International Development Association - THE WORLD BANK'S FUND FOR THE POOREST
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International Development Association THE WORLD BANK’S FUND FOR THE POOREST
This publication is a product
of the Development Finance
Vice Presidency of the World Bank Group
1818 H Street, N.W.
Washington, D.C. 20433
IDA.worldbank.org
Facebook.com/IDA.WBG
YouTube.com/WorldBank
Twitter.com/WBG_Fin4Dev
October 2017
Photography:
Cover, Dominic Chavez/World Bank—Dignity factory workers producing shirts for overseas clients in Accra, Ghana.
p.4, Graham Crouch/World Bank—Sughira, 16 years old, works at weaving silk on a loom at the historic Herat Citadel,
Afghanistan.
pp.6-7, Arne Hoel/World Bank—Food Lover’s Market at the newly opened East Park Mall in Lusaka, Zambia. The store, modeled
after the Whole Foods store chain the U.S., has 150 employees.
p.8, Khasar Sandag/World Bank—With World Bank support, rural primary schools in Mongolia give students books to take
home and read with their friends and families.
p.10, Dominic Chavez/World Bank—Karamba Banjoura, a member of UNICEF, talks about Ebola safety and prevention, in
Conakry, Guinea.
IDA • The World Bank’s Fund for the Poorest • 2
WHO WE ARE
The International Development Association (IDA) is the By the Numbers
Key IDA achievements from 2011-2017
part of the World Bank that helps the world’s poorest
countries. Established in 1960, IDA aims to reduce
poverty by providing loans (called “credits”) and grants
for programs that boost economic growth, reduce
inequalities, and improve people’s living conditions. 8 MILLION
Teachers were recruited
and/or trained
IDA complements the World In addition to concessional loans
Bank’s original lending arm—the and grants, IDA provides significant
International Bank for Reconstruction levels of debt relief through the
and Development (IBRD). IBRD was Heavily Indebted Poor Countries
established to function as a self- (HIPC) Initiative and the Multilateral
sustaining business, and provides Debt Relief Initiative (MDRI).
1/4
loans and advice to middle-income
and credit-worthy countries. IBRD In the fiscal year ending June 30,
and IDA share the same staff and 2017, IDA commitments totaled
headquarters and evaluate projects $19.5 billion, of which 17 percent BILLION
with the same rigorous standards. was provided on grant terms. New
commitments in fiscal year 2017 Children were immunized
IDA is one of the largest sources of comprised 261 new operations.
assistance for the world’s 75 poorest Since 1960, IDA has provided
countries, 39 of which are in Africa, $345 billion for investments in 113
and is the single largest source of countries. Annual commitments have
donor funds for basic social services increased steadily and averaged
in these countries. about $18 billion over the last three
30
years, with about 54 percent going
IDA lends money on concessional to Africa.
terms. This means that IDA credits
have a zero or very low interest
charge. Repayments are stretched
MILLION
over 25 to 38 years, including a 5- Pregnant women received
to 10-year grace period. IDA also prenatal care from a health
provides grants to countries at risk of provider
debt distress.
IDA • The World Bank’s Fund for the Poorest • 3
By the Numbers
Key IDA achievements from 2015–2017
35 MILLION
People benefited from access to
electricity
14.5
People benefited from
MILLION
improved sanitation
facilities
IDA • The World Bank’s Fund for the Poorest • 4
WHAT WE DO
The world’s poorest countries are often unable to attract sufficient capital to support
their urgent development needs and therefore rely on support from multilateral
institutions and donor governments as a critical source of funding.
IDA is a multi-issue institution, For contributing partners, IDA debt-service burden, and has a
supporting a range of development provides an efficient channel for system for allocating grants based
activities, such as primary education, directing development assistance on countries’ risk of debt distress,
basic health services, clean water to the poorest countries. Because designed to help countries ensure
and sanitation, agriculture, business contributions to IDA are pooled debt sustainability.
climate improvements, infrastructure, together with repayments from
and institutional reforms. These former and current IDA recipients, IDA places a premium on
interventions pave the way toward IDA provides a substantial and development impact and is regarded
equality, economic growth, job stable source of funding that IDA as a transparent, cost-effective
creation, higher incomes, and countries can rely on to fund their platform for achieving results. (Read
better living conditions. For the development priorities. about results measurement below.)
