World Bank Group President Ajay Banga said on Tuesday that proposed new contributions from rich 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 the country’s regular contributions to the International Development Organization’s fund for the poorest countries.
They will include US President Joe Biden’s proposed request for $2.25 billion in additional funding for the World Bank, along with expected contributions from Germany, Japan, South Korea, Saudi Arabia and the Nordic countries, he said.
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“I think if all this goes through, including the US, we could put somewhere between $100 billion and $125 billion of additional lending capacity in the bank, which is very good. Not enough, but good,” Banga said.
Such contributions could more than double the bank’s move earlier this year to raise its leverage ratio to raise an additional $50 billion in lending over a decade as it seeks to help the climate transition and other global development challenges.
Banga said he has yet to discuss with the United States and China a general capital increase and changes to the bank’s shareholding structure.