International Development Association – IDA

#IDA is written in threedimensional capital letters.
Since 1960, IDA has transformed societies and lifted millions out of poverty. © Simone D. McCourtie / World Bank

The International Development Association (IDA) is the part of the World Bank Group (WBG) that helps the world's 74 poorest countries end extreme poverty and build shared prosperity in a sustainable manner. It aims to reduce poverty by providing financial resources that boost economic growth, strengthen governance, reduce inequalities, and improve people’s living conditions. As a donor and through an active participation, Switzerland plays an important role in shaping the IDA’s priorities.

IDA is one of the largest sources of assistance for the world’s poorest countries. It provides support for health and education, climate change, infrastructure and agriculture, and economic and institutional development. It advises governments on programmes to achieve these goals. To finance such programmes, it issues loans and grants and provides considerable debt relief. IDA’s operational work is complemented by analytical studies that support the design of policies to reduce poverty.

Donor countries including Switzerland replenish the resources of the IDA every three years. These replenishment negotiations are an opportunity to discuss the strategic and operational orientation of the fund. 

Background: Adressing financial needs of developing countries

IDA addresses challenges such as building resilience to climate change, working in fragile and conflict-affected countries, improving gender equality and helping countries prepare for and respond to future crises. It lends money on concessional terms, meaning its loans have a zero or very low interest charge and repayments are stretched over 30 or more years, including a 5 to 10-year grace period.

With regard to development finance, the WBG, and IDA in particular, is the most influential multilateral organization. It has the largest potential to address the need for financial resources demanded by the 2030 Agenda for Sustainable Development.

IDA’s aims: The five special themes of the IDA19 replenishment

The replenishment negotiations for the current funding cycle 2020-2023, known as IDA19, assembled a record USD 82 billion financing package. This was possible due to an adjustment of the IDA’s financing model introduced under IDA18. Under this model, IDA was allowed for the first time to leverage its balance sheet on the international capital markets. This new business model answers the call of the Addis Ababa Action Agenda for multilateral development banks to maximize their resources and find innovative ways to finance the 2030 Agenda for Sustainable Development. 

IDA19 places a special emphasis on five thematic areas: climate; jobs and economic transformation; fragility, conflict & violence; governance and institutions; and gender. 

The IDA19 financing package includes:

  • A significant increase of resources for fragile countries (USD 18.7 billion), including targeted support to fragile countries to address and prevent conflict risk;
  • Increased financing for regional programs to expand regional integration and infrastructure (USD 7.6 billion);
  • A window for refugees and their IDA host governments (USD 2.2 billion)
  • Financing for crisis response, including more recently support for early response to slow-onset crises like food insecurity (USD 2.5 billion)
  • A Private Sector Window to mobilize private investment in IDA countries (USD 2.5 billion)
  • Non-concessional financing for lower risk IDA countries for scaling up successful projects (USD 5.7 billion) 

The five special themes of IDA19 correspond closely to Switzerland’s development priorities defined in Switzerland's international cooperation strategy 2021-2024.

How the World Bank is helping developing countries to cope with the COVID-19 crisis

The World Bank Group is a key partner for developing countries in addressing the health, economic and social impacts of the pandemic. It moved quickly in response to the crisis. As early as mid-March 2020, it adopted an initial emergency relief package worth USD 14 billion. This helped developing countries to contain the pandemic and strengthen their healthcare systems, and provided emergency loans to companies to protect jobs. The World Bank committed USD 155 billion until mid-2021 to help countries address the medium-term impacts, which included over USD 50 billion from the International Development Association (IDA) alone. These funds will be used to save lives, strengthen healthcare systems, carry out vaccination campaigns, keep poor and vulnerable people from falling back into extreme poverty, support jobs and businesses, and promote reforms to rebuild sustainable and resilient economies. This financial assistance is accompanied by the World Bank's technical knowledge and experience.

Measuring results

IDA has been a leader in holding itself accountable for the aid effectiveness of its operations. In the 2020 Aid Transparency Index, it ranked second among the most important development organizations; since 2014, it has been ranked in the highest category. The IDA Results Measurement System is a robust accountability and management framework that has contributed significantly to results monitoring and learning at all levels. For IDA19, policy measures and performance targets to support IDA countries have been revised to more closely align with the Sustainable Development Goals. IDA is also committed to strengthening data collection and statistical capacity at the country level in the years ahead.

Results of IDA’s activities

Switzerland’s commitment

Switzerland has been a member of IDA since 1992. Thanks to IDA’s financial strength and expertise in addressing poverty and other global issues, the Swiss contribution to IDA is an important complement of Swiss bilateral aid. As a donor and through an active participation,  Switzerland has pushed successfully for IDA to make a focused contribution toward the implementation and results monitoring of the 2030 Agenda, improve conditions for the private sector, and cooperate more closely with other development actors, such as the UN, especially in fragile contexts.

Additional Information