The World Bank Group approved additional $2bn to its previously announced commitment of $12bn, increasing their commitment to $14bn package of fast-track financing to assist companies and countries in their efforts to prevent, detect and respond to the rapid spread of Coronavirus disease (COVID-19).
The package will strengthen national systems for public health preparedness, including for disease containment, diagnosis, and treatment, and support the private sector, a statement of the Bank said.
The International Finance Corporation (IFC), WBG private sector arm, will increase its COVID-19 related financing availability to $8bn as part of the $14bn packages, up from an earlier $6bn, to support private companies and their employees hurt by the economic downturn caused by the spread of COVID-19.
The bulk of the IFC financing will go to client financial institutions to enable them to continue to offer trade financing, working-capital support and medium-term financing to private companies struggling with disruptions in supply chains.
IFC’s response will also help existing clients in economic sectors directly affected by the pandemic–such as tourism and manufacturing to continue to pay their bills. The package will also benefit sectors involved in responding to the pandemic, including healthcare and related industries, which face increased demand for services, medical equipment and pharmaceuticals.
“It’s essential that we shorten the time to recovery. This package provides urgent support to businesses and their workers to reduce the financial and economic impact of the spread of COVID-19,” said David Malpass, president of the WBG.
The World Bank Group is committed to a fast, flexible response based on the needs of developing countries, Malpass added, noting that support operations are already underway, and the expanded funding tools will help sustain economies, companies and jobs.
“Not only is this pandemic costing lives, but its impact on economies and living standards will likely outlive the health emergency phase. By ensuring our clients sustain their operations during this time, we hope the private sector in the developing world will be better equipped to help economies recover more quickly,” said Philippe Le Houérou, CEO of IFC, adding that in turn, this will help vulnerable groups to more quickly recover their livelihoods and continue to invest in the future.
Having mobilized quickly at the time of the 2008 global financial crisis and the Western African Ebola virus epidemic, IFC has a successful track record of implementing response initiatives to address global and regional crises hampering private-sector activity and economic growth in developing countries, mentioned the statement.
IFC will maintain its high standards of accountability while bearing in mind the need to provide support for companies as quickly as possible. IFC management will approve projects based on credit, environmental and social governance and compliance criteria, as applied in past crisis responses.