New Facility will also complement international efforts to help Ukraine and Moldova
WASHINGTON, May 18, 2023 ¨Cľ¹ÏÓ°Ôº Board of Executive Directors today approved the recommendation to establish a Crisis Facility for the International Development Association (IDA) to scale up support for the world¡¯s poorest countries to address worsening development challenges due to the overlapping global crises, particularly food insecurity and extreme climate events.
The poorest and most vulnerable have been hit hardest by the global surge in energy and food prices and rising inflation exacerbated by Russia¡¯s invasion of Ukraine. The spillover of the invasion is further worsening the significant setbacks caused by COVID-19 and climate change, especially in Africa and the Middle East.
The Crisis Facility will therefore provide financing to help countries respond to food insecurity, deal with economic shocks, address increasingly frequent and severe natural disasters, and respond to health emergencies and severe disease outbreaks.
¡°The near-term outlook for the poorest countries continues to be very challenging with elevated demand for resources. IDA is working with donor governments and using its leveraging capacity to mobilize additional resources for the Crisis Facility to empower countries to address their increased vulnerabilities,¡± said Akihiko Nishio, World Bank Vice President for Development Finance, who oversees IDA.
For the current IDA20 cycle, which runs from July 2022 to June 2025, two-thirds of the resources allocated for the crisis response window have already been committed within the first year. The Crisis Facility will supplement financing over the remaining two years.
In the spirit of global solidarity, the Crisis Facility will also complement ongoing efforts by multilateral and bilateral partners to finance reconstruction and recovery in Ukraine. It will help address the continuing far-reaching social and economic impacts of the invasion on both Ukraine and neighboring Moldova, which is hosting Ukrainian refugees.
The Crisis Facility will benefit from IDA¡¯s leveraging potential using its balance sheet, multiplying each dollar put in. Donors are expected to pledge their contributions by December 2023 when the Crisis Facility envelope will be announced.
About IDA
ľ¹ÏÓ°Ôº¡¯s International Development Association (IDA) is the largest source of funding for fighting extreme poverty in the world¡¯s 75 poorest and most vulnerable countries. IDA provides grants and zero or low-interest loans to countries for projects and programs that boost economic growth, build resilience, and improve the lives of poor people around the world. Since 1960, IDA has provided about $496 billion for investments in 114 countries.
Last Updated: May 18, 2023
