The United States has pledged $4 billion over the next three years to support the World Bank’s International Development Association (IDA), an arm focused on aiding vulnerable and low-income countries. The announcement was made by US President Joe Biden, who encouraged other nations to join in contributing to the fund.

In a post on X (formerly Twitter), Biden stated, "This week I joined World Bank President Banga to announce the United States will pledge $4 billion over 3 years to the replenishment of IDA - the arm of the World Bank that supports vulnerable countries. We ask that others join us in stepping up their pledges."

The IDA, established in 1960, is a crucial part of the World Bank, designed to assist low-income countries with grants and low-interest loans. These funds are used to invest in future development and improve living conditions, helping create more prosperous societies.

The IDA is one of the largest sources of financial aid for the world’s 78 low-income nations and serves as the biggest donor for essential social services in these regions. IDA offers concessional terms for its credits, often with zero or very low-interest rates, and repayment periods of 30 to 40 years. Additionally, more than half of the recipient countries receive grants that require no repayment, particularly those at higher risk of debt distress.

The fund is replenished every three years through contributions from member countries. The most recent replenishment, known as IDA20, was finalised in December 2021, securing a record $93 billion financing package for fiscal years 2022-2025.

IDA’s initiatives focus on improving infrastructure, education, healthcare, and other critical sectors in low-income nations, fostering sustainable development. The US contribution marks a significant step in bolstering these efforts, with hopes that other donor countries will follow suit.