Dozens of countries prepare to access World Bank emergency funds

A total of 27 countries have taken steps to activate crisis-response financial instruments that would allow them to quickly access funding from existing World Bank programs following the outbreak of the Iran war, according to an internal document reviewed by Reuters.

The document does not identify the countries involved or specify the total amount of funding being sought. 

According to the document, three countries have already approved new crisis instruments since the conflict in the Middle East began on February 28, while the remaining countries are still in the process of finalising their arrangements.

The war and the resulting disruption to global energy markets have had widespread economic consequences, including impacts on global supply chains and delays in the delivery of essential fertiliser shipments to developing nations.

Officials in both Kenya and Iraq have confirmed they are seeking rapid financial assistance from the World Bank to mitigate the economic fallout. Kenya is facing surging fuel prices, while Iraq is dealing with a sharp decline in oil revenues.

The 27 countries are part of a broader group of 101 nations that have access to pre-arranged financing mechanisms designed for crisis situations. Among them, 54 countries have enrolled in the World Bank’s Rapid Response Option, which enables governments to access up to 10% of their undisbursed financing during emergencies.

World Bank President Ajay Banga said last month that the institution’s crisis-response toolkit would allow countries to draw on a combination of pre-arranged contingent financing, existing project balances, and fast-disbursing instruments, providing access to an estimated $20 billion to $25 billion.

He added that by reallocating portions of its existing portfolio, the World Bank could increase available funding to $60 billion over a six-month period, with the potential for longer-term adjustments to raise the total to around $100 billion.

At the same time, International Monetary Fund Managing Director Kristalina Georgieva said she expected up to a dozen countries to seek between $20 billion and $50 billion in near-term financial support from the IMF. However, according to three sources familiar with the situation, relatively few formal requests have been submitted so far.

"Countries are definitely in wait-and-see mode," one of the sources said on condition of anonymity.

By Tamilla Hasanova