The International Development Association: A Lifeline for the World's Poorest Countries

What is the IDA?

The International Development Association (IDA) is a significant part of the World Bank Group dedicated to aiding the world’s poorest nations. It operates as a global fund specifically created to assist those in the greatest need.

How does it work?

• Donors: Wealthier countries contribute funds to the IDA, known as the "donors."
• Beneficiaries: The IDA lends this money to the poorest nations—referred to as "beneficiaries"—at very low interest rates or even as grants, which means free money.
• Current Support: At present, the IDA supports 78 countries, many of which are located in Africa.

Eligibility Criteria

A nation qualifies for IDA support if it meets specific criteria, such as maintaining a low per capita income and having limited access to financial markets.

What is a replenishment?

Every three years, the IDA requires additional funds to continue its support. This need for new funding is referred to as "replenishment." Donor nations convene to pledge new financial contributions. The current round of replenishment is known as "IDA21," marking the 21st time this has occurred.

The 21st Replenishment: By the Numbers

• Donor Contributions: A total of $24 billion has been pledged by donor countries.
• Total Funding: This $24 billion is strategically leveraged to create a total of $100 billion in available financing. The IDA accomplishes this by utilizing donor funds to borrow additional amounts from financial markets at favorable rates.
• Impact: The $100 billion will facilitate projects in various sectors, including health, education, infrastructure, climate resilience, and job creation across the 78 beneficiary countries.

Why is this replenishment special?

• Largest Ever: IDA21 represents the largest replenishment in the history of the organization.
• More Efficient: The IDA has optimized its operations to expedite the distribution of funds to eligible countries.
• Focus on Jobs: IDA21 emphasizes job creation, particularly for the youth, ensuring that the funding contributes to sustainable economic growth.

In conclusion, the International Development Association plays a crucial role in supporting the world’s most vulnerable nations through innovative funding mechanisms and a focus on impactful projects that foster development and resilience.