World Bank seeks grants, new capital to fight global crises
Anna Bjerde, World Bank Managing Director of Operations
May 23, 2023
Abuja, Nigeria - With the surge in global crises, the World Bank Managing Director of Operations, Anna Bjerde has said that the World Bank will press for more grants and new capital from member countries to fight global crises.
Anna Bjerde made this known in an interview, explaining that the extra grant was necessary to scale up lending for responses to climate change and other global crises.
Bjerde said the lender will rally donor support for a newly established crisis facility for the world’s poorest countries that face overlapping global crises including severe climate events.
She said “we hope to be able to really conclude and have a very strong interest in funding this by the end of the year,” adding that multiple billions of dollars were needed for the crisis facility.
That facility sits within the International Development Association (IDA) fund, the World Bank’s fund for the poorest countries. The last replenishment was fast depleted by the pandemic.
“COVID-19 pushed many poor countries into debt distress as they were expected to continue servicing their obligations in spite of the massive shock to their finances.
“Bjerde said she is hoping for major progress in courting interest in the facility at the annual meetings of the International Monetary Fund (IMF) and World Bank in Morocco in October.
“We need to really get grants from developed and higher income countries, rich countries, to provide resource transfers to the lower income countries,” Bjerde said.
The World Bank, whose 25-member executive board on May 3 elected a new president, wants to increase lending to ensure it can better tackle issues such as climate change, pandemics and conflict.
“We need to continuously work on what we call under the evolution roadmap a better bank but also a bigger bank,” Bjerde added.
The World Bank’s “evolution road map” calls on its management to develop specific proposals to change its mission, operating model and financial capacity.
It also prescribes exploring options such as a potential new capital increase to unlock more lending and new financing tools.
Bjerde further explained that the capital increase was an ongoing conversation that needed engagement with shareholders.
“There are a lot of good efforts by World Bank management to look at all opportunities to maximise capital and freeing up resources internally first, through balance sheet optimisation and so forth.”
U.S. Treasury Secretary, Janet Yellen in April said the next steps the World Bank must take include potential changes to allow the bank’s private sector, and poor country lending arms to lend to sub-sovereign entities such as cities and regional authorities.