## _031611 - Executive Summary

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### Executive Summary — key facts and purpose
- Limited gold sale completed in December 2010: 403 metric tons sold.
- Total proceeds from sale: SDR 9.54 billion.
- Book value: SDR 2.69 billion.
- Total profits from the gold sale: SDR 6.85 billion.
- FY 2010 gold sales profits placed in special reserve: SDR 3.8 billion.
- Main purpose: generate profits to fund an endowment to diversify the Fund’s income away from lending income.
- Board agreement (July 2009) linked resources from the gold sale to boosting concessional lending capacity for low-income countries (LICs).
- Windfall profits defined relative to a benchmark average gold price of US$935 per ounce (and originally US$850 per ounce in the April 2008 income model).
- Estimated windfall profits above the US$935 per ounce benchmark: about SDR 1.75 billion.
- Paper focuses on options for use of the windfall profits above amounts already envisaged (including SDR 0.5–0.6 billion in PRGT subsidies agreed in July 2009).

### I. Introduction and structure
- Gold sale completed in December 2010 with total profits of SDR 6.85 billion.
- Paper reviews:
  - Rationale for the sale,
  - Prior agreements on use of profits (gold endowment and concessional lending support),
  - Options for remaining windfall profits.
- Structure: background (Section II), options for use including windfall (Section III), conclusions and issues for discussion (Section IV).

### II. Background and timeline
- April 2008: Executive Board endorsed key features of a new income model centered on an endowment funded by limited gold sales.
- Sale scope: ring-fenced to gold acquired since Second Amendment of the Articles — 403 metric tons (one-eighth of total holdings).
- Amendment of the Articles approved May 2008 to expand investment authority to permit an endowment.
- September 2009: Board agreed modalities and safeguards for a limited gold sale; sale executed October 2009–December 2010.
- Market prices rose during the sale period; average sale price achieved: US$1,144 per ounce.
- April 2010: Board placed FY 2010 net income equivalent to FY 2010 gold profits (SDR 3.8 billion) in the special reserve.
- March 2, 2011: Total profits SDR 6.85 billion transferred to the Investment Account (IA) and are being invested on an interim basis pending adoption of endowment rules.

### III. Use of the Gold Profits — framework and options

- Minimum size of the gold endowment
  - Endowment projections based on assumed average sales price of US$850 per ounce (April 2008 assumption).
  - Staff latest calculations: endowment consistent with US$850 per ounce assumption would be SDR 4.4 billion.
  - Decisions to establish endowment and allocate profits to it expected in context of new IA rules and regulations.

- Agreed strategy under the 2009 LIC financing package
  - 2009 financing package aimed to raise SDR 1.5 billion in PRGT subsidy resources through a mix of sources:
    - resources linked to gold sales (SDR 0.5–0.6 billion in end-2008 NPV terms),
    - transfer of SDR 0.62 billion from the Reserve Account (RA),
    - delayed resumption of PRGT reimbursement to the GRA (SDR 0.15–0.2 billion),
    - new bilateral contributions (SDR 0.2–0.4 billion).
  - Pledges to date: SDR 151 million from 22 members toward bilateral contributions.
  - Mechanism for using gold-linked resources for PRGT subsidies: indirect distribution to members in proportion to quotas, with members requested to return resources (or equivalent amounts) as subsidy contributions.
  - Leakage in the distribution-return mechanism was previously considered; example assumption: limit leakage to 10 percent, implying a distribution of about SDR 0.6–0.7 billion in end-2008 NPV terms.
  - An average gold sales price of US$935 per ounce was estimated to be sufficient to cover the endowment assumption plus the distribution for PRGT subsidies.

