World Bank seeks grants, new capital to fight global crises
The World Bank COO said on Tuesday that the World Bank will receive more subsidies from member countries while using its balance sheet to boost lending in response to climate change and other global crises. said it will seek new capital.
Financial institutions will seek donor support for a newly created crisis fund for the world’s poorest countries facing overlapping global crises such as extreme weather, Anna Vardy said in an interview.
ANILA, May 23 (Reuters) – The World Bank will press for more grants and new capital from member countries, even as it leverages its balance sheet to scale up lending for responses to climate change and other global crises, its managing director of operations said on Tuesday.
The lender will rally donor support for a newly established crisis facility for the world’s poorest countries that face overlapping global crises, including severe climate events, Anna Bjerde said in an interview.
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“We hope to be able to really conclude and have a very strong interest in funding this by the end of the year,” Bjerde said, adding that multiple billions of dollars were needed for the crisis facility.
That facility sits within the International Development Association (IDA) fund, the World Bank’s fund for the poorest countries. The last replenishment was fast depleted by the pandemic.
COVID-19 pushed many poor countries into debt distress as they were expected to continue servicing their obligations in spite of the massive shock to their finances.
Bjerde is hoping for major progress in courting interest in the facility at the annual meetings of the International Monetary Fund (IMF) and World Bank in Morocco in October.
“We need to really get grants from developed and higher income countries, rich countries, to provide resource transfers to the lower income countries,” she said.
The World Bank, whose 25-member executive board on May 3 elected a new president, wants to increase lending to ensure it can better tackle issues such as climate change, pandemics and conflict.
“We need to continuously work on what we call under the evolution roadmap – a better bank but also a bigger bank,” Bjerde said.
The World Bank’s “evolution road map” calls on its management to develop specific proposals to change its mission, operating model and financial capacity.