Highlighting the importance of the package, IMF Managing Director Kristalina Georgieva said: “Our members today adopted a comprehensive reform and financing package for the Poverty Reduction and Growth Trust Fund (PRGF) to strengthen support of the IMF to low-income countries.
The new financing framework allows IMF net income and reserves to be used to increase subsidy resources for the PRGT over the next five years. Together with recent reform measures and previous bilateral fundraising, this expansion will help address financing shortfalls exacerbated by recent global crises.
“This agreement comes at a critical time, as low-income countries have suffered a series of unprecedented crises and face significant financing needs,” Georgieva said.
“The approved package will generate the concessional resources needed to ensure that the Fund can continue to support low-income countries to implement sound policies and build strong institutions.”
To better address diverse economic conditions in low-income countries, the reforms introduce a new interest rate mechanism that preserves interest-free loans for the poorest while adjusting terms for other low-income members.
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Georgieva said: “These reforms will help tailor IMF support to the specific needs of each country, recognizing the growing economic heterogeneity of low-income countries.”
The expanded structure of the PRGT is expected to attract more public and private financing, reinforcing the global commitment to low-income economies. Georgieva added: “Our global membership has once again demonstrated its shared commitment to supporting our low-income members in difficult economic times.”
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