The International Development Association (IDA) On Monday launched its first bond in its nearly 60-year history, as investors around the globe seized the opportunity to invest in a triple A-rated asset and support life-changing investments in the worldâ€™s poorest countries.
The bond, which marks the launch of IDAâ€™s borrowing programme in the global capital markets, raised US$1.5 billion to address some of the most pressing development issues.
IDA provides technical expertise and low-cost financing for projects and programmes that boost economic growth and reduce poverty in the worldâ€™s poorest countriesâ€” from tackling conflict, fragility and violence; forced displacement; climate change; and gender inequality to promoting governance, institution building, creating jobs and supporting a strong private sector for economic transformation.
Until now, IDA has been virtually unleveraged, building up an unparalleled equity base of US$158 billion.
In 2016, IDA shareholders agreed to transform IDAâ€™s financing model, leveraging its strong capital base to pioneer a new model for development finance that combines donor funding with funding raised in the capital markets. IDAâ€™s borrowing program will enable IDA to significantly scale up its support toward achieving the Sustainable Development Goals, while offering investors an efficient way to contribute to global development.
â€œTodayâ€™s bond issue will allow IDA to tap into the power of capital markets to tackle some of the worldâ€™s biggest challenges and help millions lift themselves out of poverty,â€ World Bank Group President, Jim Yong Kim said.
Also, the World Bank Vice President and Treasurer, Arunma Oteh said: â€œIDA received a resounding response from the market for its debut issuance. Investors globally seized the unique opportunity to be the first to invest in IDAâ€™s triple-A rated bond and make a positive impact in the lives of hundreds of millions of people around the globe.
â€œI want to thank investors, lead managers and all the bankers for their personal engagement and commitment to making IDA debut such a fantastic success.â€