Spain leads support for the reinforced IMF-World Bank Group framework, increasing the impact of SDRs

For improved climate action

Spain has announced a significant increase in its contribution to the Resilience and Sustainability Fund (RST) of the International Monetary Fund (IMF) and has urged other countries to follow its example.

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This commitment is part of the reinforced framework of the IMF and the World Bank Group (WBG) for enhanced climate action, which is expected to increase the impact of Special Drawing Rights (SDR).

 

Spain will channel 1.500 billion SDR to the RST, doubling its previous commitment. This increase in funds will support climate policies identified by national authorities, with joint support from the World Bank and the IMF as the strengthened framework is implemented.

 

The Minister of Economy, Commerce and Business, Charles Body, has stated that "Spain continues to lead the defense of the need to continue advancing in the channeling of SDRs and reaffirms today its commitment to the multilateralism"The announcement underscores Spain's support for greater collaboration between the Bretton Woods institutions and their respective members to effectively address climate action."

 

The strengthened framework will accelerate country-led climate action, increasing the effectiveness of SDRs channeled into the RST and financing of World Bank policies and projects

 

It is also expected to help mobilize more financing, including from bilateral donors, multilateral development banks and the private sector.

 

The Managing Director of the IMF, Kristalina Georgieva, welcomed Spain's leadership in channeling SDRs and stressed that "the IMF's RST is a key vehicle for providing support for climate action in emerging and developing economies, and more contributions are needed to meet the strong demand from countries."

 

The generous commitments to contribute to the RST by 23 countries, including emerging countries, are already supporting countries' climate action. Since it became operational in October 2022, 18 countries have already benefited from the RST and more than 30 countries are expected to apply in the near future.

 

These efforts complement the important climate finance packages provided to countries by the WBG, which aims to allocate 45% of its annual finance to climate by 2025. The WBG is also carrying out other measures to support climate action, such as hybrid capital, portfolio, adjustments to its capital-to-loan ratio, and a new financial incentive framework for global challenges, while raising funds for a robust IDA21 replenishment.