The International Development Association (IDA) is the part of the World Bank that helps the world’s poorest countries. Established in 1960, IDA aims to reduce poverty by providing loans (called “credits”) and grants for programs that boost economic growth, reduce inequalities, and improve people’s living conditions.
IDA complements the World Bank’s original lending arm—the International Bank for Reconstruction and Development (IBRD). IBRD was established to function as a self-sustaining business, and provides loans and advice to middle-income and credit-worthy countries. IBRD and IDA 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 world’s 75 poorest countries, 39 of which are in Africa, and is the single largest source of donor funds for basic social services in these countries.
IDA lends money on concessional terms. This means that IDA credits have a zero or very low interest charge and repayments are stretched over 25 to 38 years, including a 5- to 10-year grace period. IDA also provides grants to countries at risk of debt distress. In addition to concessional loans and grants, IDA provides significant levels of debt relief through the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI).
In the fiscal year ending June 30, 2016, IDA commitments totaled $16.2 billion, of which 12 percent was provided on grant terms. New commitments in fiscal year 2016 comprised 161 new operations. Since 1960, IDA has provided $328 billion for investments in 112 countries. Annual commitments have increased steadily and averaged about $19 billion over the last three years.