World Bank in talks with dozens of countries about crisis aid, Banga says

The World Bank is engaged in talks with around 30 to 40 countries regarding potential crisis aid to help them manage energy shocks and price increases resulting from the Middle East conflict, according to its president Ajay Banga. Despite the global economy showing resilience due to significant AI investments and supply and demand adjustments for oil, developing countries are facing new challenges from a surge in diesel and fertilizer prices, as well as the looming super El Niño weather effect.

The World Bank had initially allocated $25 billion in crisis funds when the war began in late February, but a sharp increase in energy prices and borrowing costs, compounded by the ongoing effects of the COVID-19 pandemic and Russia's invasion of Ukraine, has led to a growing need for additional assistance. Many developing nations owe external creditors about $400 billion in 2026, with interest payments accounting for a third of this total.

Banga indicated that the Bank could extend its support up to $100 billion if the situation worsens, surpassing the $70 billion disbursed during the pandemic. The World Bank attracted a record $112 billion in private capital in the year ending June, exceeding the $69 billion in the previous year and more than triple the $123 billion invested in 2022.

However, there is still a need to boost private capital flows to low-income countries, where the amount is currently around $3 billion. The World Bank and the International Monetary Fund are collaborating to tackle the high debt levels that many developing countries face through various initiatives, including debt-for-development swaps and a portfolio-based guarantee for Argentina.