Rio de Janeiro : US President Joe Biden announced that America will pledge USD 4 Billion over the period of the next 3 years to replenish the World Bank's International Development Association.
In a post on X, Biden shared, "This week I joined World Bank President Banga to announce the United States will pledge $4 billion over 3 years to the replenishment of IDA - the arm of the World Bank that supports vulnerable countries. We ask that others join us in stepping up their pledges".
The International Development Association (IDA) is part of the World Bank that helps low-income countries. Established in 1960, IDA complements the World Bank's original lending arm, the International Bank for Reconstruction and Development (IBRD).
As per the information shared by the IDA on its website, its grants and low-interest loans help countries invest in their futures and improve lives thereby creating more prosperous societies.
IDA is one of the largest sources of assistance for the world's 78 low-income countries and is the single largest source of donor funds for basic social services in these countries. IDA lends money on concessional terms. This means that IDA credits have a zero or very low interest charge and repayments are stretched over 30 to 40 years.
More than half of IDA countries receive all, or half, of their IDA resources on grant terms, which carry no repayments at all. These grants are targeted to low-income countries at higher risk of debt distress. IDA has historically been funded largely by contributions from the governments of its member countries. Donors meet every three years to replenish IDA resources and review its policy framework.
According to its website. the most recent replenishment of IDA's resources, the twentieth (IDA20), was finalized in December 2021, resulting in a historic USD 93 billion financing package for IDA countries for fiscal years 2022-2025.