WASHINGTON (Reuters) - The World Bank said on Tuesday that it has cut loan fees and raised the maximum amount it would lend to a single country by $1 billion to $14.5 billion, reflecting an increase in its financial capacity.

The changes affect countries borrowing from International Bank for Reconstruction and Development (IBRD), the World Bank arm which lends to middle-income developing countries.

The institution's borrowing limit increase is the first such increase since the previous single borrower limit of $13.5 billion was set in 1997.

"We've been able to cut our fees and increase our capacity to lend which should help our ability to provide more resources for the poor in middle income developing countries," said John Wilton, the World Bank's Acting Chief Financial Officer and Vice President for Strategy, Finance and Risk Management.

"We've been able to do this because the Bank is adequately capitalized and has a favorable medium-term financial outlook," he said.

The fee cut affects all loans presented to the Bank's board from July 1, 2005 and applies through June 30, 2006, the Bank said in a statement.