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Multilateral Banks

World Bank Group

The World Bank Group is Australia's largest multilateral partner and is the world's largest development organisation. The World Bank Group consists of five:

  • the International Bank for Reconstruction and Development (IBRD) lends to governments of middle-income and creditworthy low-income and most vulnerable countries
  • the International Development Association (IDA) provides interest-free loans – called credits – and grants to governments of the world's poorest countries
  • the International Finance Corporation (IFC) provides loans, equity and advisory services to stimulate private sector investment in developing countries
  • the Multilateral Investment Guarantee Agency (MIGA) offers political risk insurance (guarantees) to investors and lenders
  • the International Centre for Settlement of Investment Disputes (ICSID) provides international facilities for conciliation and arbitration of investment disputes.

The World Bank Group is able to leverage significant financial resources and expertise for sustainable development and poverty reduction. The World Bank Group is an unparalleled source of development analysis and specialist program implementation, and a leading forum for global development policy.

Australia's membership of, and financial contributions to, the World Bank Group provide Australia with the opportunity to influence policies and priorities. An ongoing objective of our relationship is to ensure that the activities of the World Bank Group recognise and actively target key development priorities in the Indo–Pacific region.

The Australian Government supports economic development in the Indo-Pacific region through contributions to the World Bank's International Development Association (IDA). The IDA fund is the largest pool of concessional finance in the world, providing grants and highly concessional loans to 74 low-income countries, including 20 in Indo-Pacific. It is closely aligned with Australia's aid program priorities: promoting private sector development; boosting women's economic empowerment; effective governance; supporting fragile states; and tackling climate change.

While IDA is usually replenished every three years (the last being IDA19 (2020-21 to 2022-23)), donors agreed in April 2021 to bring forward the IDA20 replenishment by one year, ensuring additional resources were available for COVID-19 recovery. The IDA20 cycle will apply for the period 2022-23 to 2024-25.

Pledging for the World Bank IDA20 replenishment (December 2021) resulted in a record USD93 billion replenishment. The accelerated IDA20 replenishment, combined with the compressed two-year IDA19, represents a 20 per cent increase relative to projected pre-pandemic funding levels.

Australia maintained the same burden share pledged at IDA19. Our total contribution towards the IDA20 replenishment of AUD488.01 million[1] will be drawn from Australia's development program over a nine-year period. As part of the replenishment process, Australia updated its support for the Multilateral Debt Relief Initiative, in line with ongoing commitments.

IDA20 will deliver strong allocations for the Indo-Pacific and rapid disbursements to support COVID-19 pandemic response, as well as stronger focus on climate co-benefits that will assist us to meet our climate finance pledges. The IDA20 policy package aligns well with Australia’s development objectives, including on human capital (vaccines, education, sexual and reproductive health rights), gender, disability inclusion, and private sector-led development.

Australia also partners with the World Bank Group on specific development programs which support Australia's development policy priorities. Over the last five years, Australia’s annual average contributions to the WBG (core and non-core) has been around USD400 million.

International Development Association (IDA) and the Corporate Scorecard

In May 2020, the Australian Government published Partnerships for Recovery: Australia's COVID-19 Development Response (2020), which focusses on Australia's COVID-19 Development Response. The Government's shared strategic priorities with the World Bank Group emphasise:

  • reducing poverty and promoting prosperity through sustainable economic/income growth
  • DFAT's focus on the Pacific region and the Bank's attention to the needs of small and island states
  • strengthening private sector development
  • prioritising investments and interventions related to good governance, gender equality, innovation, health, education, and infrastructure
  • strengthening interventions in fragile and conflict affected states
  • ensuring a stronger focus on results and value for money.

[1] This includes a request for debt relief (HIPC) and Arrears Clearance contributions, that vary between replenishments.

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