Denmark, one of the 52 nations contributing to development initiatives via the World Bank, is taking a stand, calling on other countries to unite in addressing the world’s ‘most pressing development and climate challenges.’
In a significant move, Denmark plans to nearly double its financial commitment to the World Bank’s International Development Association (IDA), which is dedicated to supporting low-income nations.
This robust pledge of DKK 3,300 million (€442.5 million) demonstrates Denmark’s unwavering commitment to global development, marking a remarkable 40% increase from its earlier contributions.
The announcement precedes the IDA’s final 21st replenishment (IDA21) meeting scheduled for December in Seoul, South Korea, where funds are replenished every three years.
Denmark’s commitment aligns with the April calls from African heads of state advocating for an ambitious programme replenishment.
“We aspire to create a prosperous and equitable world,” stated Prime Minister Mette Frederiksen. “This financial pledge underscores Denmark’s resolve to achieve the Sustainable Development Goals and fulfill the Paris Climate Agreement. I am proud to respond to our African partners’ request for increased funding.”
She added, “We invite other nations to collaborate with us, to invest decisively. Together, we can confront the urgent development and climate challenges our world faces.”
Understanding the Program
The IDA works alongside the World Bank’s original lending arm, the International Bank for Reconstruction and Development (IBRD), aiming to alleviate poverty, foster sustainable economic growth, and enhance living conditions for the poorest countries via grants and low-interest loans.
According to the World Bank, about half of the beneficiary countries receive funding in the form of non-repayable grants.
Denmark stands as one of the 52 high and middle-income nations backing this initiative, which also benefits from additional funding raised through capital markets alongside contributions from the World Bank.
The last funding package, revealed in December 2022, totaled $93 billion (€83.5 billion), with $23.5 billion sourced from donor countries. This funding has supported projects in 77 low-income countries working to recover from the COVID-19 pandemic.
Several countries that once benefited from the IDA have now returned as contributors, including China, Indonesia, and Turkey.
Ajay Banga, President of the World Bank Group, remarked, “The brilliance of IDA lies not just in the lifeline it provides to these nations but in its incredible ability to multiply every donor dollar fourfold. It’s an exceptional investment in development.” He added, “Denmark’s commitment will tangibly improve lives.”
Photo credit & article inspired by: Euronews
