IMF secures $40 billion so far for new sustainability trust

LONDON/NEW YORK: The International Monetary Fund (IMF) has received $40 billion in pledges for its new Resilience and Sustainability Trust to address challenges such as climate change, IMF head Kristalina Georgieva said on Friday, close to their target set last month.

Building resilience to the effects of climate change will cost trillions of dollars over the next decade, she said in a pre-recorded speech broadcast to the Ibrahim Governance Forum, an Africa-focused conference.

Climate investment globally needs to increase by up to six times from the roughly $640 billion spent in 2020, to keep global temperatures from rising more than 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels, the latest Intergovernmental Panel on Climate Change report said in April.

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“The devastasting effects of climate change are robbing Africa of lives and livelihoods,” Georgieva told the conference, which was scheduled to mark six months until the COP27 climate conference in Cairo.

The IMF launched the new financing facility for low and middle-income countries in April, with the goal of raising at least $45 billion.

Its finance director had said it would need to receive “a substantial fraction” of the total before starting operations of the new trust by the time of the meetings of the IMF and World Bank in October.

Georgieva said at the conference that many African countries were dealing with droughts that were increasing food and political insecurity.

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“Now the surge in food, fuel and fertiliser prices have dramatically raised import costs, all in the context of already high sovereign debt and limited fiscal capacity,” Georgieva said.

“African countries cannot face these overlapping crises - climate, food, pandemic - alone,” she said, adding that IMF lending to African countries in the last year was 13 times the annual average.