Denmark pledges $491.7 million to World Bank IDA fund for poorest countries

WASHINGTON (Reuters) - The World Bank Group said on Monday that Denmark has pledged to contribute about $491.7 million to the bank's latest replenishment of its fund for the poorest countries, a 40% increase over the country's previous contribution.

WHY IT'S IMPORTANT

The World Bank Group is aiming to close a record replenishment of the International Development Association's (IDA) funding by December, topping the previous $93 billion replenishment in December 2021. But the campaign to raise over $100 billion comes at a time of tight fiscal resources as many wealthier countries pare back spending as their recoveries from COVID-19 slow.

Denmark's pledge of 3.3 billion kroner ($491.7 million), announced at the United Nations General Assembly in New York, represents a major commitment to development and progress toward the goal as financing needs are rising in debt-strapped low-income countries.

The World Bank also called it a "deliverable" to African leaders, who have called for an ambitious IDA funding increase.

"We all want a more prosperous and equitable world. This financial commitment signifies Denmark's resolve and dedication in achieving the Sustainable Development Goals and the Paris Climate Agreement. I am proud to answer the call from our African partners for more funding," Danish Prime Minister Mette Frederiksen said a statement released by the World Bank. "We urge other countries to join forces with us."

World Bank President Ajay Banga said the donation will have a "tangible impact on people's lives," adding that every dollar raised by IDA can be multiplied by four times through the bank's own borrowing capacity.

"It's the best deal in development," Banga said of IDA.

($1 = 6.71 Danish krone)

(Reporting by David Lawder in Washington; Editing by Matthew Lewis)