World Bank in crisis aid talks with 30 to 40 nations

The World Bank is talking with 30 to 40 countries about possible emergency financing as the Middle East war pushes up energy, diesel and fertilizer costs across the developing world, President Ajay Banga told Reuters in an interview in Bangkok. The bank could make up to \$100 billion available if conditions get worse. That is more than the \$70 billion it paid out during the pandemic.reuters

Banga spoke ahead of this week's annual meetings of the International Monetary Fund and World Bank in Thailand. His comments suggest lenders are bracing for more requests from countries whose budgets are already stretched.finance.biggo+1

Demand expected to rise

Few governments drew on the initial \$25 billion crisis facility the bank opened when the war began in late February. Banga said the global economy had held up fairly well, helped by heavy AI investment and shifts in oil supply and demand. He said rising diesel and fertilizer prices and the risk of a "super El Niño" weather pattern are now adding pressure on poorer nations.finance.biggo+1

"There is pressure, and so I think maybe over the coming months, more countries will come for some slice of that first \$50 to \$60 billion," Banga said. That figure combines the \$25 billion facility with another \$35 billion that countries can free up by redirecting money from World Bank projects that have already been approved. "We'll see, but we're ready. We're engaged," he said.reuters

So far, more countries have asked about reworking existing projects than about tapping the immediate crisis window for cash. World Bank estimates show developing countries owe external creditors about \$400 billion in 2026, and interest makes up one-third of that.unn+2

Debt swaps and private capital

Banga said the bank and the IMF are working together on heavy debt burdens, including efforts to help countries collect more tax revenue at home. The bank has already arranged debt-for-development swaps for Angola and Ivory Coast, plus a portfolio guarantee for Argentina. "We've got 14 or 15 in the pipeline, helping them rotate out higher-priced old debt for newer-priced debt with our guarantees," he said. The savings go to education, health, water or nature programs.unn+1

The bank also reported a record \$112 billion in private capital mobilized in the year ended June, up from \$69 billion a year earlier. Including \$123 billion from its own resources, total financing came to \$235 billion. Low-income countries attracted only about \$3 billion of the private money.finance.biggo+1

"In the smaller countries, it hasn't multiplied enough, and there are challenges," Banga said. He added that the bank will announce new initiatives this week to help small businesses reach private capital.finance.biggo