Financing

IDA funds are allocated to the recipient countries in relation to their income levels and record of success in managing their economies and their ongoing IDA projects. IDA's lending terms are highly concessional, meaning that IDA credits carry no or low interest charges.

 

FY18 Top 10 Borrowers $ million
Ethiopia 3,122
Bangladesh 2,991
Nigeria 2,586
Pakistan 1,948
Kenya 1,280
Côte d'Ivoire    987
Tanzania    955
Uzbekistan    740
Nepal    706
Uganda    640

The lending terms are determined with reference to recipient countries' risk of debt distress, the level of GNI per capita, and creditworthiness for the International Bank for Reconstruction and Development (IBRD) borrowing. Recipients with a high risk of debt distress receive 100 percent of their financial assistance in the form of grants and those with a medium risk of debt distress receive 50 percent in the form of grants. Other recipients receive IDA credits on regular or blend terms with 38-year and 30-year maturities respectively. Small states receive IDA financing on small economy terms with 40-year maturity.

In the fiscal year ending June 30, 2018, IDA commitments totaled $24 billion (including IDA guarantees), of which 21 percent was provided on grant terms. New commitments in FY18 comprised 206 new operations. Since 1960, IDA has provided $369 billion to 113 countries. Annual commitments have increased steadily and averaged about $20 billion over the last three years.

IDA-financed operations address primary education, basic health services, clean water and sanitation, environmental safeguards, business climate improvements, infrastructure and institutional reforms. These projects pave the way toward economic growth, job creation, higher incomes and better living conditions.

IDA emphasizes broad-based growth, including:

  • Sound economic policies, rural development, private business, and sustainable environmental practices
  • Investment in people, in education and health, especially in the struggle against HIV/AIDS, malaria, and TB
  • Expansion of borrower capacity to provide basic services and ensure accountability for public resources
  • Recovery from civil strife, armed conflict, and natural disaster
  • Promotion of trade and regional integration
FY18 IDA Lending by Sector % of total 1
Infrastructure 32
Social Services 30
Public Admin. and Law 21
Industry and Trade   8
Agriculture   6
Finance   2
1 Percentages do not add up to 100% due to rounding

IDA carries out analytical studies to build the knowledge base that allows intelligent design of policies to reduce poverty. IDA advises governments on ways to broaden the base of economic growth and protect the poor from economic shocks.

IDA also coordinates donor assistance to provide relief for poor countries that cannot manage their debt-service burden. IDA has developed a system for allocating grants based on countries’ risk of debt distress, designed to help countries ensure debt obligations are met (debt sustainability).