Jakarta – The International Monetary Fund (IMF) sets a priority to help its member countries overcome the long-term problem of climate change. The IMF’s Executive Board has approved the creation of a new funding facility to help low- and mostly-middle-income countries deal with the impacts of climate change.
IMF Managing Director Kristalina Georgieva said in a written statement following the board meeting, the approval of the new resilience and sustainability trust. The aspiration is to build a Trust of at least USD 45 billion in resources or equivalent to IDR 645 trillion. She said the fund would amplify the impact of last year’s USD 650 billion IMF Special Drawing Rights allocation, by enabling wealthier members to channel their emergency reserves to enable vulnerable countries to address long-term challenges that threaten their economic stability.
“I am very pleased to announce that the IMF’s Executive Board today approved the creation of a new Resilience and Sustainability Trust (RST) to come into effect on May 1, 2022,” she said.
Regarding the technicalities of the program, IMF staff will elaborate on the details of this new funding facility in the next few months, following support from the Group of 20 major economies in October. An IMF staff paper prepared for the board and cited by Reuters said nearly three-quarters of the IMF’s 190 members would be eligible to borrow from a Resilience and Sustainability Trust (RST) agreement.
“This historic decision embodies the spirit of multilateralism. It shows when there is a need and there is a will, we can work together to achieve significant results for the benefit of all,” said Georgieva.
The RST, which was first proposed by the IMF last June, will fill the gap, offering more countries affordable financing over an extended payment period, with a maturity of 20 years and a grace period of 10.5 years. (Hartatik)
