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 57 LICs with some $35 billion (SDR 25.8 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.
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..
The targets for loan (SDR 12.6 billion) and subsidy resources (SDR 2.3 billion) under the 2021 PRGT fundraising round have been successfully met in 2023. Reaching this important milestone has been possible thanks to the support from over 40 partners. Nonetheless, stronger demand and sharply higher interest rates imply additional funding needs. A review, which is currently being conducted, will discuss these needs and explore options to restore the long-term sustainability of PRGT finances.
| Contributors | In SDR millions | In USD millions |
| Subsidy Target | 2,300 | 3,073 |
| Total Subsidy Pledges 2/ | 2,300 | 3,073 |
| Australia 3/ | 82 | 110 |
| BOTSWANA* | 1 | 1 |
| BRUNEI DARUSSALAM* | 2 | 3 |
| BULGARIA | 5 | 7 |
| Canada 4/ | 88 | 118 |
| China3/ | 168 | 224 |
| Croatia* | 0.2 | 0.2 |
| Cyprus | 2 | 3 |
| Denmark | 19 | 25 |
| Estonia3/ | 0.4 | 0.5 |
| Finland 3/ | 1 | 1.3 |
| France 5/ | 251 | 335 |
| Germany | 147 | 196 |
| Greece 6/ | 19 | 25 |
| Hungary 3/ | 11 | 15 |
| Indonesia 3/ | 26 | 35 |
| Ireland | 19 | 26 |
| Italy | 82 | 109 |
| Japan 3/ 7/ | 479 | 639 |
| Korea | 42 | 56 |
| Latvia | 2 | 3 |
| Lithuania | 2 | 3 |
| Malta | 1 | 1 |
| Mauritius | 1 | 1 |
| Morocco 3/ | 0.2 | 0.2 |
| Netherlands | 36 | 47 |
| Norway | 9 | 12 |
| Oman 3/ | 18 | 24 |
| Philippines | 4 | 5 |
| Poland | 4 | 5 |
| Portugal3/ | 11 | 15 |
| Qatar8/ | 25 | 33 |
| Singapore* | 21 | 28 |
| Slovak Republic | 6 | 8 |
| Slovenia 3/ | 3 | 4 |
| Spain | 50 | 67 |
| Sri Lanka | 0.8 | 1 |
| Sweden | 22 | 29 |
| Switzerland | 43 | 57 |
| Thailand | 8 | 10 |
| Trinidad and Tobago* 3/ | 3 | 4 |
| United Arab Emirates* 3/ | 39 | 52 |
| United Kingdom 8/ | 250 | 334 |
| United States | 55 | 73 |
| European CoMmission | 78 | 104 |
| Additional pledges* 9/ | 166 | 222 |
| of which, subsidy PLEDGEs effected | 1,949 | 2,603 |
| Loans target | 12,600 | 16,832 |
| Total Loan EFFECTIVE Pledges | 14,650 | 19,571 |
| Australia | 500 | 668 |
| Belgium | 250 | 334 |
| Canada | 500 | 668 |
| China | 1,000 | 1,336 |
| Denmark | 150 | 200 |
| Finland | 300 | 401 |
| France | 2,900 | 3,874 |
| Italy | 1,000 | 1,336 |
| Japan | 2,000 | 2,672 |
| Korea | 450 | 601 |
| Netherlands | 500 | 668 |
| Norway | 150 | 200 |
| Qatar8/ | 150 | 200 |
| Saudi Arabia 10/ | 2,800 | 3,741 |
| Spain | 350 | 468 |
| Sweden | 150 | 200 |
| United Kingdom 8/ | 1,500 | 2,004 |
* Pledges not yet effective.
1/ Based on SDR/US$ exchange rate as of October 15, 2024.
2/ Including grant contributions received and to be received in future installments; effective pledges/agreements include cases of multiple contributions where a portion is not yet effective; all pledges of PRGT subsidies under the July 2021 fundraising round were made in NPV terms as of end-2020.
3/ Includes pledge to be generated over time in the form of net investment earnings from deposit and investment agreements.
4/ Includes about SDR 60 million in grants and SDR 28.5 million estimated by IMF staff to be generated over time in the form of net investment earnings from a deposit agreement.
5/ Includes about SDR 106 million in grants and SDR 145 million estimated by IMF staff to be generated over time in the form of net investment earnings from a deposit agreement.
6/ Greece provided a subsidy grant of SDR 13 million to the PRGT and has effected a deposit of SDR 150 million with the PRGT Deposit and Investment Account, which is expected to generate an additional SDR 6 million in subsidies over time in the form of net investment earnings.
7/ Includes SDR 96 million in grants already disbursed and about SDR 383 million to be generated over time in the form of net investment earnings from a deposit agreement effected with the PRGT Deposit and Investment Account.
8/ The loan resources by Qatar and the United Kingdom have been provided at a concessional rate and are estimated to generate about SDR 25 million and SDR 250 million in implicit subsidies, respectively, subject to SDR interest rate assumptions.
9/ This includes informal indications of intentions to pledge and pledges subject to completion of domestic procedures. Some of the amounts are based on Fund staff estimates.
10/ 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).
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 | Deposits 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 |
IMF Support for Low-Income Countries
Fund Concessional Financial Support for Low-Income Countries—Responding to the Pandemic, July 2021
COVID-19 Financial Assistance and Debt Service Relief, March 2022
2022 Review of Adequacy of PRGT Finances, April 2022
Macroeconomic Developments and Prospects in Low-Income Countries – 2022, December 2022
Opening Remarks by IMF Managing Director Kristalina Georgieva at the High-Level Roundtable Discussion on Low-Income Countries’ Challenges and Concessional Financing, April 2023
2023 Review of Resource Adequacy of the PRGT, RST, and Debt Relief Trusts, April 2023
PRGT—Review of Interest Rate Structure—Postponement, June 2023
The Impact of the IMF’s COVID-19 Support to Developing and Emerging Economies, WP/22/261
How Financing Can Boost Low-Income Countries’ Resilience to Shocks, June 2023
