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.

 

FY16 Top 10 Borrowers $ million
Ethiopia 1,862
Vietnam 1,670
Bangladesh 1,557
Pakistan 1,460
Nigeria 1,075
India 1,025
Tanzania    864
Kenya    646
Congo, Dem. Rep.    600
Ghana    500

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 and hard-terms with 38-year and 25-year maturities respectively.

In fiscal year 2016 (which ended June 30, 2016), IDA commitments totaled $16.2 billion (including IDA guarantees), of which 12 percent was provided on grant terms. New commitments in FY16 comprised 161 new operations. Since 1960, IDA has provided $328 billion to 112 countries. Annual commitments have increased steadily and averaged about $19 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
IDA Lending by Sector % of total 1
Infrastructure 36
Social Services 28
Public Admin. and Law 17
Agriculture 10
Industry and Trade  5
Finance   3
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).