(MENAFN) During the spring meetings of the World Bank and International Monetary Fund in Washington, 11 countries made significant commitments totaling over USD11 billion towards innovative financial instruments aimed at addressing pressing global issues such as climate change, pandemics, and other challenges. These pledges represent a substantial boost to the bank's financing capacity, with the aim of mobilizing up to USD70 billion over the next decade.
The voluntary contributions announced at the meetings mark the largest single infusion of funds to strengthen the World Bank's balance sheet since 2022. This milestone underscores a broader shift in the institution's mandate, which expanded beyond poverty alleviation to encompass a wider array of global challenges.
In April 2023, World Bank shareholders supported measures to increase the institution's "financial leverage," thereby enhancing its lending capacity by approximately USD40 billion over a decade. Additionally, the bank implemented reforms to raise the limit on bilateral guarantees, paving the way for an additional USD10 billion in financing over the same period.
The allocation of contributions reflects a collaborative effort among several nations. Belgium, France, Japan, and the United States have pledged support for the investment portfolio guarantee platform. Meanwhile, Britain, Denmark, Germany, Italy, Latvia, the Netherlands, and Norway have committed to financing mixed capital instruments, which function as debt-like instruments to bolster lending capacity.
Notably, Japan has committed to making its inaugural contribution to the newly established "Livable Planet Fund." This initiative seeks contributions from governments, philanthropies, and the private sector to finance projects aimed at energy conversion investments and healthcare delivery. The fund's creation aligns with the World Bank's expanded mission, approved last year, which underscores its role in climate financing and its commitment to creating a world free of poverty on a sustainable planet.
The mobilization of substantial financial resources underscores a collective recognition of the urgency of addressing global challenges. By bolstering the World Bank's financing capacity, these contributions signal a renewed commitment to collaborative action and the pursuit of sustainable development goals on a global scale.
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