UK announces contribution to International Development Association (IDA), the World Bank's fund for the world's lowest income countries
- UK's boost to World Bank signals "new partnership" between the UK and the Global South and will mobilise billions of dollars in private finance.
- Boost will provide growth and stability around the world in our shared interest, as the UK Government announces pledge and calls on other countries to step up.
- Grants and low-interest loans will tackle root causes of issues facing the UK such as the climate crisis and irregular migration.
The world's lowest-income countries will receive access to billions of dollars in transformative grants and low-interest loans as a result of a new UK investment announced today.
Development Minister Anneliese Dodds today announced that the UK will provide £1.98 billion over three years to the International Development Association (IDA), the World Bank's fund for the world's lowest income countries, to go towards projects promoting economic growth, tackling poverty and addressing the impacts of climate change.
Through a unique funding mechanism, the UK contribution will help to unlock billions of dollars through other sources of finance, including from private markets: for every $1 a country pledges, up to $4 can be spent. This will be funded from the UK's Official Development Assistance (ODA) budget.
IDA is the largest source of grants and low interest loans for low-income and vulnerable countries and the UK's contribution will help the World Bank support more than 1.9 billion people across the globe.
The World Bank's model has seen it provide $93 billion in finance to 75 countries, 39 in Africa, over the last 3 years. In that time, IDA has supported more than 86.5 million children with a better education and 75 million people with new or improved access to electricity, lifting individuals out of poverty and boosting economic growth in recipient countries.
Foreign Secretary David Lammy said:
Growth and stability in lower income countries is firmly in the UK's interest. If we are to grow our economy, tackle the climate crisis and reduce irregular migration, we need to work in partnership with these countries.
IDA's track record shows that it is one of the best ways to do this. I urge other donors to step up at next week's conference.
Minister for Development Anneliese Dodds said:
Britain is back with a voice on the world stage. When we said we would take a new approach to development, built on genuine partnerships and based on respect, we meant it.
Leaders of low-income countries around the world called for stronger IDA contributions and we listened.
We listened because we understand that more growth in IDA countries means stronger global growth, which benefits all of us. This funding will unlock billions to support vital economic growth, changing and saving lives.
Today's announcement is the latest example of the UK's updated and modern approach to development, based on respect, partnership and common interests.
The UK is a strong support of IDA due to its strong track record of working in partnership with recipient countries and delivering sustainable growth. Since 1960, 36 countries have 'graduated' from IDA.
For example, South Korea, formerly a low-income country supported by IDA loans, is today one of the world's wealthiest countries, and will be hosting the IDA donor conference next week.
Anneliese Dodds set out the government's "new approach to development" at a major speech to Chatham House in October. She outlined four key "shifts" needed to modernise the UK's approach to development and restore its world-leading status: partnership, multilateral reform, harnessing UK expertise and growing opportunity for all.
