Additional funding for the International Development Association (IDA) for the development of the poorest countries
Press release 285/2007
14 December 2007
The 15th Replenishment of the World Bank’s International Development Association (IDA) was finalised in Berlin on 13-14 December. The negotiations were attended by representatives of 45 donor countries and delegates of loan recipient countries. For instance, China and the Baltic Countries have joined the organisation as new donors.
In all, the replenishment amounted to approximately EUR 30.6 million. Finland will increase its financing and contribute EUR 200 million for the replenishment. At the same time, Finland’s share of the financing provided by donors will rise to 0.9 per cent. Combined, the EU countries account for approximately 60 per cent of the contributions. During the new replenishment period, the support provided through the IDA will increase by 27 per cent as compared to the previous replenishment. Together with other donor countries, Finland emphasises that it is important to keep the foundations of the IDA financing solid and stable, including also coverage for expenses caused by international debt reliefs and climate change.
During the negotiations, agreement was made about the principles of how the IDA should be used. The IDA is considered to play an important role as part of the international assistance architecture as well as a provider of financing and a source of expertise and political support. Provision of loans on concessional terms in the poorest countries is the main focus of IDA’s operations, and the Sub-Saharan Africa is playing an ever-stronger role as IDA’s first geographical priority area.
During the forthcoming replenishment period, 52 per cent of IDA’s funding will be targeted to Africa. The IDA’s operations are based on respecting the development plans the poorest countries have made for themselves, acknowledgement of the local operating environment, and strict monitoring of performance and effectiveness. The IDA’s work for promotion of debt sustainability and development of national debt administration in loan recipient countries are also among key operations.
Furthermore, decisions were made at the negotiations about securing the operation of IDA in such fragile states where its presence brings added value or complementary benefits, as well as about relief of outstanding debts for countries recuperating from crises through a mechanism to be established for the purpose.
The IDA’s role in adaptation to climate change, securing access to energy, and availability of clean energy will grow significantly during the current replenishment period. The IDA is especially well suited for combining the work related to climate change to practical poverty reduction and development work done at the country level.
By supporting the goals of the IDA and its replenishment, Finland fulfils its development policy programme principle of environmentally, economically and socially sustainable development for reducing poverty.
Additional information: Director Pekka Hukka, Unit for Development Financing Institutions, Ministry for Foreign Affairs, tel. +358 9 1605 6323, and Counsellor Leena Viljanen, tel. +358 9 1605 6351, and the website of the World Bank Group at www.worldbank.org(Link to another website.) (Opens New Window)