World Bank head claims wealthy nations' contributions could boost lending capacity by over $100B
Contributions aim to enhance bank's ability to address global development challenges, particularly climate change
{{#rendered}} {{/rendered}}World Bank Group President Ajay Banga on Tuesday said that proposed new contributions from wealthy countries under a capital adequacy framework could increase the bank's lending capacity by $100 billion to $125 billion over a decade.
Banga told a Council on Foreign Relations event that the contributions would come outside the bank's normal shareholding structure and regular country contributions to the International Development Agency fund for the poorest countries.
They would include U.S. President Joe Biden's proposed $2.25 billion supplemental budget request for the World Bank, along with expected contributions from Germany, Japan, South Korea, Saudi Arabia and Nordic countries, he said.
{{#rendered}} {{/rendered}}UN GENERAL ASSEMBLY MEETS FOR THIRD DAY AS LEADERS RAISE ALARMS ON HUMAN RIGHTS, PRESSING MATTERS
Ajay Banga, World Bank president, participates in global infrastructure and investment forum in New York, on Sept. 21, 2023. (Seth Wenig/Pool via REUTERS/File Photo)
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"I believe that if all this goes through, including the U.S., we could raise somewhere between $100 billion and $125 billion of extra lending capacity in the bank, which is pretty good. Not enough, but good," Banga said.
{{#rendered}} {{/rendered}}Such contributions could more than double the bank's move earlier this year to increase its leverage ratio to squeeze out an additional $50 billion in lending over a decade, as it seeks to aid the climate transition and other global development challenges.
Banga said that he has not held any discussions with the United States and China yet regarding a general capital increase and changes to the bank's shareholding structure.