27 billion euros in additional funding granted for the International Development Fund

Press Release 63/2005
23 February 2005


The 14th round of negotiations to raise funds for the International Development Association (IDA), known as the IDA14 replenishment negotiations, were concluded in Washington, D.C. on 22 February. The IDA awards concessional loans and grants assistance to the world’s poorest countries.

The IDA14 replenishment round totals approximately 27 billion euros, made up of funds from 40 participating donor countries and repayment of IDA loans. Finland’s financial contribution of 0.6 per cent means an additional financial commitment of 100 million euros. The target growth is a 30 per cent increase in resources over the previous replenishment.

It was agreed during negotiation held in 2004 that the following five main themes will be highlighted in the years 2006–2008: achieving economic growth; improving operational perquisites in the private sector; developing the effectiveness of assistance and a system to measure the results achieved; increasing cooperation with other sources of financing, especially at the country level; and taking into account developing countries’ vulnerability to debt, for instance by increasing the amount and the proportion of grants. The target is for the share of grants during the period to be about 30 per cent.

The IDA supports the efforts of the world’s poorest countries to alleviate poverty, improve living conditions and achieve economic growth. About 50 per cent of activities focus on Africa. From the perspective of the world’s poorest countries, which have only marginal chances of getting credit on market terms, the international development fund is the most important source of resources and its activities, together with other financiers, are crucial in global efforts to achieve the development objectives set. The additional funding will be used to support achievement of the UN Millennium Development Goals and implementation of the decisions reached at the International Conference on Financing for Development in Monterrey and the Development Summit on Sustainable Development in Johannesburg.

Additional information: Pekka Hukka, Head of Unit, Unit for Development Financing Institutions at the Finnish Ministry for Foreign Affairs, mobile tel. +358 40 569 6629, or Counsellor Asko Luukkainen, tel. +358 9 1605 6334