Update on the Financing of the Fund's Concessional Assistance and Debt Relief to Low-Income Member Countries
Author: International Monetary Fund
Publication Date:
10 Apr 2012
eISBN:
9781498339810
ISBN:
9781498339810
Language:
English
Keywords:
PP; SDR; PRGT; loan; financing; coverage ratio; debt relief of SDR; PRGT obligation; reviews PRGT operations; PRGT General Subsidy Account; PRGT subsidy pledge; PRGT lending
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New commitments under PRGT-supported programs are expected to increase to about SDR 2 billion in 2012, in part reflecting the large ECF commitment (SDR 0.6 billion) for Bangladesh approved in April. Commitments in the first eight months of 2012 amounted to SDR 1.4 billion and a further SDR 0.6 billion is expected to be committed by year end. This compares to total commitments of SDR 1.2 billion in each of 2010 and 2011. If all elements of the 2009 financing package are secured, the PRGT will have an annual average lending capacity of SDR 2.2 billion remaining under this package for the period 2013–14. Additional

Abstract

New commitments under PRGT-supported programs are expected to increase to about SDR 2 billion in 2012, in part reflecting the large ECF commitment (SDR 0.6 billion) for Bangladesh approved in April. Commitments in the first eight months of 2012 amounted to SDR 1.4 billion and a further SDR 0.6 billion is expected to be committed by year end. This compares to total commitments of SDR 1.2 billion in each of 2010 and 2011. If all elements of the 2009 financing package are secured, the PRGT will have an annual average lending capacity of SDR 2.2 billion remaining under this package for the period 2013–14. Additional

I.Introduction1

1. This paper reviews the status of financing for the Fund’s concessional lending and debt relief for low-income countries (LICs).2 It is based on the latest available data and projections, and takes into account the pledges made thus far in response to the Managing Director’s fund-raising requests of August 2009 and February 2012.

2. The paper is organized as follows. Section II describes progress in the implementation of the July 2009 reform of the Fund’s concessional lending instruments and the associated financing framework. Section III reviews PRGT operations and discusses developments in the PRGT Reserve Account. Section IV provides updates on the subsidization of emergency assistance, while Section V presents the developments on the financing of debt relief under the HIPC, MDRI, and the Post-Catastrophe Debt Relief (PCDR) Trust.

II. LIC Facilities and Financing Framework

3. Since the effectiveness of the LIC reforms in January 2010, lending commitments to LICs have been approved under all three PRGT facilities—the Extended Credit Facility (ECF), the Standby Credit Facility (SCF), and the Rapid Credit Facility (RCF). Loan and subsidy resources have been made available for all the loan and subsidy accounts of the PRGT (Figure 1). Total commitments under the ECF, including augmentations under existing arrangements, amounted to SDR 3.26 billion during January 2010 -August 2012, while commitments under the SCF and RCF amounted to SDR 0.36 billion and SDR 0.20 billion, respectively. In view of the closure of the Exogenous Shocks Facility (ESF) Subsidy Account in May 2010 after resources in that account were depleted, resources in the ECF Subsidy Account are available to meet the subsidy requirements of outstanding ESF loans.3

Figure 1.
Figure 1.

Concessional Financing Framework

Citation: Policy Papers 2012, 022; 10.5089/9781498339810.007.A001

1/ Transfers may be made from the General Subsidy Account for subsidizing ENDA/EPCA credit on an “as needed” basis.

4. A review of the LIC facilities is ongoing, and the first discussion of the Executive Board took place on September 6, 2012.4 At that discussion, Executive Directors considered the 2009 reforms of LIC facilities as broadly successful but saw merit in exploring refinements to increase the flexibility of existing instruments and greater differentiation of financing terms, particularly through greater use of blending. A second stage of the review is envisaged, with specific proposals drawing on the earlier discussion, and ensuring that any modifications to the facilities would be cost neutral.

5. In its discussion on September 28, 2012 the Executive Board approved a distribution of the Fund’s general reserves attributed to the remaining gold sales profits as part of a strategy to make the PRGT sustainable in the longer term.5 This strategy is expected to be robust under a wide range of demand scenarios—for the short, medium, and long term—and rests on three pillars: (i) a base envelope of about SDR 1¼ billion in annual average lending capacity financed from investment returns on PRGT resources; (ii) contingent measures—including bilateral fundraising efforts, suspension of reimbursement of the GRA for PRGT administrative expenses, and modifications of access, blending, interest rate, and eligibility policies to reduce the need for subsidy resources—that can be activated when average financing needs exceed the base envelope by a substantial margin for an extended period; and (iii) the expectation that future modifications to LIC facilities would be designed in a manner that is consistent with maintaining self-sustainability. In this context, the Board approved the distribution to the membership of SDR 1.75 billion from the general reserve attributable to the remaining gold sales windfall profits. This distribution will be effected only after members have provided satisfactory assurances that new amounts equivalent to at least 90 percent of the amount to be distributed will be transferred or otherwise provided to the PRGT. Members will be approached in the near future to provide such assurances.

III. Financing of PRGT Operations

A. Sources of Financing

6. The LIC financing package, approved in July 2009 as part of the LIC reforms, remains critical for PRGT lending.6 The financing package, which aimed to increase the Fund’s concessional lending capacity to SDR 11.3 billion for the period 2009-14, requires the mobilization of new loan resources of SDR 10.8 billion (including a liquidity buffer of SDR 1.8 billion to enable a voluntary encashment regime) and new subsidy resources of SDR 1.5 billion (end-2008 NPV terms). Most of the additional subsidies were to be financed from the Fund’s internal resources—including transfers from the PRGT Reserve Account, delaying until FY 2013 the resumption of reimbursement of the GRA for PRGT administrative costs, and use of resources linked to gold sales as a means to facilitate new subsidy resources. Bilateral subsidy contributions of SDR 200-400 million (end-2008 NPV terms) were also important to complete the financing package. The Managing Director approached a wide spectrum of the membership in 2009 to mobilize the required loan and subsidy resources, and staff continues to follow up on these requests.

7. If the ongoing resource mobilization exercises are completed successfully, the PRGT would have sufficient capacity to accommodate annual lending of about SDR 1¼ billion. Upon the effectiveness of the September 2012 Executive Board decision, the PRGT subsidy accounts are expected to be enlarged by at least SDR 1.575 billion (90 percent of the distribution). Using these resources and providing the 2009 LIC financing package is completed, the PRGT could then support lending of about SDR 2.2 billion annually during 2013-14 and about SDR 1.1 billion thereafter (Table 1, middle panel).7 However, based on current staff projections, demand is expected to be significantly lower than this maximum capacity in the next two years. If the principle of self-sustainability was applied starting now, incorporating the remaining capacity under the 2009 LIC financing package as well as resources linked to the remaining windfall gold sales profits, the self-sustaining capacity would increase to about SDR 1¼ billion, which could be considered as the base envelope for the self-sustained PRGT (Table 1, lower panel).

Table 1.

Scenarios of Medium Term Concessional Lending to LICs

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Source: Finance Department.

Excluding the relatively high level of lending committed to Pakistan in the aftermath of 9/11, and to Liberia in 2008 following arrears clearance.

May not add up due to rounding.

Assuming actual average exchange rate for 2000-11, and US$1.5 per SDR for projections.

Sustainable lending capacity after 2014 assuming SDR 1.6 billion contributions from the remaining gold sale windfall profits.

Sustainable lending capacity after 2013 including unused resources from the 2009 package and contributions form the remaining gold sale windfall profits.

B. Projected Demand for Concessional Lending

8. Commitments under new PRGT arrangements are expected to reach SDR 2 billion in 2012, significantly above the SDR 1.2 billion committed annually in 2010 and 2011.8 Total commitments under the ECF during January-August 2012, including augmentations under existing arrangements, amounted to SDR 1.1 billion, while commitments under the SCF and RCF amounted to SDR 0.3 billion and SDR 0.1 billion, respectively. Commitments comprised of eight ECF arrangements and three augmentations of access under the ECF, two SCF arrangements, and two RCF disbursements. The ECF arrangement for Bangladesh that was approved in April 2012 constitutes a substantial share of these commitments (Table 2 and Figure 2). Based on preliminary information provided by the area departments additional PRGT commitments of about SDR 0.6 billion are expected by end-2012.

Table 2.

New PRGT Commitments to LICs in 2012

(In millions of SDRs, as of end-August 2012)

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Figure 2.
Figure 2.

PRGT Commitments to LICs, 1988-2012

(actual as of end-August 2012)

Citation: Policy Papers 2012, 022; 10.5089/9781498339810.007.A001

9. Updated staff projections indicate that longer term demand for the Fund’s concessional lending could be about SDR 1.2-1.9 billion annually up to 2034.9 However, financing commitments can vary substantially from year to year. In the first decade, demand is projected to be in the range of SDR 1.0-1.7 billion annually. The recently approved framework for concessional lending on a self-sustained basis includes contingent measures that can be put in place when average financing needs exceed the base envelope by a substantial margin for an extended period.

C. Loan Resources

10. Further progress is required to secure the loan resources targeted under the 2009 LIC financing package. No new loan pledges or contributions have been made since the last update. Fourteen members have so far pledged SDR 9.8 billion in loan resources for the PRGT compared with the target of SDR 10.8 billion, and borrowing agreements amounting to SDR 9.5 billion have been signed with thirteen lenders (Table 3). Two-thirds of the secured resources (SDR 6.2 billion) have been made available to the General Loan Account (GLA), about 31 percent to the ECF Loan Account (SDR 2.9 billion), and the remainder (SDR 0.3 billion) to the SCF and RCF Loan Accounts.

Table 3.

New Commitments of Loan Resources to the PRGT 1/

(In millions of SDRs; as of October 4, 2012)

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Germany (KfW) made a pledge of SDR 1.53 billion. As mutually acceptable lending terms could not be agreed, it is excluded from the total.

11. Lenders to the PRGT have made use of all of the elements under the new framework for mobilizing bilateral loan resources agreed in 2010.10 Loan resources have been provided through both traditional Loan Agreements and Note Purchase Agreements (NPAs), and seven members have included in their borrowing agreements participation in the encashment regime of the PRGT.11 Five of the borrowing agreements also have shorter initial maturities than in the case of traditional loan agreements.12 Eight of the new borrowing agreements, and almost 90 percent of loan resources committed so far, provide loans to the PRGT in SDRs; all these contributors also have in place voluntary SDR trading arrangements.13 Since June 2011, when the sales of SDRs under these arrangements commenced, drawings amounting to SDR 985 million have been made under the new SDR borrowing agreements, and sales of SDRs related to these drawings amounted to SDR 865 million.14 These sales were conducted through the voluntary SDR trading arrangements.

12. Uncommitted PRGT loan resources amounted to SDR 6.5 billion at end-June 2012. The bulk of these resources were in the GLA, amounting to SDR 6.2 billion, and resources available in the Special Loan Accounts (SLA) for the ECF and SCF amounted to SDR 0.36 billion and SDR 0.01 billion, respectively. However, the SLA for the RCF was fully depleted in April 2012.15

13. Additional pledges of about SDR 1 billion are still needed to complete the loan package (Table 4). The 2009 LIC financing package targeted new loan contributions of SDR 10.8 billion to support the projected concessional lending through 2014-15, and including a liquidity buffer of SDR 1.8 billion to enable the voluntary encashment regime. It is important that existing pledges of loan resources be finalized and new pledges made to close the SDR 1 billion funding gap. A new lending package will be needed after 2014 to facilitate concessional lending under self-sustainable operations.

Table 4.

PRGT Loan Resources Mobilization

(In billions of SDRs; as of end-August 2012)

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Secured through Loan Agreements with Canada, Denmark, France, