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Last Updated: February 2007
INTERNATIONAL DEVELOPMENT ASSOCIATION: What is IDA?

The International Development Asso- ciation (IDA) is the part of the World Bank that helps the world’s poorest countries. Established in 1960, IDA aims to reduce poverty by providing interest-free loans and grants for programs that boost economic growth, reduce inequalities and improve people’s living conditions.

The International Development Association (IDA) is the part of the World Bank that helps the world’s poorest countries.

IDA complements the World Bank’s other lending arm—the International Bank for Reconstruction and Development (IBRD)—which serves middle-income countries with capital investment and advisory services. IBRD and IDA share the same staff and headquarters and evaluate projects with the same rigorous standards.

IDA is one of the largest sources of assistance for the world’s 78 poorest countries, 39 of which are in Africa. It is the single largest source of donor funds for basic social services in the poorest countries.

IDA lends money (known as credits) on concessional terms. This means that IDA credits have no interest charge and repayments are stretched over 35 to 40 years, including a 10-year grace period.

Since its inception, IDA credits and grants have totaled US$161 billion, averaging US$7–9 billion a year in recent years and directing the largest share, about 50 percent, to Africa.

IDA At Work

A retrospective look at what countries and donors have achieved through IDA in the last decade. Enter Here

In Armenia, the rehabilitation of 74 of the 87 dams in the country is improving efficiency and reducing the risk of flooding for over 500,000 people downstream.
In Ghana, the construction of 8,000 classroom blocks and the publishing of 35 million textbooks raised school attendance and outcomes.
In Sierra Leone, IDA-financed recovery programs helped consolidate the peace and deliver tangible dividends to the population.
In Vietnam, bringing electricity to 2.7 million people has transformed rural communities.

Learn more

IDA Borrowers

Eligibility for IDA support depends first and foremost on a country’s relative poverty, defined as GNI per capita below an established threshold and updated annually (in fiscal year 2009: US$1,095).

IDA also supports some countries, including several small island economies, which are above the operational cutoff but lack the creditworthiness needed to borrow from IBRD.

Some countries, such as India, Indonesia and Pakistan, are IDA-eligible based on per capita income levels, but are also creditworthy for some IBRD borrowing. They are referred to as “blend” countries.

Seventy-eigth countriesare currently eligible to borrow from IDA. Together, these countries are home to 2.5 billion people, half of the total population of the developing world. An estimated 1.5 billion people there survive on incomes of US$2 or less a day.

FY06 Top Ten IDA Borrowers

($million)

Pakistan1183
Vietnam768
Ethiopia505
India500
Bangladesh462
Nigeria422
Congo (DRC)365
Ghana355
Afghanistan240

New IDA Lending by Region:

Sub-Saharan Africa..............50% South Asia............................27% East Asia/ Pacific..................11% Europe/ Central Asia...............5% Middle East/ North Africa........4% Latin America/ Caribbean.......3%

New IDA Lending by Sector:

Social sector........................28% Public admin and law...........24% Industry...............................22% Infrastructure......................15% Agriculture..........................11%

New IDA Lending by Region

IDA Lending

IDA credits have maturities of 20, 35 or 40 years with a 10-year grace period before repayments of principal begins. IDA funds are allocated to the borrowing countries in relation to their income levels and record of success in managing their economies and their ongoing IDA projects. There is no interest charge, but credits do carry a small service charge, currently 0.75 percent on funds paid out. Current Terms of IDA Lending

In fiscal year 2006 (which ended June 30, 2006), IDA commitments totaled US$9.5 billion. New commitments in FY06 comprised 167 new operations. Since 1960, IDA has lent US$170 billion to 108 countries. Annual lending figures have increased steadily and averaged about US$9.1 billion over the last three years.

Loans address primary education, basic health services, clean water and sanitation, environmental safeguards, business climate improvements, infrastructure and institutional reforms. These projects pave the way toward economic growth, job creation, higher incomes and better living conditions. Explore IDA Projects

IDA emphasizes broad-based growth, including:
- Sound economic policies, rural development, private business and sustainable environmental practices
- Investment in people, in education and health, especially in the struggle against HIV/AIDS, malaria and TB
- Expansion of borrower capacity to provide basic services and ensure accountability for public resources
- Recovery from civil strife, armed conflict and natural disaster
- Promotion of trade and regional integration

IDA carries out analytical studies to build the knowledge base that allows intelligent design of policies to reduce poverty. IDA advises governments on ways to broaden the base of economic growth and protect the poor from economic shocks.

IDA also coordinates donor assistance to provide relief for poor countries that cannot manage their debt-service burden. IDA has developed a system for allocating grants based on countries’ risk of debt distress, designed to help countries ensure debt sustainability.

IDA Funding

While the IBRD raises most of its funds on the world's financial markets, IDA is funded largely by contributions from the governments of the richer member countries. Additional funds come from IBRD's income and from borrowers' repayments of earlier IDA credits.

IDA Replenishments
Donors get together every three years to replenish IDA funds. Donor contributions account for about 60% of the US$41.6 billion in the IDA15 replenishment, which finances projects over the three-year period ending June 30, 2011.

The largest pledges to IDA15 were made by the United Kingdom, the United States, Japan, Germany, France, Canada, Italy and Spain, but less wealthy nations also contribute to IDA. IDA Donors and Partners

Funding PDFs

Download IconIDA Subscriptions and Contributions PDF

Download IconDonor Contributions to IDA15 Replenishment PDF

IDA History

The International Bank for Reconstruction and Development (IBRD), 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 the Bank, within a few years, to turn its attention to the developing countries. By the 1950s, it became clear that the poorest developing countries needed softer terms than those that could be offered by the Bank, so they could afford to borrow the capital they needed to grow.

With the United States taking the initiative, a group of the Bank’s member countries decided to set up an agency that could lend to the poorest countries on the most favorable terms possible. They called the agency the "International Development Association." Its founders saw IDA as a way for the "haves" of the world to help the "have-nots." But they also wanted IDA to be run with the discipline of a bank. For this reason, US President Dwight D. Eisenhower proposed, and other countries agreed, that IDA should be part of the World Bank.

IDA's Articles of Agreementbecame effective in 1960. The first IDA loans, known as credits, were approved in 1961 to Chile, Honduras, India and Sudan.

Thirty-two countries have graduated from IDA throughout its history, ceasing to borrow from the Association. Some of these countries have since "reverse graduated," or reentered IDA. List of IDA Graduates




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