distribution of coronavirus vaccines in the world’s poorest countries.
Of the total of $ 93 billion that has now been mobilized for the next three-year period, contributions from donor countries amount to $ 23.5 billion. Most of the funding for the replenishment comes from the World Bank itself, with funding raised through repayment of loan repayments and lending in the capital markets.
âThis is a very efficient financing model that offers good value for money in terms of poverty reduction. For every krone we give to IDA20, almost four will be provided to the poorest countries in the form of low interest loans or grants, âsaid Ms Tvinnereim.
The United States is the largest donor to IDA20, followed by Japan and the United Kingdom. The Nordic and Baltic countries together mobilized over US $ 2 billion, representing over 8% of donor funding.
âThe combined contributions from the Nordic countries make the Nordic region the third largest donor to IDA20, down from fourth place compared to IDA19. As Minister for Nordic Cooperation, I am very happy about it. It is also very positive that the share of IDA financing provided to African countries continues to increase. IDA20 offers an important way to show solidarity with Africa, âMs. Tvinnereim said.
The potential achievements of IDA20, provided the efforts are fully successful, include:
- essential health services, better nutrition and family planning services for some 430 million people
- immunization of 200 million children
- a social safety net for no less than 375 million people
- better access to electricity for 50 million people
- access to clean stoves for 20 million people
- better access to drinking water for 20 million people
Distributed by APO Group on behalf of the Royal Norwegian Ministry of Foreign Affairs.