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Spain Champions Support for Enhanced IMF-WBG Framework: Raising SDR Impact
May 31, 2024
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IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: Julie Ziegler
Phone: +1 202 623-7100Email: MEDIA@IMF.org
May 31, 2024
PRESS OFFICER: Julie Ziegler
Phone: +1 202 623-7100Email: MEDIA@IMF.org
Spain champions the call to step up the impact of Special Drawing Rights (SDRs) through the International Monetary Fund (IMF) and the World Bank Group (WBG)’s enhanced framework for scaled-up climate action—the principles of which were recently announced—and plans to double its SDR contribution to the IMF’s Resilience and Sustainability Trust (RST). The country-led framework will optimize the resources the two institutions are dedicating to helping countries tackle climate challenges, including the IMF’s RST as well as the WBG’s policy and project financing, and additional resources from development partners and the private sector.
“Spain continues to champion the need for further progress in channeling SDRs and today reaffirms its commitment to multilateralism, with a substantial contribution to the RST, whose impact is expected to be further deepened with the implementation of an enhanced cooperation framework between the IMF and the World Bank. To this end, and after completing all national procedures, Spain will channel SDR 1.5 billion to the RST in support of climate policies identified by the national authorities with joint support by the World Bank and the IMF as the framework is operationalized. Last year during the Annual meetings in Marrakech, Spain raised its pledge to channel up to 50 percent of its 2021 SDR allocation, and today´s announcement underscores its support to stronger collaboration between Bretton Woods Institutions and their respective memberships, to effectively tackle climate action. Spain encourages others to join in supporting the new framework and making additional pledges to the RST alongside supporting the WBG’s financial capacity, including through its new financial instruments, as well as the IDA21 replenishment, highlighting the need for more innovative efforts to meet growing financing demands by most vulnerable countries.” —Minister of Economy, Trade and Business, Carlos Cuerpo.
The enhanced framework will accelerate country-led climate action—raising the effectiveness of SDRs channeled to the RST and the World Bank’s policy and project financing. It is also expected to help mobilize further financing—including from bilateral donors, multilateral development banks, and the private sector.
“Spain's commitment to multilateralism, alongside the strong collaboration between the World Bank and IMF, is a powerful example of how we can collectively accelerate climate action in developing countries. By working together, we can unlock critical resources and expertise to help build a more resilient and sustainable future." —World Bank Group President Ajay Banga.
“I welcome Spain’s leadership on SDR channeling and support for the enhanced framework for IMF-World Bank Group collaboration. The IMF’s RST is a key vehicle for providing policy support for climate action in emerging and developing economies and more contributions are needed to meet the strong demand from countries.”—IMF Managing Director Kristalina Georgieva.
Generous pledges to the RST from 23 countries—including emerging market countries—are already supporting countries’ climate action. Since it became operational in October 2022, 18 countries have already benefitted from the RST and more than 30 countries are expected to make requests in the near future.
These efforts complement sizeable climate finance packages provided to countries by the WBG, which aims to provide 45 percent of its annual financing to climate by 2025. The WBG is also implementing other measures to support climate action, including hybrid capital, portfolio guarantees, adjustments to its equity-to-loan ratio, and a new financial incentive framework for global challenges, while raising funds for a robust IDA21 replenishment.
The IMF and the WBG appreciate the support of member countries and are working to quickly operationalize the joint enhanced framework for climate action.
