The third tranche of debt service relief grants for 28 countries under the ‘Catastrophe Containment and Relief Trust’ has been approved by the Executive Board of International Monetary Fund.
This was disclosed in a statement the fund issued in Washington D.C. on Monday, hinting that the estimated amount to be disbursed was $238m.
The approval followed the April 13 and October 2, 2020 tranches, and would provide grants for debt service relief to countries hit by catastrophic events, including public health disasters such as Coronavirus Disease, the IMF said.
“This tranche of grants for debt service relief will continue to help free up scarce financial resources for vital emergency health, social and economic support to mitigate the impact of the COVID-19 pandemic.
“Subject to the availability of resources in the CCRT, debt service relief could be provided for the remaining period from October 16, 2021 to April 13, 2022 amounting to about $964m,” IMF explained.
According to the IMF, the beneficiaries of the third CCRT tranche include Afghanistan, Benin, Burkina Faso, Burundi, Central African Republic, Chad, Comoros, Democratic Republic of Congo, Djibouti, Ethiopia, The Gambia, Guinea and Guinea-Bissau.
Others are Haiti, Liberia, Madagascar, Malawi, Mali, Mozambique, Nepal, Niger, Rwanda, São Tomé and Príncipe, Sierra Leone, Solomon Islands, Tajikistan, Togo and Yemen.
In March 2020, IMF’s Managing Director, Kristalina Georgieva, had launched an urgent fund raising for $1.4bn in grants for the CCRT to provide financial assistance for relief on debt service for up to a maximum of two years.
Georgieva disclosed that the fund on Monday received the European Union’s contribution of $199m to the CCRT.
“The EU stands ready to disburse its remaining grant contribution in support of additional debt service relief in the context of potential future CCRT tranches.
“With this contribution, the EU, together with the EU institutions and its member states, has committed more than half of the current CCRT pledges,” Georgieva said.
The purpose of the debt relief initiative was to free up resources to meet exceptional balance of payment needs created by the disaster rather than having to allocate those resources to debt service, the fund stated.
Georgieva said that the EU’s contribution of $215m was critical to help the world’s most vulnerable countries cope with the impact of the COVID-19 crisis.
“I am grateful to the EU and its member states for their support and strong partnership. I urge other countries to contribute to the CCRT, so we can in turn support our most vulnerable member countries,” she added.