- Options for the use of the remaining windfall profits (remaining windfall estimated at SDR 1.75 billion)
  - Option 1 — Active use to boost PRGT capacity
    - Use IA resources linked to the windfall to narrow or close projected gap in PRGT capacity to assist LICs beyond 2014.
    - Context: 2009 package raised concessional lending capacity to US$17 billion through 2014 (SDR 11.3 billion), averaging about SDR 1.9 billion a year for 2009–14.
    - Without further action, PRGT’s lending capacity would fall sharply after 2014 to SDR 0.7 billion (equivalent to SDR 0.5 billion in constant SDR terms), based on a self-sustained strategy using income on RA resources (RA currently about SDR 4 billion).
    - Updated demand projections 2009–14: new PRGT concessional lending commitments were SDR 3.7 billion in 2009–10; projected demand about SDR 2.0 billion for 2011; financing demand for 2012–14 expected to be somewhat higher than earlier projections by about SDR 0.4 billion a year.
    - With an indirect transfer mechanism and assuming contributions equivalent to 90 percent of the distribution are returned, the PRGT’s self-sustained annual concessional lending capacity would increase to SDR 1.1 billion.
    - SDR 1.1 billion would be broadly adequate to meet the lower end of projected LIC demand for concessional loans during 2015–34.
  - Option 2 — Passive: retain profits in IA as precautionary balances
    - Keep windfall profits in the IA and count them towards precautionary balances to protect against financial risks, including increased credit risks arising from crisis-related lending.
    - Context:
      - Board review in September 2010: most Directors considered prudent to raise the indicative target for precautionary balances to SDR 15 billion; some preferred revisiting when target of SDR 10 billion reached.
      - Current precautionary balances are SDR 7.32 billion.
      - Total commitments now amount to SDR 171 billion, up from SDR 144 billion in September.
      - Credit outstanding is projected to peak at SDR 94 billion compared with SDR 78 billion previously.
      - Projected reserve accumulation under existing policies: precautionary balances will not reach SDR 10 billion until FY 2013 and the indicative target of SDR 15 billion only by FY 2016.
    - Effect of adding windfall to precautionary balances:
      - Precautionary balances would increase by 24 percent to SDR 9.07 billion.
      - Timetable for reaching targets would be brought forward by about one year.
    - Implementation: place (or retain) amounts equivalent to profits in the “reserves” or “non-endowment” portfolio of the IA and count them toward precautionary balances; no formal Board decision required to count this portion as precautionary balances.
  - Option 3 — Passive/default: add windfall to IA gold endowment
    - Add the windfall profits to the IA gold endowment as a permanent part of the Fund’s financing structure to help ensure a sustainable and diversified income base.
    - Adding remaining windfall to the endowment would increase endowment size by about 40 percent, from SDR 4.4 billion to SDR 6.1 billion.
    - Baseline steady state estimates assume:
      - endowment funded with gold sale profits at an average price of US$850 per ounce,
      - pay-out ratio of 3 percent.
    - Benefits: larger buffer to help ensure a sustainable and diversified income base and a modest buffer against adverse developments and lower investment returns.
    - Decisions required:
      - No new Board decision beyond those envisaged to formulate an IA investment strategy and adopt IA rules/regulations (these require a 70 percent majority of total voting power).
      - Pending adoption, windfall profits are to be invested pursuant to current IA rules and regulations unless Board decides on an interim strategy.
      - As part of FY 2011 net income disposition decisions, Board could decide to transfer amount equivalent to full windfall profits to the special reserve.
  - Combinations and sequencing
    - Options are not mutually exclusive; combinations feasible (e.g., part to endowment and part to boost PRGT; initially to precautionary balances and later used to boost PRGT once uncertainties abate).
    - Single larger distribution could combine existing commitment and additional windfall to streamline assurances and avoid multiple protracted processes that may require members’ legislative approvals.
  - Other potential uses briefly considered
    - Additional interest relief on PRGT credits: 2009 financing package provided interest relief on all PRGT credits through end-CY 2011; consideration to extend relief for a further 3 years; estimated cost about SDR 70 million.
    - Replenish PCDR resources: PCDR Trust balance is now SDR 102 million; illustration: a transfer of SDR 100 million would augment PCDR Trust resources to meet cost of debt stock relief for a “large” future case.
    - Provide higher concessionality to the poorest LICs.
    - Less efficient or problematic options noted: create post-MDRI debt relief mechanism; provide Fund support as grants rather than concessional loans; fund technical assistance from one-off distribution; debt relief for protracted arrears cases — staff analysis notes limitations, potential leakage, and inefficiencies.

### Longer-term demand, PRGT capacity gap, and implications
- Staff projections suggest loan demand could average between SDR 1.1–1.9 billion a year through 2034, equivalent to SDR 0.9–1.4 billion in constant SDR terms.
- Projections account for factors reducing demand: improved macroeconomic conditions in many LICs; increased demand for nonfinancing programs; more episodic use of Fund financial support; winding down of the Heavily Indebted Poor Countries (HIPC) Initiative; expanded use of PRGT/GRA blend arrangements; graduation of countries from PRGT eligibility (significant effect on total demand not until around 2024).
- Projections also reflect factors increasing demand: growing size of LIC economies; greater exposure of LICs to shocks from integration into global goods and capital markets; increased volatility of commodity prices → higher demand for “shock mitigation” financing in stress periods.
- Note: more than half of currently PRGT-eligible countries would likely still be PRGT eligible in 2035.
- PRGT’s self-sustained concessional lending capacity would fall far short of projected needs beyond 2014:
  - For 2015-24, concessional lending capacity would be only 29 percent of the historical lending volume (2001–10).
  - For 2015-24, concessional lending capacity would be only 21 percent of projected lending during 2009–14.
- Increasing exposure of LICs to global volatility implies rising variability of demand for IMF concessional financing, requiring larger PRGT capacity for a given long-run average demand.

