World Bank approves $125m IDA grant to Somalia

The executive board of the World Bank approved on Wednesday a $125 million International Development Association (IDA) grant to enhance Somalia’s economic resilience through improved public finances and private sector development.

This Development Policy Financing (DPF) initiative introduces for the first-time drought index insurance to 180,000 Somali pastoralists, of which 90,000 are women. It aims to boost revenue, enhance debt management, and promote climate-smart private sector investments.

The programme will also expand microfinance access for lower-income groups, support greener and more affordable electricity, and develop fisheries.

The initiative aligns with Somalia’s structural reforms and the World Bank’s broader goals to stabilise and foster inclusive growth in the country.

“This DPF signals the government’s commitment to continuing important structural reforms following the Heavily Indebted Poor Countries (HIPC) Completion Point, paving the way for a more stable and sustainable future,” Kristina Svensson, World Bank Country Manager for Somalia, said in a statement.

Established in 1960, the World Bank’s IDA is designed to help low-income countries worldwide by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve people’s lives. IDA is considered one of the largest sources of assistance for 75 client countries, 39 of which are in the African continent.

Attribution: The World Bank