October, 2026
The lender is holding emergency financing discussions with up to 40 developing countries as rising energy prices, debt obligations and climate risks threaten economic stability.
The World Bank is in discussions with as many as 40 developing countries over potential emergency financial assistance as surging fuel and fertiliser prices, rising debt obligations and worsening global economic conditions place mounting pressure on vulnerable economies, according to its president, Ajay Banga.
The international lender could expand its crisis-response financing capacity to as much as 100 billion US dollars if conditions deteriorate further, potentially exceeding the emergency assistance it provided during the COVID-19 pandemic.
Banga disclosed the discussions in an interview with Reuters on Sunday, October 11, 2026, ahead of the annual meetings of the International Monetary Fund (IMF) and World Bank in Bangkok, Thailand.
The talks involve between 30 and 40 countries seeking options to manage economic pressures stemming from the conflict in the Middle East, which has disrupted international energy markets and driven up the cost of petroleum products and fertilisers.
The World Bank has not disclosed the identities of the countries participating in the discussions, leaving it unclear whether Ethiopia, which depends heavily on imported petroleum products and agricultural inputs, is among the governments seeking assistance.
The announcement comes as developing economies confront a combination of rising import costs, tightening fiscal conditions and substantial external debt repayment obligations.
According to Banga, the World Bank initially made 25 billion US dollars available through emergency financing arrangements after the Middle East conflict intensified in late February.
An additional 35 billion US dollars could be accessed by redirecting resources from existing World Bank-financed projects towards more urgent economic needs.
Together, the measures represent between 50 billion and 60 billion US dollars in potential immediate financing and project-reallocation capacity, depending on country demand and implementation arrangements.
However, demand for the initial emergency financing was relatively limited, as several economies proved more resilient than expected and international oil markets adjusted to supply disruptions.
That situation could change as elevated diesel and fertiliser prices increasingly affect developing countries, particularly those with limited fiscal resources and heavy dependence on imported energy.
Banga said the institution was preparing for more governments to request assistance over the coming months as economic pressures intensify.
The World Bank’s potential expansion to 100 billion US dollars represents available financing capacity rather than funds already approved or allocated to individual countries.
The proposed scale of assistance would exceed the roughly 70 billion US dollars the institution provided in emergency support during the pandemic.
The growing concern centres on the interaction between expensive energy, agricultural production costs and debt servicing requirements.
Higher international diesel prices increase transportation, manufacturing and agricultural production costs, while rising fertiliser prices threaten to make farming more expensive and potentially reduce crop productivity. These pressures are particularly significant for low-income countries, where agriculture employs large sections of the population and food expenditure accounts for a substantial proportion of household budgets.
The anticipated development of a powerful El Niño weather pattern could further complicate the situation by disrupting rainfall patterns and agricultural production in vulnerable regions. At the same time, governments have less financial flexibility to absorb new shocks after years of elevated borrowing costs, pandemic-related expenditure and inflationary pressures.
World Bank estimates indicate that developing countries face approximately 400 billion US dollars in external debt obligations during 2026, with interest payments accounting for roughly one-third of the total. The burden limits the resources available for public investment, food security programmes, social protection and economic development.
Many governments are consequently confronting difficult choices between servicing existing obligations, maintaining essential imports and protecting households from rising prices. The financing discussions are therefore taking place against a backdrop of growing concern over the sustainability of public finances across developing economies.
The developments are particularly relevant for Ethiopia because of the country’s dependence on imported petroleum products, fertilisers, industrial machinery and other essential commodities. Changes in international energy prices can directly affect Ethiopia’s foreign exchange requirements, particularly given the scale of petroleum imports needed to support transportation, agriculture and industrial activity.
Rising fertiliser costs can also create additional pressure on agricultural financing and public expenditure, depending on procurement prices, subsidy arrangements and the availability of foreign currency. Agriculture remains a major component of Ethiopia’s economy, making the affordability and timely availability of fertilisers important for domestic production and food security.
Higher input costs can affect farmers’ production decisions, while shortages or delays in fertiliser distribution may create additional risks to crop yields.
The external pressures coincide with Ethiopia’s continuing macroeconomic reform programme, launched in July 2024, which includes a more market-determined foreign exchange regime, fiscal adjustments and efforts to address external debt vulnerabilities.
The government has been working with the IMF and World Bank to stabilise macroeconomic conditions, improve access to foreign financing and strengthen the country’s economic institutions. The World Bank has already provided substantial development financing to Ethiopia, including support for economic reforms, infrastructure, social protection and private sector development.
However, the emergency financing arrangements described by Banga are separate from the development funding already committed to the country.
For related coverage on global debt dynamics and macroeconomic stability, read our report on Developing Countries Spend Record Share of Revenue on Debt Interest as UNDP Warns of Poverty Risks or explore our update on Sub-Saharan Africa Growth Forecast Raised to 4.3 % for 2026, World Bank Says.
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