The term IDA agreement has been gaining popularity in recent times, especially in the financial sector. This agreement is usually signed between the International Development Association (IDA) and a borrowing country which typically involves a loan agreement.

So, what exactly is an IDA agreement?

An IDA agreement is a legal document that outlines the terms and conditions of a loan provided by the International Development Association, a branch of the World Bank Group, to low-income countries. These loans are intended to provide financial support to these countries for their economic and social development, and are usually provided at concessional interest rates and favorable repayment terms.

The International Development Association provides loans to countries that do not have access to regular financing from the private sector or other international financial institutions. The IDA focuses on the poorest countries in the world that are unable to meet their development needs through their own resources.

The IDA agreement is negotiated between the IDA and the borrowing country, and it lays out the terms of the loan, including the amount of the loan, the interest rate, the repayment period, the collateral required (if any), and any other conditions.

One of the unique features of the IDA agreement is that it includes a commitment to use the loan funds in a way that will have maximum impact on poverty reduction and sustainable development. This means that the borrowing country must have a clear plan for how it will use the loan funds to achieve its development goals.

In summary, an IDA agreement is a legal document that outlines the terms and conditions of a loan provided by the International Development Association to low-income countries. It is a vital tool for promoting sustainable development and reducing poverty in the poorest countries in the world.