Biden pledges $4bn to World Bank for poorest countries

Commitment comes as departing US President seeks to future-proof legacy before Donald Trump's return

President Joe Biden at the G20 Summit in Rio de Janeiro, Brazil. Mr Biden's pledge is part of his efforts to future-proof alliances and his climate legacy. AP

US President Joe Biden on Tuesday pledged a $4 billion contribution to the World Bank's fund for the globe's poorest countries, as he seeks to shore up America's commitment to multilateral institutions before president-elect Donald Trump assumes power.

The contribution will support the International Development Association, which supplements the World Bank's main lending arm. Pakistan and Bangladesh were the top two IDA borrowers in the last fiscal year, while countries in sub-Saharan Africa received about 75 per cent of IDA's financing during that time frame.

Mr Biden made the pledge during the G-20 summit in Brazil as part of his efforts to future-proof alliances and his climate legacy before Mr Trump begins his second presidential term.

“President Biden has heard loud and clear the calls from developing countries for more concessional financing and a strong IDA replenishment in December,” the White House said.

The pledge is subject to congressional approval.

Mr Trump's return to power poses serious questions for the International Monetary Fund and World Bank. The two Washington-based institutions receive the bulk of their funding from the US, which is used to support lower-income countries and climate-related issues.

Heightening these anxieties is Project 2025, a playbook designed by a conservative think tank in Washington. The group wants it introduced when Mr Trump takes office. The manual consists of several isolationist plans and argues the US should withdraw from and stop financing the World Bank and IMF.

“International organisations such as … the World Bank, and the International Monetary Fund espouse economic theories and policies that are inimical to American free market and limited government principles,” according to Project 2025.

Mr Trump distanced himself from Project 2025 during the presidential campaign, but now named multiple people associated with the paper to top posts in his administration.

Mr Trump has also recently nominated fracking executive Chris Wright, a climate sceptic, to lead the Department of Energy.

The nomination came days after World Bank President Ajay Banga and IMF managing director Kristalina Georgieva said they would continue to work with Mr Trump to support lower-income countries impacted by climate change.

During a panel at the Cop29 climate summit in Azerbaijan, Ms Georgieva said she remained confident that the private sector would continue investing in green technologies. Meanwhile, Mr Banga said the World Bank would engage with Mr Trump.

Mr Trump will probably withdraw the US from the Paris Climate Accord for a second time and has vowed to secure any unspent funds from Mr Biden's Inflation Reduction Act, a climate law to push the US towards reducing its carbon emissions.

Last week, in Azerbaijan, White House climate adviser Ali Zaidi said that the Biden administration would be using the remainder of its term to reassure its allies that Mr Trump would be unable to stop the transition to green initiatives.

Tuesday's pledge exceeds the $3.5 billion in funding the US committed in December 2021.