International Development Association (IDA)
The International Development Association (IDA) is the part of the World Bank that helps the world’s poorest countries. Established in 1960, 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 complements the World Bank’s original lending arm—the International Bank for Reconstruction and Development (IBRD). IDA supports a range of development activities that pave the way toward equality, economic growth, job creation, higher incomes, and better living conditions. IDA is one of the largest sources of assistance for the world’s 75 poorest countries and is the single largest source of donor funds for basic social services in these countries.
IDA lends money on concessional terms. This means that IDA credits have a zero or very low interest charge and repayments are stretched over 30 to 40 years. More than half of IDA countries receive all, or half, of their IDA resources on grant terms, which carry no repayments at all. These grants are targeted to the low-income countries at higher risk of debt distress.
As of April 2023, the World Bank has an environment portfolio of 137 projects worth $13.3 billion. Over the last decade, the World Bank has emerged as one of the leading multilateral financiers for protecting biodiversity, supporting sustainable forest management and good stewardship of our oceans, and combating wildlife crime. Recent IDA-funded projects related to forests have focused on improving sustainable management of forests and protected areas and boosting community livelihoods through forestry value chains and agroforestry.
Financing Instrument: Loans, Technical Assistance, Guarantees, Grants, Debt Relief
Project scale: In fiscal year 2022, the World Bank’s active portfolio consisted of 127 projects and a total net investment on forest-related issues of $7.0 billion dollars (average project size $97M). Funding from the IDA represents 45% of the 2022 portfolio.
Applicable geographical regions/country groups: Global
Recipient categories: Governments
For a country to access IDA resources, it must be in a situation of relative poverty as indicated by its per capita income falling below the IDA operational cut-off, $1,255 in FY23, and/or lack creditworthiness for IBRD borrowing. 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 financing 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 38-year and 30-year maturities respectively. Small states receive IDA financing on small economy terms with 40-year maturity.
IDA's 75 eligible recipients have very significant needs for concessional funds. But the amount of funds available, which is fixed once contributions are pledged by donor governments, tends to be well below the countries' needs. IDA, therefore, must allocate scarce resources among eligible countries. This is primarily done on the basis of recipients' policy performance and institutional capacity in order to concentrate resources where they are likely to be most helpful in reducing poverty.
Country allocations that provide unearmarked support to eligible countries serve as the foundation for IDA’s engagement. The rest of IDA’s support in provided through a number of financing windows dedicated to addressing specific priority areas.
Last updated: 6 September 2023