Poverty Reduction and Growth Trust (PRGT)

What's the PRGT?

The PRGT is the Fund’s main vehicle for providing concessional financing (currently at zero interest rates) to low-income countries (LICs).

The PRGT’s interest-free loans support well-designed economic programs that help catalyze additional financing from donors, development institutions, and the private sector. PRGT-supported programs also play a central role in creating the environment for successful debt resolution in distressed countries.

And—as seen during the pandemic—the PRGT can also provide emergency support when shocks hit.

At the onset of COVID-19, the IMF rapidly scaled up emergency financing and program support through the PRGT, with new commitments reaching almost $9 billion (6.5 billion special drawing rights) in 2020 alone. Since the start of the pandemic, the IMF has supported more than 50 LICs with some $29 billion (SDR 22 billion) in interest-free loans via the PRGT—thus helping to stave off instability in a wide range of the world’s poorest nations, from Haiti to the Democratic Republic of Congo and Nepal. And with low-income countries’ financing needs rising fast, demand for PRGT lending is projected to reach nearly $40 billion (SDR 30 billion) in 2020-24, more than four times the historical average. 

Video: What is the PRGT?

PRGT Funding

The PRGT must be adequately funded and subsidized so that this vital source of interest-free financing can continue and help address the challenges facing LICs which were growing fast before the pandemic. PRGT subsidies have a strong multiplier effect. Each $1 of subsidy resources mobilized allows the PRGT to provide about $5 in zero-interest lending.

Currently, the PRGT is in urgent need of replenishment. The success of our 2021 landmark reforms to the PRGT to speed up LICs’ recovery from the pandemic depends on a funding strategy that identified a need to raise about $16.8 billion (SDR 12.6 billion) in loan resources and $3.1 billion (SDR 2.3 billion) in subsidy resources. While the target for loan resources has been recently met, thanks to an additional loan pledge by Japan of SDR 1 billion, much more is needed to close the remaining funding shortfall in subsidy resources.

PRGT Pledges under the 2021 fundraising round (as of November 17, 2023) 1
Contributors In SDR millions In USD millions 
Subsidy Target 2,300 3,052
Total Subsidy Pledges 2/ 2,300  3,052
 Australia* 3/  36  48
 BOTSWANA 1 1
 BULGARIA 5 7
 Canada*  60  79
 China*3/  168 223
Cyprus 2 3
 Denmark  19 25
 Estonia*3/  0.4 0.5
 France* 107 141
 Germany* 147 196
 Greece*4/ 19 25
 Hungary 11 15
 Ireland* 19 26
 Italy* 83 110
 Japan*5/  480  636

 Korea

41 55
 Latvia* 2 3
 Lithuania* 2 3
 Malta* 1 1
 Mauritius 1 1
 Morocco* 3/ 0.2 0.2
 Netherlands* 36 47
 Norway* 9 12
 Oman3/ 18 24
 Philippines*  4  5
 Portugal*3/  11  15
 Qatar6/ 25 33
 Singapore  21  28
 Slovak Republic*  6  8
 Slovenia  3  4
 Spain*  51  67
 Sweden*  22  29
 Switzerland*  42  56
 Thailand*  8  11
 Trinidad and Tobago  3  4
 United Kingdom* 6/  250  332
 United States*  55  73
 European CoMmission*  78  103
Additional pledges 7/ 455 604
  of which, subsidy contributions effected 1,391 1,846
Loans target 12,600 16,720
Total Loan Pledges 12,750 16,919
 Australia*  500  663
 Belgium*  250  332
 Canada*  500  663
 China*  1,000 1,327
 Denmark  150 199
 Finland*  300 398
 France* 1,000 1,327
 Italy* 1,000 1,327
 Japan* 2,000 2,654
 Korea 450 597
 Netherlands * 500 663
 Norway* 150 199
Qatar6/ 150 199
 Saudi Arabia* 8/  2,800  3,715
 Spain*  350  464
 Sweden*  150  199
 United Kingdom* 6/  1,500  1,990
  of which, effective agreements 12,150 16,122

* Effective pledges / agreements, including cases of multiple contributions where a portion is not yet effective.
1/ Based on SDR/US$ exchange rate as of December 5, 2023. 
2/ Including grant contributions received and to be received in future installments.
3/ To be generated over time in the form of net investment earnings from effected deposit and investment agreements. 
4/ Greece has provided a subsidy grant of SDR 13 million to the PRGT and has pledged to channel SDR 150 million to the PRGT Deposit and Investment Account. This deposit is expected to generate an additional SDR 6 million in subsidies over time in the form of net investment earnings. 
5/ Includes SDR 96 million in grants already disbursed and about SDR 384 million to be generated over time in the form of net investment earnings from a deposit agreement.
6/ The loan resources by Qatar and the United Kingdom have been provided at a concessional rate and are estimated will generate about SDR 25 million and SDR 250 million in implicit subsidies, respectively, subject to SDR interest rate assumptions.
7/ These include informal indications of intentions to pledge and pledges subject to completion of domestic procedures. Some of the amounts are based on Fund staff estimates.
8/ The loan resources by Saudi Arabia have been provided under three separate borrowing agreements (SDR 550 million, SDR 225 million, and SDR 2,025 million).

How to contribute

Donors will have flexibility regarding their subsidy contributions, with contributions to be pledged upfront and disbursed over time. Contributions options include:

Budgetary grants Concessional loans Desposits and investments 
• Possibly in installments over several years • PRGT loan resources provided at below the SDR rate • This generates income for PRGT subsidization
• A new Subsidy Reserve Account can receive grants that help finance subsidization of PRGT loans while also bolstering reserve coverage of PRGT credit • Loans from contributors provided at low fixed rate of remuneration can save PRGT subsidy expenses and generate implicit subsidies • Long-term deposits in the PRGT’s Deposit and Investment Account or long-term investments in PRGT assets remunerate contributors while generating additional investment earnings that would be transferred as subsidy resources to the PRGT