Spain commits 400 million euros to World Bank fund for poorest countries

By David Lawder

Spain on Thursday announced plans for a contribution of 400 million euros ($433 million) to the World Bank's fund for low-income countries, a 37% increase over the previous International Development Association replenishment cycle.

The announcement, made on the sidelines of the IMF and World Bank annual meetings in Washington by Spanish Economy Minister Carlos Cuerpo, marked an early commitment ahead of a Dec. 6 pledging conference.

"This is an important step that we hope others can follow to bolster much-needed financing to fight poverty and inequality," Cuerpo said in a statement, adding that it shows Spain's "belief in IDA's ability to move the needle" for low-income country development.

World Bank President Ajay Banga is aiming for IDA's latest pledge drive, which occurs every three years, to exceed the $93 billion replenishment in December 2021. Banga told Reuters last week that a $120 billion replenishment is possible, but would require some substantial increases in country commitments.

The World Bank said that to free up resources for vulnerable economies, Spain also has added contingency clauses to its official loans that give countries the option to pause debt service payments in the event of natural disasters and food or health crises.