### Windfall accounting, totals, and remaining amounts
- Total profits from limited gold sale: SDR 6.85 billion.
- Prior Board discussions imply at least SDR 4.4 billion to endowment and SDR 0.6–0.7 billion for 2009 LIC financing package (distribution to members to generate PRGT subsidies).
- Remaining windfall after these uses: about SDR 1.75 billion.

### Key statistics and projections (selected)
- Gold sold: 403 metric tons.
- Total proceeds from sale: SDR 9.54 billion.
- Book value: SDR 2.69 billion.
- Profits: SDR 6.85 billion.
- FY 2010 gold sales profits placed in special reserve: SDR 3.8 billion.
- Endowment consistent with US$850 per ounce: SDR 4.4 billion.
- Windfall profits above US$935 per ounce benchmark: about SDR 1.75 billion.
- Agreed PRGT subsidy target from gold-linked resources: SDR 0.5–0.6 billion (end-2008 NPV terms).
- LIC concessional lending capacity target (2009–14): US$17 billion = SDR 11.3 billion (about SDR 1.9 billion a year).
- Projected PRGT lending capacity after 2014 without further measures: SDR 0.7 billion (equivalent to SDR 0.5 billion in constant SDR terms).
- Pledges for bilateral contributions to PRGT mobilization: SDR 151 million from 22 members.
- Current precautionary balances: SDR 7.32 billion.
- Proposed indicative target for precautionary balances discussed by Board: SDR 15 billion.
- Total commitments now amount to SDR 171 billion; credit outstanding projected to peak at SDR 94 billion.

### IV. Conclusions and issues for Directors
- Board decisions still required on:
  - Establishment and minimum size of the IA endowment consistent with prior assumptions (US$850 per ounce benchmark).
  - Whether to proceed with distributions and related transfers to generate agreed PRGT subsidies (SDR 0.5–0.6 billion) given completed sale outcomes.
  - How to use the estimated SDR 1.75 billion windfall profits: active expansion of PRGT capacity, retention as precautionary IA balances, addition to the endowment, or some combination.
- Staff to return with specific proposals based on Directors’ views.
- Questions posed to Directors include:
  - Do Directors agree that at least SDR 4.4 billion of the proceeds should be used to fund an endowment to generate investment returns while preserving long-term value?
  - Do Directors agree that at least SDR 0.6–0.7 billion of the profits should be used to generate resources for PRGT subsidies in line with the 2009 LIC financing package?
  - How do Directors assess the relative merits of the alternative options identified for use of the remaining windfall profits of about SDR 1.75 billion?
  - If Directors support using part or all of the remaining windfall to boost the Fund’s capacity to support LICs, which options do they prefer? Would they favor proceeding now with a decision to distribute the full amount to members upon receipt of satisfactory assurances, or favor a different timing strategy for the distribution?

*Source: _031611 - Executive Summary.*

### Executive Summary ......................................................................................................

### _031611 - Executive Summary

### Executive Summary
- Limited gold sale completed in December 2010: 403 metric tons sold.
- Total profits from the gold sale: SDR 6.85 billion.
- Main purpose: generate profits to fund an endowment to diversify the Fund’s income away from lending income.
- Board agreement (July 2009) linked resources from the gold sale to boosting concessional lending capacity for low-income countries (LICs).
- Windfall profits defined relative to a benchmark average gold price of US$935 per ounce (and originally US$850 per ounce in the April 2008 income model).
- Estimated windfall profits above the US$935 per ounce benchmark: about SDR 1.75 billion.
- Paper focuses on options for use of the windfall profits above the amounts already envisaged (including SDR 0.5–0.6 billion in PRGT subsidies agreed in July 2009).

### I. Introduction
- Gold sale completed in December 2010 with total profits of SDR 6.85 billion.
- Paper reviews rationale for the sale, prior agreements on use of profits (gold endowment and concessional lending support), and focuses on options for remaining windfall profits.
- Structure: background (Section II), options for use including windfall (Section III), conclusions and issues for discussion (Section IV).

