In April 2023, World Bank shareholders backed an increase in the leverage ratio to increase lending capacity by about $40 billion over 10 years. An increase in bilateral guarantees was also implemented, unlocking another $10 billion in financing over a decade.
So far, the World Bank said Belgium, France, Japan and the United States have pledged funds for the enhanced portfolio guarantee program; While Great Britain, Denmark, Germany, Italy, Latvia, the Netherlands and Norway will contribute to the hybrid capital mechanism, a debt-like instrument that can be used to support loans.
In addition, Japan is the first contributor to a new “Livable Planet Fund” designed to attract contributions from governments, philanthropic organizations and the private sector to finance projects ranging from energy transition investments to healthcare provision.
The fund is named after the bank's new mission, “creating a poverty-free world on a liveable planet,” endorsed last year to partly reflect its climate finance role.
German Development Minister Svenja Schulze, who first broke the news of the pledges, said further expansion of the bank's lending capacity was necessary because the needs of poor countries would continue to grow.
World Bank reform “won't end here,” the journalists said.
