The World Bank Group is Australia's largest multilateral partner and is the world's largest development organisation. The World Bank Group consists of five organisations:
- the International Bank for Reconstruction and Development (IBRD) lends to governments of middle-income and creditworthy low-income countries;
- the International Development Association (IDA) provides interest-free loans – called credits – and grants to governments of the world's poorest countries;
- the International Finance Corporation (IFC) provides loans, equity and advisory services to stimulate private sector investment in developing countries;
- the Multilateral Investment Guarantee Agency (MIGA) offers political risk insurance (guarantees) to investors and lenders; and,
- the International Centre for Settlement of Investment Disputes (ICSID) provides international facilities for conciliation and arbitration of investment disputes.
The World Bank Group is able to leverage significant financial resources and expertise for sustainable development and poverty reduction. The World Bank Group is an unparalleled source of development analysis and specialist program implementation, and a leading forum for global development policy.
Australia's membership of, and financial contributions to, the World Bank Group provide Australia with the opportunity to influence policies and priorities. An ongoing objective of our relationship is to ensure that the activities of the World Bank Group recognise and actively target key development priorities in the Indo–Pacific region.
The Australian Government supports economic development in the Indo-Pacific region through contributions to the World Bank's International Development Association (IDA). The IDA fund is the largest pool of concessional finance in the world, providing grants and highly concessional loans to 74 low-income countries. It is closely aligned with Australia's aid program priorities: promoting private sector development; boosting women's economic empowerment; effective governance; supporting fragile states; and tackling climate change.
Negotiations for the 18th replenishment of IDA (2017-18 to 2019-20) concluded in December 2016. USD75 billion will be available to client countries, through highly concessional loans and grants, to advance sustainable economic development and reduce poverty. The World Bank will raise market funds using IDA's equity for the first time to increase available finance by 50 per cent compared to the last replenishment (IDA17). The IDA replenishment will help countries in our region meet the Sustainable Development Goals, agreed by the international community in 2015.
Australia will contribute AUD774.45 million to the IDA18 replenishment, which will be drawn from Australia's aid program over a nine-year period. This contribution includes updated obligations to World Bank-managed debt relief schemes (the Heavily Indebted Poor Countries Initiative and Multilateral Debt Relief Initiative).
Pacific countries will benefit from a significant increase in financing available to support economic growth and infrastructure. Increased funding will also be available to help countries affected by natural disasters, including in the Pacific. A new USD2.5 billion facility in IDA18 will target private sector investment and job creation in fragile and low-income countries.
Australia also partners with the World Bank Group on specific development programs which support Australia's aid policy priorities.