period July 1, 2017–June 30, 2020 For example, from fiscal years
(IDA18), IDA operations are placing IDA is also a key partner during 2011-17, IDA financing immunized a
a special emphasis on five thematic crises and emergencies through quarter of a billion children; provided
areas: climate change, gender tools like its Crisis Response access to better water services for
and development, fragility, conflict Window (CRW). The CRW 72 million people; and recruited and/
and violence, jobs and economic supported countries undergoing or trained 8 million teachers.
transformation, and governance and severe crises, such as the famine in
East Africa and Yemen, Haiti in the Visit us online to learn more about
institutions.
aftermath of the 2010 earthquake, what we do and see what donors
IDA18 financing is expected to West African countries affected and others say about us at
provide, among other things, by the Ebola outbreak, and Nepal ida.worldbank.org, www.facebook.
essential health and nutrition after the 2015 earthquake. Since com/ida.wbg, www.twitter.com/
services for up to 400 million people, its introduction in IDA16, the CRW WBG_Fin4Dev and www.youtube.
immunizations for 130-180 million has provided $3 billion to respond com/worldbank.
children, and safe childbirth for up to crises and emergencies in 26 IDA
to 20 million women through the
provision of skilled health personnel.
countries across five regions. CRW
funds were provided in addition to
From 1960-2017,
Some 45 million people will benefit
from access to clean water and
the countries’ regular IDA allocation.
IDA provided
$345 billion for
more than 300 million children are IDA’s operational work is
expected to benefit from the training complemented by analytical studies
investments in
of 9-10 million teachers. that support the design of policies
to reduce poverty. IDA advises
Many of the issues developing governments on ways to broaden the
countries face do not respect base of economic growth and protect 113 countries.
borders. By helping address these the poor from economic shocks.
problems, IDA supports security,
IDA also coordinates donor
#EndPoverty
environmental and health concerns,
and works to prevent these threats assistance to provide relief for poor
countries that cannot manage their
#IDAWorks
from becoming global issues.
IDA • The World Bank’s Fund for the Poorest • 5
HOW DOES IDA WORK?
IDA is overseen by its 173 held over the course of one year. of $75 billion to finance projects
In addition to officials from the now over the three-year period ending
shareholder countries, 50+ donor governments (known as June 30, 2020. IDA18 introduced the
which comprise the Board “IDA Deputies”), representatives of
borrowing member countries are
most radical transformation of IDA’s
financial model since its inception
of Governors. The day- invited to participate to help ensure in 1960. For the first time, IDA will
that IDA’s policy and financing leverage its equity by blending
to-day development frameworks are responsive to donor contributions with IDA’s own
work of IDA is managed country needs. Policy papers resources and funds raised through
discussed during the replenishment debt markets.
by Bank operational negotiations are disclosed to the
staff, governments, and public, and the draft replenishment
implementing agencies.
agreement is posted on the web
for public comment prior to the last
IDA doubled its
replenishment meeting. IDA staff
also engages with civil society funding for fragile
IDA has historically been funded
largely by contributions from the
governments of its member countries
organizations (CSOs), foundations
and think tanks around the world on and conflict-affected
countries in IDA18.
an ongoing basis.
(see box on IDA contributors).
Donors meet every three years The most recent replenishment
to replenish IDA resources and
review its policy framework. The
of IDA’s resources—the 18th #Fragility
replenishment (IDA18)—was
replenishment process typically
consists of four formal meetings
finalized in December 2016,
resulting in a record replenishment
#PostConflict
IDA • The World Bank’s Fund for the Poorest • 6The financing package offers • Relative poverty defined as GNI This assessment and portfolio
exceptional value for money—with per capita must be below an performance together constitute the
every $1 in partner contributions established threshold (updated IDA Country Performance Rating. In
generating about $3 in spending annually). In fiscal year 2018, this addition to the rating, population and
authority—and is one of the was $1,165. per capita income also determine
most concrete and significant IDA allocations. These ratings are
commitments to date to scale up • Lack creditworthiness to borrow disclosed on IDA’s website: http://
financing to achieve the Sustainable on market terms and therefore ida.worldbank.org.
