Spain Boosts Funding to World Bank for Low-Income Nations

Spain has pledged 400 million euros to the World Bank for low-income countries, marking a significant 37% increase from the previous cycle. Announced by Economy Minister Carlos Cuerpo, this early commitment aims to enhance financing for poverty and inequality reduction, while introducing flexible loan terms for crisis-stricken nations.

On Thursday, Spain unveiled plans to contribute 400 million euros ($433 million) to the World Bank's fund supporting low-income countries, marking a 37% hike from the previous International Development Association funding cycle.

Spanish Economy Minister Carlos Cuerpo announced this commitment during the IMF and World Bank's annual meetings in Washington, emphasizing its significance as an early pledge before the formal pledging conference on December 6. "This crucial step sets a precedent that hopefully others will emulate, significantly boosting financing efforts to combat poverty and inequality," Cuerpo asserted, underscoring Spain's strong confidence in the IDA's capability to propel low-income nation development.

The World Bank's President Ajay Banga aims to surpass the $93 billion replenishment target of December 2021, considering the ambitious goal of reaching $120 billion through increased country commitments. Spain has also incorporated contingency clauses in its official loans, granting countries the option to suspend debt payments during crises like natural disasters, and food or health emergencies.

(With inputs from agencies.)