World Bank approves massive $13 bn capital raise
Washington DC: In a major development, the World Bank Group has endorsed an ambitious package of measures that include a $13 billion increase in paid-in capital.
The decision came late on Saturday along with a series of internal reforms, and a set of policy measures that greatly strengthen the global poverty fighting institution's ability to scale up resources and deliver on its mission in areas of the world that need the most assistance.
World Bank President Jim Yong Kim hailed the decision as "historic" as International Monetary Fund Managing Director Christine Lagarde welcomed the move.
The package approved by the Development Committee of the Board of Governors consists of $7.5 billion paid-in capital for International Bank for Reconstruction and Development (IBRD) and $5.5 billion paid-in capital for International Finance Commission (IFC), through both general and selective capital increases, a media statement said. It also includes a $52.6 billion callable capital increase for the IBRD. The boost in capital will be augmented by a broad range of internal measures, including operational changes and effectiveness reforms, loan pricing measures, and other policy steps to create an even stronger World Bank Group.
"The capital package for the IBRD and the IFC agreed to today builds on the strong commitment of contributors to the IDA, as demonstrated in the IDA18 replenishment, the successful launch of IDA in the capital market, and strengthened MIGA financial capacity," it said. Following the decision, the combined financing arms of the World Bank Group are expected to reach an average annual capacity of nearly $100 billion between fiscal 2019 and fiscal 2030, benefiting all Bank Group members across the income spectrum.