World Bank's Bold Funding Shift

The World Bank is revising its lending guidelines to unlock $30 billion in additional capacity over a decade, targeting developing nations to manage climate change and other global crises. The shift includes reducing its equity-to-lending ratio and revising pricing policies to boost lending by $150 billion.

In a significant move, the World Bank announced a change to its lending guidelines, enabling an increase of $30 billion in lending capacity over the coming decade. This initiative is aimed at aiding developing countries to combat climate change and other pressing global challenges. World Bank President Ajay Banga emphasized the strategic importance of this decision.

Banga confirmed the International Bank for Reconstruction and Development (IBRD) would adjust its equity-to-lending ratio to 18%, thereby accepting increased risk. These changes also comprise shifts in pricing policies that anticipate enhancing the World Bank's lending capacity to $150 billion in the next seven to ten years.

Amid pressing global crises such as geopolitical tensions and economic struggles, Banga highlighted the expected job gap for 800 million individuals and reiterated the bank's readiness to adapt further by exploring new financial instruments. The World Bank also aims to increase its International Development Association fund to over $120 billion, requiring significant donor contributions.

(With inputs from agencies.)