-- Related Links -- IDA IDA At Work: A retrospective of what IDA has achieved Aid Architecture: An Overview of ODA Trends IDA 15 Replenishment Report

AT A GLANCE:

• Established in 1960, The International Development Association (IDA) aims to reduce poverty by providing mostly interest-free loans (known as credits) 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 provides financial support to the world’s poorest countries. IDA and the International Bank for Reconstruction and Development (IBRD) --the Word Bank's lending arm which serves middle-income countries -- 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 78 poorest countries in the world, 39 of which are in Africa.

• IDA lends money on highly concessional terms. IDA credits have little or no interest charge and repayments for most credits are stretched over 40 years, including a 10-year grace period.  IDA also provides grants to countries at risk of debt distress.

• Since its inception, IDA credits and grants have totaled US$193 billion, reaching US$10–12 billion a year in recent years, and directing the largest share, about 50 percent, to Africa.

IDA Borrowers

• Seventy-eight countries are currently eligible to receive IDA resources.   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: $1,095). Most of the countries eligible for IDA funds have average annual incomes of less than $500 per capita and in many, substantially less.
• 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 and Pakistan, are IDA-eligible based on per capita income levels, but are also creditworthy for some IBRD borrowing. Since they receive funds from both IDA and IBRD, they are referred to as “blend” countries.

IDA Programs

• 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 of 0.75 percent on funds paid out, and variable commitment charges on undisbursed balances.
• In fiscal year 2008 (which ended June 30, 2008), IDA commitments totaled US$11.2 billion, including $ 8.0 billion in credits and $3.2 billion in grants. New commitments in FY08 comprised 199 operations.   Annual commitments volumes have increased steadily, doubling over the past decade.
• 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; and
  • promotion of trade and regional integration.
• IDA carries out analytical studies to build the knowledge base that allows tailored 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 provides $54 billion in debt relief to poor countries: $17 billion under the Heavily Indebted Poor Countries (HIPC) Initiative and $37 billion under the Multilateral Debt Relief Initiative (MDRI).

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 45 of its member countries, including former IDA recipients and middle-income countries, such as China and Egypt.   Additional funds come from World Bank Group net income and from borrowers' repayments of earlier IDA credits.

IDA Replenishments

• Donors get together every three years to replenish IDA funds.   Negotiations for IDA’s 15^th replenishment (IDA15) concluded in December, 2007.   At US$41.7 billion for the next three years, this is IDA’s largest replenishment ever.

• Donors pledged $25.2 billion to IDA15.   This is US$7.5 billion more than in IDA14.  These donor contributions are complemented by US$6.3 billion from prior donor pledges to the Multilateral Debt Relief Initiative (MDRI) and a further US$10.2 from reflows and internal financing from the World Bank Group.

• The World Bank Group has pledged a record US$3.5 billion contribution to the IDA15 replenishment from its income.   Including projected investment income of IDA on this transfer, the overall contribution will be US$3.9 billion.

• IDA15 will provide resources to low-income countries for the July 2008-June 2011 period and will play an important role in supporting IDA-recipient countries in their efforts to achieve the Millennium Development Goals by 2015. 

- ### -

Contact:

Angela Furtado: 202-473-1909

Afurtado@worldbank.org

Updated October 2008