World Bank Group increases coronavirus response to $14bn

The World Bank and IFC's Boards of Directors have approved an increased $14 billion package to fast-track financing and assist companies and countries in their efforts to prevent, detect and respond to the rapid spread of the novel coronavirus.

The package will strengthen national systems for public health preparedness, including for disease containment, diagnosis, and treatment, and support the private sector, according to a statement of the World Bank Group dated March 17.

IFC -- a sister organisation of the World Bank and member of the World Bank Group -- is the largest global development institution focused on the private sector in emerging markets.

IFC will increase its financing availability to $8 billion as part of the $14 billion package, up from an earlier $6 billion, to support private companies and their employees affected 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 statement read.

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 World Bank Group.

"The World Bank Group is committed to a fast, flexible response based on the needs of developing countries. Support operations are already underway, and the expanded funding tools approved today will help sustain economies, companies and jobs," he also said.

The additional $2 billion builds on the announcement of the original response package on March 3, which included $6 billion in financing by the World Bank to strengthen health systems and disease surveillance and $6 billion by IFC to help provide a lifeline for micro, small and medium sized enterprises, which are more vulnerable to economic shocks.

"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 Chief Executive Officer of IFC Philippe Le Houérou.

"In turn, this will help vulnerable groups to more quickly recover their livelihoods and continue to invest in the future," he added.

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.

It earlier mobilised quickly at the time of the 2008 global financial crisis and the Western African Ebola virus epidemic, according to the statement.

The IFC response has four components:

-- $2 billion from the Real Sector Crisis Response Facility

-- $2 billion from the existing Global Trade Finance Programme

-- $2 billion from the Working Capital Solutions program

-- $2 billion from the Global Trade Liquidity Programme and the Critical Commodities Finance Programme

IFC is already working to deploy its response financing, and 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.