Bangladesh becomes first Asian country to receive loan from IMF's 'Resilience and Sustainability Fund'
Bangladesh has become the first country in Asia to receive a loan ($1.4 billion) from International Monetary Fund's (IMF) "Resilience and Sustainability Fund" (RSF).
The multilateral lender, on Monday (30 January), approved Bangladesh loans of $3.3 billion under the Extended Credit Facility (ECF) and the Extended Fund Facility (EFF) and about $1.4 billion under the RSF.
According to the IMF, the RSF arrangement with Bangladesh will supplement the resources made available under the ECF/EFF to expand the fiscal space to finance climate investment priorities identified in the authorities' plans, help catalyze additional financing, and build resilience against long-term climate risks.
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"With the approval of a $1.4 billion loan under the RSF, Bangladesh became the first country in Asia to receive a loan from the fund created for low and middle-income countries that are at risk due to climate change.
"The authorities [Bangladesh] recognise that in addition to tackling these immediate challenges, long-standing structural issues and vulnerabilities related to climate change will also need to be addressed to accelerate growth, attract private investment, enhance productivity, and build climate resilience," IMF Deputy Managing Director (DMD) Antoinette Monceau Sayeh said in a press release.
The RSF fund is for countries with low incomes, high debt burdens, high costs to deal with climate change risks, and deficits in development spending.
The first country in the world to receive this IMF loan was Barbados, followed by Costa Rica and Rwanda.
IMF approved the RSF fund – for low and middle-income countries that are at risk due to climate change – on 13 April 2022, and it became effective on 1 May 2022.
