Strengthening IDA21: A Smarter Menu for Development Finance

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As the world faces compounding challenges, the need for bold, sustained investment in development has never been clearer. That's where IDA21 steps in, not just with a call for more resources, but with smarter, more flexible ways to give.

Grants remain the primary contribution modality, providing the foundation for IDA's support for 78 low-income countries around the world. But recognizing the growing fiscal constraints many partners face, IDA21 is also offering more flexible, budget-conscious, and impactful ways to give.

Two new non-grant contribution instruments are designed to meet donors where they are-financially, strategically, and politically.

In addition to the well-established Concessional Partner Loans (CPLs)-first introduced in IDA17- donors can now also choose among Hybrid Capital and the Portfolio Guarantee Platform (PGP) as its newest instruments.

Each instrument offers a different way to stretch the value of donor support:

• Concessional Partner Loans (CPLs) are reimbursable loans to IDA that give donors a steady income stream while helping IDA lower its borrowing costs and better manage interest rate risk.
• Portfolio Guarantee Platform (PGP), new for IDA21, allows highly rated donors to guarantee IDA's entire lending book without any upfront cash payments thus reducing credit risk and freeing up capital.
• Hybrid Capital, also new in IDA21, is considered like equity in IDA's balance sheet. It offers interest income to investors, and can be converted into a grant contribution.

For donors, these tools are about value and choice: they offer flexibility, voting rights, and budget-conscious options-while enhancing IDA's ability to deliver for clients.

IDA21 reflects a new era of development finance-one built on innovation, flexibility, and shared purpose. It's not just about asking for more, but about enabling more: more ways to give, more ways to lead, and more ways to drive lasting impact for people and planet.