Poverty Reduction and Growth Trust: 2024 Borrowing Agreements with Belgium, Denmark, France, Japan, Korea, And Qatar

May2024 POVERTYREDUCTIONANDGROWTHTRUST—2024BORROWINGAGREEMENTSWITHBELGIUM,DENMARK,FRANCE,JAPAN,KOREA,ANDQATAR IMFstaffregularlyproducespapersproposingnewIMFpolicies,exploringoptionsforreform,orreviewingexistingIMFpoliciesandoperations.Thefollowingdocumenthasbeenreleasedandisincludedinthispackage: TheStaffReportwaspreparedbyIMFstaffandcompletedonMay13,2024. ThestaffreportwasissuedtotheExecutiveBoardforinformation.ThereportwaspreparedbyIMFstaff.TheviewsexpressedinthispaperarethoseoftheIMFstaffanddonotnecessarilyrepresenttheviewsoftheIMF'sExecutiveBoard. TheIMF’stransparencypolicyallowsforthedeletionofmarket-sensitiveinformationandprematuredisclosureoftheauthorities’policyintentionsinpublishedstaffreportsandotherdocuments. ElectroniccopiesofIMFPolicyPapersareavailabletothepublicfrom http://www.imf.org/external/pp/ppindex.aspx InternationalMonetaryFundWashington,D.C. ©2024InternationalMonetaryFund May13,2024 POVERTYREDUCTIONANDGROWTHTRUST―2024BORROWINGAGREEMENTSWITHBELGIUM,DENMARK,FRANCE,JAPAN,KOREA,ANDQATAR PreparedbytheFinanceandLegaldepartments.The staffteamwasledbyElenaBudras(FIN)andHoangPham(LEG),withcoordinationbyHelenWagnerandIshitaDugar(FIN),andcontributionsfromMarielAcosta,NelsonSobrinho,VendulaKurcova,LakshmiThulasidas(allFIN);andAudreyMensahYiadom(LEG);productionassistancebyAmyMiranda(FIN). ApprovedBy PapaN’DiayeandBernhardSteinki INTRODUCTION 1.The2021fundraisingcampaignfornewloanresourcesforthePovertyReductionandGrowthTrust(PRGT)hasbeensuccessful.InJuly2021,theFundlaunchedaloanmobilizationroundforthePRGT,aspartofatwo-stagefundingstrategyadoptedinconjunctionwithapackageofPRGTreformstofacilitatetheFund’ssupportoflow-incomecountries.1TotalloanpledgesamountedtoSDR14.65billionfrom17PRGTlenders,wellexceedingtheSDR12.6billionloantarget.WiththesignatureofthelatestborrowingagreementinFebruary2024,allpledgesunderthe2021roundhavebecomeeffective.Tosupporttheadditionalloanresources,theIMFExecutiveBoardapprovedtheincreaseinthePRGTcumulativeborrowinglimitfromSDR55.5billiontoSDR68billioninJuly2021,andfurthertoSDR71billioninJanuary2024. 1SeeFundConcessionalFinancialSupportforLow-IncomeCountries—RespondingtothePandemic.ThefirststageaimedtosecureSDR12.6billioninnewloanresourcesandSDR2.8billioninsubsidyresources,ofwhichSDR2.3billioninsubsidybilateralcontributionsfromPRGTpartnersandSDR0.5billionfromthesuspensionofPRGTreimbursementtotheGeneralResourcesAccountforadministrativeexpensesthroughFY2026.ThesubsidytargetwasmetinOctober2023,inthecontextoftheWorldBank-IMFAnnualMeetings.SeeStatementbytheIMFManagingDirectorKristalinaGeorgieva. CONCESSIONALFINANCING:PRGTBORROWINGAGREEMENTS 2.ThispaperpresentstotheIMFExecutiveBoardforinformationsixborrowingagreementsthathavebeenconcludedsinceOctober2023toprovidenewloanresourcestothePRGTunderthe2021round.2Thepapercoversfournewagreementsandtwoaugmentationsofexistingagreements,assummarizedinTable1.SDRsareusedinfiveoutofthesixagreementsfortheloandisbursements.3 3.ThesesixborrowingagreementsprovidenewPRGTloanresourcesinatotalamountofaboutSDR3.9billionasfollows(alsoseeTable1): AnewborrowingagreementwiththeNationalBankofBelgiumofSDR250million,effectiveOctober25,2023.Inaddition,theexisting2017and2020BorrowingAgreementswereamendedtoparticipateinthePRGT'sencashmentregime; Anamendmenttotheexisting2020PRGTBorrowingAgreementswithDanmarksNationalbanktoaugmenttheamountbyanadditionalSDR150million,effectiveDecember19,2023.Inaddition,theexisting2010and2020BorrowingAgreementswereamendedtoparticipateinthePRGT’sencashmentregime; AnewborrowingagreementwiththeBanquedeFranceofSDR1.9billion,effectiveFebruary13,2024; Anamendmenttotheexisting2010NotePurchaseAgreement(2010NPA)withtheGovernmentofJapantoaugmenttheamountbyanadditionalSDR1billion,effectiveOctober5,2023; AnewborrowingagreementwiththeBankofKoreaofSDR450million,effectiveDecember21,2023; AnewborrowingagreementwiththeMinistryofFinanceoftheStateofQatar,effectiveOctober11,2023,thatwillprovideSDR150millioninloanresourcesataconcessionalrate(thelowerofSDRinterestrateor0.05percentperannum),whichisestimatedtogenerateimplicitsubsidiesofaboutSDR25million,subjecttoSDRinterestrateassumptions. 2Foreaseofreference,thispaperreferstobothloanagreementsandnotepurchaseagreements(NPA)as“borrowingagreements”or“agreements”.PursuanttoSectionIII,paragraph2oftheInstrumenttoestablishthePRGT,theManagingDirectorisauthorizedtoenterintoborrowingagreementsandagreetotheirtermsandconditionswithPRGTlenders. 3The2020PRGTBorrowingagreementwithDanmarksNationalbankprovidesfordrawingstobemadeinEuros.The2010NotePurchaseAgreementwiththeGovernmentofJapanprovidesfordrawingstobemadeinSDRs,butalsoallowsfordrawingstobemadeinU.S.dollars,oranyotherfreelyusablecurrencyasmaybeagreeduponbetweentheTrusteeandJapan. 2INTERNATIONALMONETARYFUND KEYSUBSTANTIVETERMSOFTHEBORROWINGAGREEMENTS 4.Theborrowingagreementspresentedinthispaperhaveuniformkeysubstantiveterms.ThesetermsaresummarizedinAnnexIandincludethepurposeoftheloandrawings,drawdownperiod,denominationofloancommitmentsandallowedmediaofdrawin