After the acceptance of Costa Rica, Barbados, Rwanda, and Bangladesh in the previous six months, Jamaica is the most recent nation to receive IMF board approval for loans under the Resilience and Sustainability Trust (RST).
Each nation receives a different amount in multimillion-dollar financial packages, ranging from $183 million for Barbados to $1.4 billion for Bangladesh, and recipients have varied plans for how they would use the funds.
The RST fund was established last year with the intention of distributing affordable finance from wealthy to developing nations as well as policy support to address macroeconomic climate risks.
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In order to accelerate climate action and decarbonize financial systems, the IMF thinks it can also catalyze crucial private-sector finance.
Analysts praised the action and suggested it might close a gap in the climate finance framework, calling it “pivotal” in assisting vulnerable nations in addressing the triple problems of debt, COVID, and climate change.
Commenting on Jamaica’s US$764 million agreement, Bo Li, deputy managing director and acting chair of the IMF board, said the funding would create incentives to “switch to renewables, reduce energy consumption, develop green financial instruments, and require proper management of climate risks in the financial sector”.
Story was adapted from Climate Home News
