On Wednesday, World Bank President Ajay Banga made note of the fact the International Development Association (IDA) was being pushed to its limits by increasing demands. He then issued a call for member nations to increase donations to the Bank’s lender’s fund for the poorest countries in the world, to make it the biggest replenishment of the fund ever.
At the opening of a mid-term review of the IDA’s 20th replenishment, which came to $93 billion, Banga said if the IDA were going to deliver better development outcomes to low-income nations, the shareholders at the World Bank, donor nations, and philanthropies would need to give more.
At a conference in Zanzibar, Tanzania, Banga said, “The truth is we are pushing the limits of this important concessional resource and no amount of creative financial engineering will compensate for the fact that we need more funding. This must drive each of us to make the next replenishment of IDA the largest of all time.”
The 20th IDA round of funding, which is presently underway, is scheduled to be completed on June 30th, 2025. The Zanzibar conference is designed to contribute to that funding. However Banga used the opportunity to begin a campaign to increase the next round of funding to exceed the current round’s $93 billion.
His request for increased donations, which have been steadily depleted by the slow recovery of the global economy from the Covid-19 pandemic, as well as the negative effects of rising geopolitical tensions, including the conflict in Ukraine, followed a speech in which Banga highlighted the plans of the World Bank to increase its funding of climate change projects at the COP28 conference in Dubai.
At COP28, Banga announced the Bank had set new targets to increase the percentage of climate-related financing it will offer out of its total annual financing, to 45% from 35%, with an immediate increase of roughly $9 billion.
The move is not without controversy, however. Some developing nations, which are focused on supporting more core survivability programs relating to public health and infrastructure, have complained that diverting so much funding toward climate objectives and other global crises of the moment, will divert much-needed funding from the Bank’s core mission of aiding developing nations improve their economic growth and provide stability for their people.
Banga promised he would look to fulfill both objectives, and argued that climate outcomes and positive development are heavily interdependent.
He added that the World Bank will have to reevaluate how it measures its performance and devote more attention to improving outcomes, as opposed to numbers of projects, or financing disbursed. He says that will force the Bank to focus more of replicable projects, such as an IDA-financed mini-electric grid built in Nigeria to deliver electricity to rural communities.
He concluded, “But this is just one example, I want to see 100,000 – 200,000 – half a million more,” noting that the IDA had committed to investing $5 billion into the construction of renewable electricity facilities to offer power to 100 million Africans prior to 2030.
