While the World Bank managed to secure a record US$93 billion for its 20th International Development Association (IDA) replenishment, it fell short of its target to reach US$100 billion, partly as a result of a dramatic decline in UK funding.
IDA is the World Bank's low-income lending arm and the largest joint venture for multilateral funding in the world; IDA20 is especially important for preventing an abrupt drop in the World Bank's funding to low-income countries. More than 100 million people have been affected by extreme poverty due to the COVID-19 crisis.
In total, IDA20 ended at a record high with US$93 billion for the 2023-2025 period - US$11 billion more than the previous donor replenishment in 2019. The World Bank, donors, and recipient countries have agreed to prioritize gender equality, business development and job creation, climate action, health and education, and support for vulnerable states for the 2023-2025 period.
The UK government reduced its commitment to the replenishment by 55% or an estimated US$1.8 billion. The reduced funding commitment will result in the UK losing its position as the most generous donor to IDA, a role it held for many years. The cuts are a direct result of the UK government’s decision to reduce its ODA budget from 0.7% of gross national income (GNI) to 0.5% from 2021 onwards.
Japan, the US, and France all increased their pledges. The US, Japan, and the UK, are the top three donor countries to IDA20, respectively. The Baltic and Nordic countries together mobilized a total of US$2 billion - over 8% of IDA20's total funding. If Nordic funding is amalgamated, the Nordic countries are the third-largest donor to IDA20
Norway's Ministry of Foreign Affairs announced that it will give more than US$366 million in funding to IDA20, a 7% increase compared to Norway's 2019 contribution. Approximately US$11 million of the funding will be targeted towards debt relief contributions in low-income countries.