The International Development Association (IDA) is the part of the World Bank that helps the world’s poorest countries. Overseen by 173 shareholder nations, IDA aims to reduce poverty by providing zero to low-interest 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 poor 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 74 poorest countries and is the single largest source of donor funds for basic social services in these countries. IDA lends money on concessional terms. 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 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, 2021, IDA commitments totaled $36 billion, with about 70 percent going to Africa. This includes 297 new projects. Furthermore, IDA’s support is part of the broader $160 billion World Bank Group response to the COVID-19 pandemic over a 15-month period ending June 2021. It includes $50-55 billion in low-interest credits and grants focused on saving lives, protecting the poor and vulnerable, creating jobs, saving businesses, and building a more resilient recovery. Since 1960, IDA has provided $458 billion for investments in 114 countries. Annual commitments have increased steadily and averaged about $29.4 billion over the last three years (FY19-FY21).
IDA is a multi-issue institution, supporting a range of development activities that pave the way toward equality, economic growth, job creation, higher incomes, and better living conditions. IDA's work covers primary education, basic health services, clean water and sanitation, agriculture, business climate improvements, infrastructure, and institutional reforms.