The World Bank has introduced significant reforms to make borrowing more affordable for vulnerable nations, taking direct action to address global challenges such as climate change, inequality, and economic instability.
Announcing the changes, the bank removed several fees on International Bank for Reconstruction and Development (IBRD) loans.
It eliminated the prepayment premium, granted a grace period for commitment fees, and extended low-cost pricing for smaller, vulnerable states.
To further its efforts, the bank plans to expand its lending capacity by $150 billion over the next decade.
By adjusting the IBRD’s equity-to-loans ratio and securing partnerships, including $1 billion from the Asian Infrastructure Investment Bank, it unlocked an additional $70 billion for lending.
“These changes will make borrowing easier and more affordable for countries facing major challenges,” the bank stated.
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Moreover, the World Bank reinforced its commitment to financial stability by maintaining its Triple-A credit rating.
To promote sustainable development, it introduced the Framework for Financial Incentives (FFI).
This initiative, backed by Japan, prioritises investments in biodiversity, water security, and energy access through platforms like the Global Solutions Accelerator and the Livable Planet Fund.
In addition, the bank developed innovative tools to attract private investment.
For example, it launched the Wildlife Conservation Bond to fund Black Rhino conservation in South Africa and a plastic waste reduction-linked bond to support recycling efforts in Ghana and Indonesia.
Despite these reforms, the World Bank acknowledged the need for collective action.
It urged governments, institutions, and private investors to help bridge the funding gap required to combat climate change and foster sustainable development.