Development Goals. have a need for concessional
resources to finance the Lending terms. IDA offers a range
How IDA funds are allocated. country’s development program. of financing products—from grants to
IDA borrowers have very significant loans on IBRD terms—that take into
needs for concessional funds. But Countries are then assessed to account the variations in economic
the amount of funds available, determine how well they implement and social development of IDA
which is fixed once contributions are policies that promote economic countries. The latest lending terms
pledged by donor governments, is growth and poverty reduction. can be found at http://ida.worldbank.
below what countries need. This is done through the Country org/financing.
Policy and Institutional Assessment.
IDA must therefore make decisions
about how to allocate scarce
resources among eligible countries.
(See box on borrowers.) Allocation
In 2016, IDA placed in the highest
decisions are based on several
criteria, including countries’ income
category in the Aid Transparency Index
levels and performance record in
managing their economies and
for the second consecutive year.
ongoing IDA projects.
#OpenDev #AidEffectiveness
#EndPoverty
To be eligible for funds, countries
must first meet the following criteria:
IDA • The World Bank’s Fund for the Poorest • 7IDA Borrowers
Seventy-five countries are creditworthiness needed to
currently eligible to receive borrow from IBRD.
IDA resources. Eligibility for
IDA support depends first Some countries, such as
and foremost on a country’s Nigeria and Pakistan, are IDA-
relative poverty, defined eligible based on per capita
as gross national income income levels, but are also
(GNI) per capita below an creditworthy for some IBRD
established threshold. borrowing. They are referred
to as “blend” countries.
IDA also supports a number
of countries, including several See the list of IDA borrowers
small island economies, at http://ida.worldbank.org/
which are above the about/borrowing-countries.
operational cutoff but lack the
IDA Contributors
Despite difficult circumstances contributions. Contributions
in many countries, the from first-time contributors
global community agreed in and from former IDA
December 2016 to accelerate borrowing countries provided
the fight to end extreme a welcome addition to the
poverty through a record overall financing pool. These
financing commitment. This is contributions underscore
testament to our development the increasing role emerging
partners’ belief that an economies are playing in
investment in the future of the development of poorer
the poorest countries is an countries.
investment in the future of all
countries. As in past replenishments, the
World Bank Group contributed
The record outcome reflects its own resources to IDA,
the substantial joint efforts with IBRD and IFC providing
of more than 50 traditional, more than $600 million. The
emerging, and new partners replenishment also included
to stretch their contributions contributions by IDA client
(as of March 2017), as well countries and graduates
as the endorsement of IDA’s through credit reflows,
new hybrid financial model. hardening of terms, and credit
G7 countries accounted for repayment accelerations.
69 percent of grant equivalent
IDA • The World Bank’s Fund for the Poorest • 8HOW DO WE KNOW By the Numbers
Key IDA achievements from 2011-2017
IDA WORKS?
72
Since 2002, IDA has been The other two capture elements
measuring its role in helping of performance against agreed
countries grow and reduce poverty
and informing donors about the
performance standards. The
four tiers are: (1) IDA Countries’
MILLION
effectiveness of their contributions. Progress; (2) IDA-Supported People received access to an
The Results Measurement System Development Results; (3) IDA improved water source
(RMS) uses an integrated results Operational Effectiveness; and (4)
and performance framework to IDA Organizational Effectiveness.
show aggregated results across IDA
countries. It also shows whether The RMS supplements the more-
IDA is managing its operations and detailed project, country, and sector
services effectively and is functioning results data previously available and
602
efficiently. complements qualitative overviews
conducted at the country, sector,
The RMS framework groups thematic, and project levels.
indicators into four tiers. The first MILLION
two tiers track aggregate country
development results and IDA’s
People received access to essential
contribution to these results. health services
THE PATH AHEAD FOR IDA
Today’s fiscal environment more public and private sector A new IDA18 IFC-MIGA Private
presents challenges for all those capital in support of the SDGs. Sector Window will leverage $2.5
involved in development—from billion of IDA’s capital to mobilize at
borrowing countries to donors to As part of our efforts to stretch least $6-8 billion in additional private
CSOs. While the new Sustainable WBG resources to meet the needs sector investments in the poorest
Development Goals present a critical of developing countries, IDA has and most fragile markets over the
opportunity to end extreme poverty, adopted a new hybrid financial next three years. The “window”
the scope and complexity of the model. For the first time, IDA will will de-risk investments typically
challenge bring to light the depth of leverage its equity by blending donor considered too risky, but with a
commitment and financing needed to contributions with internal resources potentially strong development
meet the goals. And while a number and funds raised through debt impact.
