WASHINGTON (Reuters): The World Bank on Friday said that 11 countries have pledged to contribute over US$11 billion to new hybrid capital and portfolio guarantee instruments designed to expand the bank’s financing capacity by US$70 billion over a decade to tackle climate change, pandemics and other global challenges.

The voluntary contributions, announced at World Bank and International Monetary Fund spring meetings in Washington, form the largest single enhancement to the World Bank’s balance sheet since the U.S. and other shareholders expanded its mission beyond fighting poverty in 2022.

In April 2023, World Bank shareholders endorsed an increase in the bank’s leverage ratio to boost lending capacity by some US$40 billion over 10 years. It also implemented an increase in bilateral guarantees that unlocks another US$10 billion in financing over a decade.

Thus far, the World Bank said Belgium, France, Japan and the United States have pledged funds to the enhanced portfolio guarantee programme, while Britain, Denmark, Germany, Italy, Latvia, the Netherlands, and Norway will contribute to the mechanism for hybrid capital, a debt-like instrument that can be used to back lending.

In addition, Japan is the first contributor to a new “Livable Planet Fund” designed to capture contributions from governments, philanthropies and the private sector to help finance projects from energy transition investments to healthcare delivery.

The fund is named after the bank’s new, expanded mission statement, “to create a world free of poverty on a livable planet,” endorsed last year to partly reflect its climate finance role.

German Development Minister Svenja Schulze, who first broke the news of the contribution pledges, said that further expansion of the bank’s lending capacity were needed because the needs of poor countries would continue to grow.

The World Bank’s “reform will not stop here,” she told reporters.