Sudan Clears Arrears, Gains Access to $2 Billion in New World Bank Financing | WPN World People News

The Republic of Sudan has cleared its arrears to the International Development Association (IDA), enabling its full re-engagement with the World Bank Group after nearly three decades, and paving the way for the country to access nearly $2 billion in IDA grants for poverty reduction and sustainable economic recovery. By clearing its arrears, Sudan has also completed a key step for receiving comprehensive external debt relief under the Heavily Indebted Poor Country (HIPC) Initiative.

“This is a breakthrough at a time when Sudan needs the world’s help to support its development progress. The steps taken so far, including arrears clearance and exchange rate unification, will put Sudan on the path to substantial debt relief, economic revival, and inclusive development,” said World Bank Group President David Malpass. “I am grateful to the United States Government for its generosity in facilitating the arrears clearance process. I congratulate Sudan’s government for its commitment to reform, and look forward to opportunities for greater World Bank Group support to the Sudanese people.”

IDA is the World Bank’s fund for the poorest countries. The payment of these arrears was made possible through a $1.15 billion bridge loan from the United States government. IDA is supporting Sudan’s reform agenda through a Reengagement and Reform Development Policy operation. The reforms aim to support Sudan’s economic growth and poverty reduction program, to make the Sudanese economy more competitive, enhance transparency, increase investments, create jobs and strengthen social protection.

“With the clearance of these arrears we look forward to securing financing from the World Bank Group and other multilateral institutions to strengthen our economy and reach all corners of Sudan with transformative development projects,” said Dr. Gibril Ibrahim, Sudan's Minister of Finance and Economic Planning. “We are thankful to the US Government for facilitating this clearance process, which also supports our drive towards more comprehensive debt relief.”

After arrears clearance, Sudan will have unencumbered access to normal financing from the World Bank Group, including financing for projects under IDA, private sector debt and equity investments through the International Finance Corporation (IFC), and political risk insurance provided by the Multilateral Investment Guarantee Agency (MIGA) to facilitate foreign direct investments.

“Today, Sudan has a once-in-a-generation window of opportunity to put itself on a path of economic and social renewal,” said Hafez Ghanem, World Bank Vice President for Eastern and Southern Africa. “I thank our international partners who have worked with us to bring Sudan to this important stage and look forward to opportunities for greater World Bank Group support for the Sudanese people.”

To maximize support to Sudan, the World Bank has been providing pre-arrears clearance grants that total $410 million to mitigate the impact of economic reforms through the Sudan Family Support Program, and to facilitate Sudan’s reengagement. This financing has been matched by $410 million of financing from other donors. The program aims to deliver cash transfers up to 80% of Sudanese families, or approximately 32 million citizens, to mitigate the impact of short-term economic shocks. The Program was launched on February 24, 2021.

The International Development Association (IDA) is one of the largest sources of funding for fighting extreme poverty in the world’s poorest countries. IDA provides zero- or low-interest loans and grants to countries for projects and programs that boost economic growth, build resilience, and improve the lives of poor people around the world. Since 1960, IDA has provided about $422 billion for investments in 114 countries. As an institution of the World Bank Group, IDA combines global expertise with an exclusive focus on reducing poverty and boosting prosperity in the world’s poorest countries. Learn more online: IDA.worldbank.org. #IDAworks

The Sudan Family Support Program (SFSP) is supported by several development partners through the Sudan Transition and Recovery Support (STARS) Multi-Donor Trust Fund, which includes Canada, European Union, Finland, France, Germany, Ireland, Italy, Kingdom of Saudi Arabia, Netherlands, Norway, State and Peace Building Trust Fund, Sweden and United Kingdom. Together these donors are matching the support provided by the World Bank’s pre-arrears clearance grants to bring total support for the SFSP to $820 million.

Source: World Bank