Ahead of his visit to Rwanda that is expected to start on Tuesday, the President of World Bank Group, Jim Yong Kim, yesterday announced a record $57 billion towards financing different projects in sub-Saharan Africa over the next three fiscal years.
According to a World Bank statement, the bulk of the financing – $45 billion – will come from the International Development Association (IDA), the World Bank Group’s fund.
The financing for sub-Saharan Africa also will include an estimated $8 billion in private sector investments from the International Finance Corporation (IFC), a private sector arm of the Bank Group, and $4 billion in financing from International Bank for Reconstruction and Development, its non-concessional public sector arm.
In December, development partners agreed to a record $75 billion for IDA, a dramatic increase based on an innovative move to blend donor contributions to IDA with WB internal resources, and with funds raised through capital markets.
Sixty per cent of the IDA financing is expected to go to sub-Saharan Africa, home to more than half of the countries eligible for IDA financing. This funding is available for the period known as IDA18, which runs from July 1 to June 30 2020.
“This represents an unprecedented opportunity to change the development trajectory of the countries in the region,” Kim said in a statement.
“With this commitment, we will work with our clients to substantially expand programs in education, basic health services, clean water and sanitation, agriculture, business climate, infrastructure, and institutional reform.”
The IDA financing for operations in Africa will be critical to addressing roadblocks that prevent the region from reaching its potential. To support countries’ development priorities, scaled-up investments will focus on tackling conflict, fragility, and violence; building resilience to crises including forced displacement, climate change, and pandemics; and reducing gender inequality.
Efforts will also promote governance and institution building, as well as jobs and economic transformation. “This financing will help African countries continue to grow, create opportunities for their citizens, and build resilience to shocks and crises,” Kim said.
While much of the estimated $45 billion in IDA financing will be dedicated to country-specific programmes, significant amounts will be available through special “windows” to finance regional initiatives and transformative projects, support refugees and their host communities, and help countries in the aftermath of crises.
This will be complemented by a newly established Private Sector Window, especially in Africa where many investments go untapped due to lack of capital and perceived risks.
The Private Sector Window will supplement existing instruments of IFC and the Multilateral Investment Guarantee Agency – the Bank Group’s arm that offers political risk insurance and credit enhancement – to spur sound investments through de-risking, blended finance, and local currency lending.
Source: The New Times