2011 - World Bank - 50 Years of Concessional Lending for Transport

The International Development Association (IDA) is a vital arm of the World Bank Group. Briefly, IDA finances projects through interest-free grants and subsidized loans to the poorest countries in lieu of traditional lending.

This report summarizes IDA's investments over the last 50 years.

The shape and scope of the IDA portfolio has evolved with global economic trends, as well as evolving philosophies on what constitutes good transport investments. And the results were surprising in terms of their scale. In road transport, for instance, IDA funds have supported the construction, rehabilitation, and maintenance of close to 1 million kilometers of roads in developing countries. This is equivalent to circling the globe 25 times or one and a half trips to the Moon. Ethiopia was the largest recipient. A noticeable outcome in Ethiopia was the growth of the IDA backed road fund to six times its original size within ten years with IDA providing TA to create a strong and sustainable capacity to manage a road network.

IDA has provided about US$28.3 billion to fund a total 1,115 transport projects over the last fifty years, on this total investment in transport, India has received most. The rural transport successes included the percentage of connected habitations increased from 40% to 70% in Himachal Pradesh, from 35% to 67% in Jharkhand, from 40% to 78% in Rajasthan, and from 40% to 80% in Uttar Pradesh.

Things were very different in the Bank’s early days. Projects took place mainly in Japan and Europe, with railway and waterborne transport forming over two thirds of the transport portfolio. But with the formation of IDA in 1960, things really got swinging, with a new prioritization for infrastructure provision in developing countries, especially the newly independent African states.

By the 1970s and 80s, roads had become the majority of the Bank’s portfolio, with IDA broadening the programs to include institutional reform, as well as maintenance and asset management components. By the early 1990s, the IDA transport strategy was influenced by Agenda 21, from the 1992 Earth Summit in Rio, which described the integration of environment and development in order to fulfil basic needs, improve living standards, and ensure sustainability.

IDA further developed a focus on rural poverty with the renewed emphasis of infrastructure in the 1994 World Development Report and the publication of the 1996 World Bank Transport Strategy, and at that time, a significant portion of IDA transport activities focused on rural connectivity.

The UN Millennium Development Goals (MDGs) of 2000 further influenced the shape of the IDA portfolio, with new emphasis on transport investments’ ability to help countries meet their MDGs. This emphasis was further solidified through the World Bank Infrastructure Action Plan (IAP) in 2003, which emphasized IDA priorities for poverty alleviation through a wide array of passenger and goods movement initiatives and capacity building activities. This focus remains today, with both IDA and traditional World Bank lending activities emphasizing safe, affordable, and clean transport systems and networks.