The World Bank Group, on Thursday evening said it has made significant progress in the desire to end extreme poverty with the pledge of a record $75 billion for the International Development Association (IDA), its fund for the poorest countries, including Nigeria.
The funding will enable IDA to dramatically scale up development interventions to tackle conflict, fragility and violence, forced displacement, climate change, and gender inequality; while promoting governance and institution building, besides providing jobs and economic transformation, over the next three years between July 1, 2017 and June 30, 2020.
A total of 75 low-income countries are eligible to benefit from the IDA18 financing package.
The commitment, the group said in a statement, is expected to support essential health and nutrition services for up to 400 million people; access to improved water sources for up to 45 million people; financial services for four to six million people; and safe childbirth for up to 11 million women through provision of skilled health personnel. The partners also committed to training for up to 10 million teachers to benefit over 300 million children; in addition to immunising between 130 and 180 million children; while ensuring better governance in 30 countries through improved statistical capacity.
The fund will also help in generating additional 5GW of renewable energy generation capacity, all of which are underpinned by an overarching commitment to invest in growth, resilience and opportunity, the group explained further.
Commenting on the deal, World Bank Group President Jim Yong Kim said it “is a pivotal step in the movement to end extreme poverty. The commitments made by our partners, combined with IDA’s innovations to crowd in the private sector and raise funds from capital markets, will transform the development trajectory of the world’s poorest countries. We are grateful for our partners’ trust in IDA’s ability to deliver results.
“With this innovative package, the world’s poorest countries – especially the most fragile and vulnerable – will get the support they need to grow, create opportunities for people, and make themselves more resilient to shocks and crises,” said Kyle Peters, World Bank Group Interim Managing Director and Co-Chair of the IDA18 negotiations. “IDA’s focus on issues like climate change, gender equality and preventing conflict and violence will also contribute to greater stability and progress around the world.”
“IDA is writing a whole new chapter in the story of development,” said Dede Ekoue, IDA18 co-chair and Togo’s former Minister of Development.
“Together with donors, working hand-in-hand with borrower governments, we are putting forward an innovative, ambitious and responsive package of support that gives hope to the poorest. These interventions will help transform the lives of billions of people living in IDA countries.”
To finance this groundbreaking package, IDA is planning the most radical transformation in its 56-year history by leveraging its equity by blending donor contributions with internal resources and funds raised through debt markets.
By blending concessional contributions from donors with its own resources and capital market debt, IDA will significantly increase the financial support it provides to clients.
“The innovative financing package offers exceptional value for money, with every $1 in partner contributions generating about $3 in spending authority,” said Axel van Trotsenburg, World Bank Vice President for Development Finance. “It is one of the most concrete and significant proposals to date on the Addis Ababa Action Agenda—critical to achieving the 2030 Sustainable Development Goals.”
The additional financing will enable IDA to double the resources to address fragility, conflict and violence (more than $14 billion), as well as the root causes of these risks before they escalate, and additional financing for refugees and their host communities ($2 billion). Increased financing will help strengthen IDA’s support for crisis preparedness and response, pandemic preparedness, disaster risk management, small states and regional integration.
Efforts to stimulate private sector development in the most difficult environments, at the core of job creation and economic transformation, will receive a major push in the form of a new $2.5 billion Private Sector Window (PSW). The PSW, being introduced together with the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA), will help mobilize private capital and scale up private sector development in the poorest countries, particularly in fragile situations.
The funds will also help governments strengthen institutions, mobilize resources needed to deliver services, and promote accountability.
“One of the extraordinary things about IDA is that it brings different countries together to help the poorest. In this replenishment in particular, we’ve really seen that IDA is truly a global coalition,” said van Trotsenburg.