### II. Background
- April 2008: Executive Board endorsed key features of a new income model centered on an endowment funded by limited gold sales.
- Sale scope: ring-fenced to gold acquired since Second Amendment of the Articles — 403 metric tons (one-eighth of total holdings).
- Amendment of the Articles approved May 2008 to expand investment authority to permit an endowment.
- September 2009: Board agreed modalities and safeguards for a limited gold sale; sale executed October 2009–December 2010.
- Market prices rose during the sale period; average sale price achieved: US$1,144 per ounce.
- Total proceeds: SDR 9.54 billion; book value: SDR 2.69 billion; profits: SDR 6.85 billion.
- April 2010: Board placed FY 2010 net income equivalent to FY 2010 gold profits (SDR 3.8 billion) in the special reserve.
- March 2, 2011: Total profits SDR 6.85 billion transferred to the Investment Account (IA) and are being invested on an interim basis pending adoption of endowment rules.

### III. Use of the Gold Profits

A. Minimum Size of the Gold Endowment
- Endowment projections based on assumed average sales price of US$850 per ounce (April 2008 assumption).
- Staff latest calculations: endowment consistent with US$850 per ounce assumption would be SDR 4.4 billion.
- Decisions to establish endowment and allocate profits to it expected in context of new IA rules and regulations.

B. Agreed Strategy Under the 2009 LIC Financing Package
- 2009 financing package aimed to raise SDR 1.5 billion in PRGT subsidy resources through a mix of sources:
  - resources linked to gold sales (SDR 0.5–0.6 billion in end-2008 NPV terms),
  - transfer of SDR 0.62 billion from the Reserve Account (RA),
  - delayed resumption of PRGT reimbursement to the GRA (SDR 0.15–0.2 billion),
  - new bilateral contributions (SDR 0.2–0.4 billion).
- Pledges to date: SDR 151 million from 22 members toward bilateral contributions.
- Mechanism for using gold-linked resources for PRGT subsidies: indirect distribution to members in proportion to quotas, with members requested to return resources (or equivalent amounts) as subsidy contributions.
- Leakage in the distribution-return mechanism was previously considered; example assumption: limit leakage to 10 percent, implying a distribution of about SDR 0.6–0.7 billion in end-2008 NPV terms.
- An average gold sales price of US$935 per ounce was estimated to be sufficient to cover the endowment assumption plus the distribution for PRGT subsidies.

C. Options for the Use of the Remaining Windfall Profits
- Remaining windfall profits estimated at SDR 1.75 billion.
- Three broad options identified:
  Option 1 — Active use to boost PRGT capacity
  - Use IA resources linked to the windfall to narrow or close projected gap in PRGT capacity to assist LICs beyond 2014.
  - Context: 2009 package raised concessional lending capacity to US$17 billion through 2014 (SDR 11.3 billion), averaging about SDR 1.9 billion a year for 2009–14.
  - Without further action, PRGT’s lending capacity would fall sharply after 2014 to SDR 0.7 billion (equivalent to SDR 0.5 billion in constant SDR terms), based on a self-sustained strategy using income on RA resources (RA currently about SDR 4 billion).
  - Updated demand projections 2009–14: new PRGT concessional lending commitments were SDR 3.7 billion in 2009–10; projected demand about SDR 2.0 billion for 2011; financing demand for 2012–14 expected to be somewhat higher than earlier projections by about SDR 0.4 billion a year.
  Option 2 — Passive: retain profits in IA as precautionary balances
  - Keep windfall profits in the IA and count them towards precautionary balances to protect against financial risks, including increased credit risks arising from crisis-related lending.
  Option 3 — Passive/default: add windfall to IA gold endowment
  - Add the windfall profits to the IA gold endowment as a permanent part of the Fund’s financing structure to help ensure a sustainable and diversified income base.
- Options are not mutually exclusive; combinations feasible (e.g., initially add to precautionary balances, later use related resources to boost PRGT once uncertainties abate).
- Other potential uses briefly considered:
  - Providing additional interest relief on PRGT credits.
  - Augmenting the Post-Catastrophe Debt Relief (PCDR) Trust.
  - Other possibilities for using resources linked to the gold sale in support of LICs.

