The World Bank has cut the price it charges on its loans to emerging countries by 25 basis points in the first reduction in nine years.
The move, confirmed by president Robert Zoellick last night, is part of the bank's strategy to simplify its pricing structure and increase its business with 79 states it classifies as middle-income countries, including China, India, Brazil, Russia, South Africa and Mexico.
"The board agreed to vastly simplify and do away with most of the fees and waivers and just have an upfront commitment fee and a spread over our borrowing, which will enable us to cut prices back to 1998 levels," Mr Zoellick said.
He also announced the World Bank would more than double to $3.5 billion (€2.46bn) its contribution to the International Development Association (IDA), the World Bank's facility that provides loans and grants to its poorest borrowers.
The announcement comes as major donor countries negotiate new money to cover IDA's lending from 2009 to 2011.
In addition, Mr Zoellick said the bank had approved $100 million for an infrastructure fund for poor countries aimed at spurring economic development.