The World Bank is discussing potential crisis aid with 30–40 countries facing energy shocks and rising prices linked to the Middle East war, President Ajay Banga said.
Speaking to Reuters in Bangkok, Banga warned that higher diesel and fertiliser prices were increasing pressure on developing economies. He also flagged risks from a looming super El Niño weather event.
Crisis financing could reach $100 billion
The Bank initially offered $25 billion when the war began in late February. Few countries sought that funding, Banga said, citing economic resilience supported by AI investment and oil supply-and-demand adjustments.
“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,” he said.
That includes the initial allocation and another $35 billion available through redirecting approved projects.
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“We’ll see, but we’re ready. We’re engaged. We’re having conversations with a number of them, you know, 30 to 40 countries are in dialogue with us,” Banga said.
More countries preferred adapting existing projects to accessing immediate crisis financing. If conditions worsened, the Bank could provide up to $100 billion, exceeding its $70 billion pandemic disbursement.
Developing countries face about $400 billion in external debt payments during 2026. Interest represents roughly one-third. Higher borrowing costs compound fiscal pressures left by pandemic spending and inflation following Russia’s invasion of Ukraine.
Private capital reaches record levels
The Bank mobilised $112 billion in private capital during the year ending June, compared with $69 billion a year earlier. That exceeded three times the 2022 total, before the former Mastercard chief became president.
Its own resources contributed another $123 billion, bringing combined financing to $235 billion amid sharp Western cuts to bilateral development aid.
“There is no one answer that fits when the world has these kinds of issues. What you need to do is figure out how to cut your coat to suit your cloth,” Banga said.
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He expects expanded Multilateral Investment Guarantee Agency political-risk guarantees, local-currency financing and regulatory reforms to attract further investment.
Upper-middle-income countries drew $50 billion; lower-middle-income countries attracted $37 billion. Low-income countries received roughly $3 billion.
“In the smaller countries, it hasn’t multiplied enough, and there are challenges,” he said.
New initiatives will seek better capital access for micro, small and medium-sized businesses.
Regional totals included Latin America and the Caribbean’s $36.3 billion, Africa’s $22 billion, Europe and Central Asia’s $21.3 billion, and South Asia’s $19.2 billion.
The leading recipients were Brazil, India, Turkiye, Romania, Nigeria, Argentina, South Africa, Bangladesh, Mexico and Chile.
Debt guarantees target development spending
The Bank and IMF are also supporting domestic revenue collection and debt initiatives. Existing arrangements include swaps for Angola and Ivory Coast, plus an Argentine portfolio guarantee.
“We’ve got 14 or 15 in the pipeline, helping them rotate out higher-priced old debt for newer-priced debt with our guarantees,” Banga said. Savings would support education, healthcare, water or nature programmes.
The discussions precede the institutions’ October 12–18 annual meetings in Bangkok.