Key statistics and projections (selected)
- Gold sold: 403 metric tons.
- Total proceeds from sale: SDR 9.54 billion.
- Book value: SDR 2.69 billion.
- Profits: SDR 6.85 billion.
- FY 2010 gold sales profits placed in special reserve: SDR 3.8 billion.
- Endowment consistent with US$850 per ounce: SDR 4.4 billion.
- Windfall profits above US$935 per ounce benchmark: about SDR 1.75 billion.
- Agreed PRGT subsidy target from gold-linked resources: SDR 0.5–0.6 billion (end-2008 NPV terms).
- LIC concessional lending capacity target (2009–14): US$17 billion = SDR 11.3 billion (about SDR 1.9 billion a year).
- Projected PRGT lending capacity after 2014 without further measures: SDR 0.7 billion (equivalent to SDR 0.5 billion in constant SDR terms).
- Pledges for bilateral contributions to PRGT mobilization: SDR 151 million from 22 members.

### IV. Conclusion and Issues for Discussion
- Board decisions still required on:
  - Establishment and minimum size of the IA endowment consistent with prior assumptions (US$850 per ounce benchmark).
  - Whether to proceed with distributions and related transfers to generate agreed PRGT subsidies (SDR 0.5–0.6 billion) given completed sale outcomes.
  - How to use the estimated SDR 1.75 billion windfall profits: active expansion of PRGT capacity, retention as precautionary IA balances, addition to the endowment, or some combination.
- Staff to return with specific proposals based on Directors’ views.

*Source: _031611 - Executive Summary.*

### 17.      However, staff projections suggest that longer-term demand would be well above

### _031611 - 17.      However, staff projections suggest that longer-term demand would be well above

### Longer-term demand and projections
- Staff projections suggest loan demand could average between SDR 1.1–1.9 billion a year through 2034, equivalent to SDR 0.9–1.4 billion in constant SDR terms.
- Projections account for factors that reduce demand over time:
  - improved macroeconomic conditions in many LICs,
  - increased demand for nonfinancing programs,
  - more episodic use of Fund financial support,
  - winding down of the Heavily Indebted Poor Countries (HIPC) Initiative,
  - expanded use of PRGT/GRA blend arrangements,
  - graduation of countries from PRGT eligibility (with significant effect on total demand not until around 2024).
- Projections also reflect factors increasing demand:
  - growing size of LIC economies,
  - greater exposure of LICs to shocks from integration into global goods and capital markets,
  - increased volatility of commodity prices → higher demand for “shock mitigation” financing in stress periods.
- Note: more than half of currently PRGT-eligible countries would likely still be PRGT eligible in 2035.

### PRGT capacity gap and implications
- The PRGT’s self-sustained concessional lending capacity would fall far short of projected needs beyond 2014.
- Relative measures:
  - For 2015-24, concessional lending capacity would be only 29 percent of the historical lending volume (2001–10).
  - For 2015-24, concessional lending capacity would be only 21 percent of projected lending during 2009–14.
- Increasing exposure of LICs to global volatility implies rising variability of demand for IMF concessional financing, requiring larger PRGT capacity for a given long-run average demand.

### Option 1: Use windfall profits to boost PRGT capacity
- Resources linked to remaining windfall profits could boost PRGT capacity by over 50 percent via an indirect transfer mechanism (distribution to membership with understanding members return equivalent amounts as PRGT subsidies).
- Importance of minimizing leakage by obtaining satisfactory assurances from members prior to distribution that they will return equivalent resources as PRGT contributions.
- Assuming contributions equivalent to 90 percent of the distribution are returned, the PRGT’s self-sustained annual concessional lending capacity would increase to SDR 1.1 billion.
- SDR 1.1 billion would be broadly adequate to meet the lower end of projected LIC demand for concessional loans during 2015–34.

### Option 2: Add windfall profits to boost precautionary balances
- Context:
  - Board review in September 2010: most Directors considered prudent to raise the indicative target for precautionary balances to SDR 15 billion; some preferred revisiting when target of SDR 10 billion reached.
  - Current precautionary balances are SDR 7.32 billion.
- Credit risk and commitments:
  - Total commitments now amount to SDR 171 billion, up from SDR 144 billion in September.
  - Credit outstanding is projected to peak at SDR 94 billion compared with SDR 78 billion previously.
- Projected reserve accumulation under existing policies:
  - Precautionary balances will not reach SDR 10 billion until FY 2013.
  - Precautionary balances reach the indicative target of SDR 15 billion only by FY 2016.
- Effect of adding windfall to precautionary balances:
  - Precautionary balances would increase by 24 percent to SDR 9.07 billion.
  - Timetable for reaching targets would be brought forward by about one year.
- Implementation: place (or retain) amounts equivalent to profits in the “reserves” or “non-endowment” portfolio of the IA and count them toward precautionary balances; no formal Board decision required to count this portion as precautionary balances.

