Biden pledges $4 billion to World Bank’s poorest nations fund at G20 summit

US President Joe Biden has made a ‘historic’ pledge of $4 billion to the World Bank’s International Development Association (IDA) fund for the world’s poorest countries.

Biden’s commitment surpasses the previous contribution of $3.5 billion made in December 2021. Biden announced this during a closed session of the Group of 20 summit in Rio de Janeiro, Associated Press reported.

The IDA fund provides loans and grants to developing countries to help reduce poverty and improve living standards. With this pledge, the US aims to support the World Bank’s mission to alleviate poverty and promote economic development.

However, there’s uncertainty about whether President-elect Donald Trump will honour Biden’s pledge, given his past proposals to cut foreign aid. Trump, alongside Elon Musk, plans to reduce US spending through a new government efficiency panel.

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’Historic’ pledge

Earlier in Rio de Janeiro, U.S. deputy national security adviser Jonathan Finer told reporters that Trump would announce a ”historic” pledge to the IDA replenishment.

Finer also told reporters at a briefing on the G20 summit that Biden will launch a bilateral clean energy partnership when he meets Brazilian President Luiz Inacio Lula da Silva on Tuesday.

The World Bank’s IDA fund, which provides mainly grants and very low-interest loans to the poorest countries, is replenished every three years, and a pledging conference is scheduled for Dec. 6.

World Bank President Ajay Banga is aiming for a record amount exceeding the $93 billion refunding in December 2021, amid rising demands from poor nations in Africa and elsewhere that are struggling with crushing debts, climate disasters, conflict and other pressures.

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Banga told Reuters in October that a $120 billion replenishment is possible, but that goal would require some substantial increases in country commitments.

Biden’s new U.S. commitment is about 14.3% higher than its 2021 contribution. At the IMF-World Bank annual meetings in October, Spain announced plans to boost its contribution by 37% to 400 million euros ($423 million).

Denmark in September announced a 40% increase in its contribution to about $492 million.

With inputs from agencies.