By David Lawder
WASHINGTON (Reuters) – 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.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.
U.S. President Joe Biden pledged a $4 billion U.S. contribution, up from $3.5 billion in the previous round.
