International Development Association (IDA)

Organizational profile: 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 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-financed operations address primary education, basic health services, clean water and sanitation, environmental safeguards, business climate improvements, infrastructure and institutional reforms. These projects pave the way toward economic growth, job creation, higher incomes and better living conditions.

IDA countries tend to have high exposure and sensitivity to climate shocks, while also exhibiting low adaptive capacity to buffer their economies and communities from climate and disaster risks. For these reasons, climate change is an urgent priority for IDA. IDA helps countries cope with climate change by bringing new solutions—such as better weather data and forecasting, drought resistant crops, pioneering disaster insurance, and cyclone-resistant houses and warning systems. IDA also helps countries mitigate the impacts of climate change by finding innovative ways to harness energy from the sun, wind, and water, to farm with less water and chemicals and with better seeds, and to reduce carbon emissions by helping to make industries more efficient and sustainable. IDA is focused on producing analytic work and providing technical assistance on climate change and disaster risk management. All IDA country strategies are required to incorporate climate and disaster risk into the analysis of a country’s development challenges and priorities.

Financing Instrument: Loans, Technical Assistance, Guarantees, Grants

Project scale: Forest-related projects have ranged from US$2,000,000 to US$200,000,000.

Applicable geographical regions/country groups: Global

Recipient categories: Governments

Eligibility Criteria: IDA funds are allocated to the recipient countries in relation to their income levels and record of success in managing their economies and their ongoing IDA projects. IDA's lending terms are highly concessional, meaning that IDA credits carry no or low interest charges. The lending terms are determined with reference to recipient countries' risk of debt distress, the level of GNI per capita, and creditworthiness for the International Bank for Reconstruction and Development (IBRD) borrowing. 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 40-year and 30-year maturities respectively. Small states receive IDA financing on small economy terms with 40-year maturity.

Application guidelines: The determination of the terms of IDA's assistance, is done as a second step in the IDA allocation process. The first step is to allocate resources according to IDA's Performance-Based Allocations (PBA) system, where the volumes of IDA assistance are determined based on the country's performance and needs.