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Boosting the impact of the world’s largest source of concessional finance

Dirk Reinermann and
Dirk Reinermann Director of the IDA Resource Mobilization and IBRD Corporate Finance, Development Finance - World Bank
Paloma Anos Casero
Paloma Anos Casero Director for Strategy, Risk, Results, and Learning in Operations Policy and Country Services - World Bank

October 18, 2024


  • The World Bank’s International Development Association (IDA) replenishment cycle occurs every three years and drives significant development results in the world’s poorest countries.
  • IDA is the largest source of concessional finance for developing countries, leveraging donor contributions to deliver 3.5 times more development finance.
  • The IDA21 policy package focuses on ambition, reshaped policy architecture, stronger commitments, and selectivity and simplification.
  • Policy commitments in IDA21 span nine thematic areas, with examples of evolved commitments in gender equality, climate resilience, and statistical capacity.
  • Reporting and accountability mechanisms, such as the Scorecard, will track IDA21’s progress, with a strong pledging session in December being crucial.
Collage of various sectors
Image credit: metamorworks/Shutterstock
Editor's note:

The co-authors are affiliated with the World Bank and are members of the IDA21 team.

The World Bank’s International Development Association (IDA) replenishment cycle is a process that occurs every three years. During every replenishment cycle, IDA—the Bank’s fund for low-income countries—works with groups around the world to co-create this policy package, which provides the basis for translating its financing into development results. This matters for the 75 poorest countries of the world where IDA resources make a difference in people’s lives by, for example, providing millions of children with life-saving vaccines, helping communities adapt to the ravages of a fast-changing climate, and building the policy and institutions of governments to sustain the improvements.

As the largest source of concessional finance for developing countries, a lot of thinking goes into developing the ambition and priorities of IDA. Each replenishment sees advancements in shaping not only IDA’s role but also in helping influence the global architecture of concessional financing.

IDA18 represented a significant milestone when IDA went to the capital market to raise money, leverage its balance sheet, and supplement the traditional provision of grant resources by donor partners. This has helped each dollar of donor contribution deliver 3.5 times more development finance than would have been possible through other channels. In other words, if a donor contribution vaccinates one child, IDA can vaccinate 3.5 children with the same level of donor contribution.

The IDA21 policy package has benefitted from inputs from country leaders, policymakers in both recipient and partner countries, and civil society groups.

Four key aspects make the IDA21 policy package a watershed moment: its ambition and stretch, a reshaped policy architecture, the strength and evolution of the commitments, and a focus on selectivity and simplification. Each of these alone would have been a meaningful step forward for one replenishment cycle, but together, they position IDA for greater strength and impact.

First, the stretch. IDA21 will play a key role in supporting the World Bank Group’s (WBG) recently announced corporate targets. Consider electricity access: Africa’s economic transformation will only carry along all its people if it achieves universal electricity access. Reaching 300 million people with electricity access by 2030 is a bold target, several times greater than what has been achieved in recent years across the continent. IDA21 will be instrumental in advancing Mission 300, alongside the broader efforts of the WBG, clients, and partners. And IDA will report on progress toward that ambition through its Scorecard indicators on millions of people reached with improved electricity access.

Second, IDA21 introduces a reshaped policy architecture. Why does this matter? The policy architecture sets the priorities for each replenishment, guides IDA’s country-driven approach, and holds IDA accountable for its commitments. The IDA21 policy architecture emphasizes addressing the binding constraints to achieving development outcomes (for example, utility reforms to deliver greater electricity access), instead of tracking processes and inputs. It is also more closely anchored in the ongoing WBG evolution process. As the first replenishment since the WBG’s evolution, IDA21 stands to benefit from and significantly contribute to delivering on the Better Bank.

Third, the IDA21 Policy Commitments (PCs) demonstrate both greater strength and the evolution of priorities over time. Past IDA replenishments have only included policy commitments in four or five identified special themes/cross-cutting issues. IDA21 has PCs in all nine thematic areas with a line of sight to all 22 WBG Scorecard indicators—demonstrating a much wider spread. The strength of the policy package does not come from simply matching the number of policy commitments across cycles but in their growing depth and maturity. Here are three examples to illustrate that evolution.

  • In IDA16 and IDA17, gender equality commitments centered on ensuring WBG country strategies and IDA operations were gender-informed. IDA21 is committed to fully implementing an ambitious “WBG Gender Strategy in all IDA countries, addressing priority challenges like gender-based violence, sexual and reproductive health, and women’s economic participation.
  • On climate, IDA18 focused on screening IDA operations for climate and developing climate-smart agriculture in 10 countries. Just six years later, IDA21 commits to addressing adaptation and resilience in 50 countries and implementing climate-smart agriculture policies to improve food security in 45 countries.
  • The chronic challenge of weak statistical capacity in IDA countries first appeared a few replenishments ago, with a commitment to analyze the status of country statistical systems in WBG country strategies. Now, IDA21 commits to work in every country where household surveys are older than five years, improving the quality, timeliness, and use of data for policymaking.

Fourth, IDA21 will start to reverse the growing number of country-level actions in its commitments. This selectivity and simplification will enable client governments to focus on implementing operations and policies and delivering results.

The reporting of IDA21 implementation progress across these areas will ensure accountability. The Scorecard will report progress annually on a select set of outcome-oriented indicators, and the IDA21 mid-term review and retrospective reports will bring together progress on all the outcomes and commitments for IDA21. However, a strong pledging session in December remains crucial. First out of the starting blocks is the promising announcement by Denmark on their record contribution to IDA21.

IDA replenishment will be a journey that leaves a tangible impact on people’s lives.

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