In a significant move, the Swedish government has announced its decision to contribute a record-breaking SEK 8.2 billion to the International Development Association (IDA), the World Bank’s fund for the world’s poorest countries. This contribution marks a vital investment in the future of low-income countries and aligns with Sweden’s commitment to eradicating poverty.
Announced on July 9, 2025, in Stockholm, Sweden’s pledge is part of the IDA’s 21st replenishment cycle, which will generate a total of USD 100 billion for reforms, investment, and development in the world’s poorest countries. The IDA’s work to eradicate poverty comes at a time when many low-income countries face challenges such as rising debt, climate-related risks, and limited access to funding.
Minister for International Development Cooperation and Foreign Trade Benjamin Dousa welcomed the contribution, stating that it is “a vital investment in the future” for both Sweden and the world’s poorest countries. He highlighted that every development assistance krona invested in the IDA equates to three to four kronor in World Bank loans to support economic reforms and create better conditions for companies to invest, trade, grow, and employ people in these countries.
IDA’s Innovative Financing Model
The IDA’s innovative financing model means that every krona of development assistance invested generates three and a half to four kronor in loans and grants to recipient countries. Over the next three years, the programme will involve USD 100 billion in financing that will reach 1.9 billion people in 78 of the world’s poorest countries.
The IDA focuses on areas such as employment, private investment, support to refugees and host communities, and climate change. These are also high-priority areas for the Swedish Government. At least 45 per cent of the financing will go to climate measures, underscoring Sweden’s commitment to addressing this pressing global challenge.
Sweden remains one of the most generous donors to the IDA, and the second-most generous in proportion to its economy. The World Bank is also an important cooperation partner for Sweden, with Minister for Finance Elisabeth Svantesson chairing the World Bank and International Monetary Fund’s Development Committee during 2024-2026.
Significance of the Contribution
The Swedish government’s historic contribution to the IDA demonstrates donors’ trust in the World Bank as an effective and reliable cooperation partner. The pledge also highlights Sweden’s commitment to supporting job creation and growth promotion reforms in times of global economic uncertainty and low growth.
In conclusion, Sweden’s SEK 8.2 billion pledge to the IDA marks a significant step towards addressing poverty and promoting sustainable development in the world’s poorest countries. This contribution will have a lasting impact on the lives of millions of people around the world.