World Bank: 27 countries seek to secure access to crisis funds

The crisis toolkit allows countries to leverage available funds in existing programs.

The war with Iran led to a sharp rise in energy prices and caused tension in supply chains.

Iraq and Kenya are among the countries requesting assistance.

- Twenty-seven countries have begun putting in place crisis mechanisms that would allow them to quickly access funding from existing World Bank programs since the outbreak of the Iran war, according to an internal document seen by Reuters.

The World Bank document did not name the countries or specify the total amount of funds likely to be requested. The World Bank declined to comment.

The document showed that three countries have agreed to new tools since the start of the conflict in the Middle East on February 28, while other countries are still in the process of completing procedures.

The war and the resulting disruption to global energy markets affected global supply chains and prevented shipments of bio-fertilizers from reaching developing countries.

Officials in Kenya and Iraq have confirmed they are seeking rapid financial support from the World Bank to deal with the fallout from the war, such as rising fuel prices in the African nation and the massive drop in oil revenues for Iraq.

These countries are among 101 countries that had access to some form of pre-arranged financing instrument that they could draw on in times of crisis, including 54 countries that signed up to the Rapid Response Option, which allows countries to use up to 10 percent of their unused financing.

Last month, World Bank President Ajay said the bank’s crisis response toolkit would allow countries to tap into pre-arranged emergency financing, existing project balances, and rapid disbursement tools to access an estimated $20 billion to $25 billion.

He said the bank could also redirect parts of its portfolio to raise the total to $60 billion over six months, with the possibility of making further longer-term changes to raise the total to around $100 billion.

At the time, Kristalina Georgieva, head of the International Monetary Fund, said she expected up to a dozen countries to seek short-term assistance of between $20 billion and $50 billion from the fund. But three sources familiar with the matter said few requests had been received.

One source, who spoke on condition of anonymity, said, "Countries are definitely in a wait-and-see mode."

Kevin Gallagher, director of the Center for Global Development Policy at Boston University, said countries are more willing to ask for money from the World Bank rather than negotiate with the International Monetary Fund because the Fund's programs generally require austerity measures that could exacerbate the social unrest already seen in countries like Kenya.