of countries are expected to exceed markets. The financing package will
IDA’s per capita income threshold help the world’s poorest countries These innovations reflect IDA’s
in the next decade, it is also clear grow, create opportunities for people, efforts to evolve in the face of
that these countries will continue to and make themselves more resilient the ever-changing development
be home to millions of poor people to shocks and crises. finance landscape. We are
who will still need extensive support, continuously engaged with donor
particularly during the transition
Underpinned by strong donor and borrower countries in exploring
support, the new financing model is ways to address issues such
period from concessional to harder
allowing IDA to increase financing as IDA’s financial sustainability,
lending terms.
for all eligible countries, double country fragility, and other frontier
While the development finance financing for countries affected by development issues. The challenge
landscape has experienced fragility and conflict (to more than is to keep the world, and increasingly
significant changes, official $14 billion), and provide $2 billion the private sector, engaged in the
development assistance will remain for activities supporting refugees global aspiration to end extreme
a key source of financing for IDA and their host communities. It will poverty.
clients, and grant contributions will also provide additional resources for
remain central to the IDA model. crisis preparedness and response,
But making smarter use of this pandemic preparedness, and
concessional finance is essential disaster risk management.
for catalyzing and leveraging much
IDA • The World Bank’s Fund for the Poorest • 9IDA helps countries transition from crisis and
fragility to stability, pooling and scaling up
donor efforts for impact. #CrisisResponse
IDA • The World Bank’s Fund for the Poorest • 10WHY IDA?
The International Bank for Reconstruction and Development, better known as the
World Bank, was established in 1944 to help Europe recover from the devastation
of World War II.
The success of that enterprise led water, electricity, and toilets to • Equally, a 2014 assessment
the Bank, within a few years, to turn hundreds of millions of poor by the Center for Global
its attention to developing countries. people. Development and the Brookings
By the 1950s, it became clear that Institution named IDA one of
the poorest developing countries • IDA makes the world a better the international community’s
needed softer terms than those place for girls and women. IDA top performing providers of
that could be offered by the Bank, works to reverse millennia of development assistance, citing
so they could afford to borrow the gender discrimination by getting IDA’s low administrative costs,
capital they needed to grow. This led girls to school, helping women more predictable aid flows, and
to the creation of IDA in 1960. access financing to start small large project size relative to other
businesses, and ultimately donors.
Today, IDA is recognized as a global helping to improve the economic
institution with a transformative prospects of families and • And a 2015 survey of policy
effect that individual national donors communities. makers from 126 low- and
cannot match. middle-income countries by
• Working with the World Bank AidData ranked the World Bank
• IDA provides leadership on global Group, IDA brings an integrated 1st out of 56 bilateral donors
challenges. From its support for approach to development. IDA and multilateral institutions on
climate resilience to the creation helps create environments where its agenda-setting influence
of jobs to get former combatants change can flourish and where in developing countries. The
back into society, IDA rallies the private sector can jumpstart report cites the World Bank as
others on tough issues for the investment. “punching above its weight” on
common good and helps make value for money.
the world more secure. • IDA is also a global leader in
transparency and undergoes In a climate where donor finances
• IDA is transformational. IDA the toughest independent are stretched, there is even more
helps countries develop solutions evaluations of any international need for donors to make greater and
that have literally reshaped the organization. For example, IDA better use of multilateral channels.
development landscape—from placed in the highest category The leader among those channels
its history-changing agriculture in the 2016 Aid Transparency is IDA.
solutions for millions of South Index for the second consecutive
Asians who faced starvation in year—ranking highest among
the 1970s to its pioneering work multilateral development banks.
in the areas of debt relief and the
phase-out of leaded gasoline.
• IDA is there for the long haul.
IDA stays in a country after the
cameras leave, emphasizing
In Nigeria, 55 million children were
long-term growth and capability
to make sure results are
immunized against polio in 2015,
sustained.
a 98 percent increase over 2014.
•
#EndPoverty #IDAWorks
When the poorest are ignored
because they’re not profitable,
IDA delivers. IDA provides dignity
and quality of life, bringing clean
IDA • The World Bank’s Fund for the Poorest • 11The World Bank 1818 H Street, N.W. Washington, D.C. 20433 USA ida.worldbank.org www.facebook.com/ida.wbg www.twitter.com/WBG_Fin4Dev www.youtube.com/worldbank
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