### Option 3: Add windfall profits to the endowment
- Original new income model discussions envisaged transferring all profits from the gold sale to the endowment.
- Amendment expanding investment mandate requires profits from limited gold sales be transferred to the IA; this was done on March 2, 2011.
- Adding remaining windfall to the endowment would increase endowment size by about 40 percent, from SDR 4.4 billion to SDR 6.1 billion.
- Baseline steady state estimates assume:
  - endowment funded with gold sale profits at an average price of US$850 per ounce,
  - pay-out ratio of 3 percent.
- Benefits:
  - Larger buffer to help ensure a sustainable and diversified income base.
  - Provides a modest buffer against adverse developments and lower investment returns.
- Decisions required:
  - No new Board decision beyond those envisaged to formulate an IA investment strategy and adopt IA rules/regulations (these require a 70 percent majority of total voting power).
  - Pending adoption, windfall profits are to be invested pursuant to current IA rules and regulations unless Board decides on an interim strategy.
  - As part of FY 2011 net income disposition decisions, Board could decide to transfer amount equivalent to full windfall profits to the special reserve.

### Combinations and sequencing
- Options are not mutually exclusive; combinations possible:
  - Part of windfall to endowment and part to boost PRGT.
  - Initially add windfall to precautionary balances and subsequently use same resources to boost PRGT capacity via distribution/return mechanism once GRA loan demand uncertainties abate.
- Single larger distribution could combine existing commitment and additional windfall to streamline assurances and avoid multiple protracted processes that may require members’ legislative approvals.

### Other potential uses for windfall profits to assist LICs
- Additional interest relief:
  - 2009 financing package provided interest relief on all PRGT credits through end-CY 2011.
  - Consideration to extend relief for a further 3 years; estimated cost about SDR 70 million.
  - If 2009 financing package is completed, extension could be temporarily funded using available subsidy resources in the General Subsidy Account provided the Account is reimbursed (through the indirect mechanism) by early 2014.
- Replenish PCDR resources:
  - PCDR Trust balance is now SDR 102 million.
  - Illustration: a transfer of SDR 100 million would augment PCDR Trust resources to meet cost of debt stock relief for a “large” future case.
- Provide higher concessionality to the poorest LICs:
  - Consider higher concessionality given inherent fragilities and rationale similar to blending policy differentiating financing terms by per capita income.
- Other less efficient or problematic options:
  - Create post-MDRI debt relief mechanism — staff analysis suggests most LICs can reduce debt vulnerabilities through existing mechanisms, growth, fiscal consolidation, and increased concessionality from creditors; IMF debt share likely small in most cases.
  - Provide Fund support as grants rather than concessional loans — grants would undermine Fund’s role and are less efficient; concessional loans leverage subsidy resources by 4-5 times.
  - Fund technical assistance financed from one-off distribution — could undermine sustainable donor-funded TA.
  - Debt relief for protracted arrears cases (Sudan, Somalia, Zimbabwe) — limited IMF resources and potential leakage argue against earmarking scarce resources.

### Windfall accounting, totals, and remaining amounts
- Total profits from limited gold sale: SDR 6.85 billion.
- Prior Board discussions imply at least SDR 4.4 billion to endowment and SDR 0.6–0.7 billion for 2009 LIC financing package (distribution to members to generate PRGT subsidies).
- Remaining windfall after these uses: about SDR 1.75 billion.

### Conclusion and issues for discussion (questions posed to Directors)
- Do Directors agree that at least SDR 4.4 billion of the proceeds should be used to fund an endowment to generate investment returns while preserving long-term value?
- Do Directors agree that at least SDR 0.6–0.7 billion of the profits should be used to generate resources for PRGT subsidies in line with the 2009 LIC financing package?
- How do Directors assess the relative merits of the alternative options identified for use of the remaining windfall profits of about SDR 1.75 billion?
- If Directors support using part or all of the remaining windfall to boost the Fund’s capacity to support LICs, which options do they prefer? Would they favor proceeding now with a decision to distribute the full amount to members upon receipt of satisfactory assurances, or favor a different timing strategy for the distribution?

*Source: IMF staff paper excerpt (031611).*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2011/_031611.pdf_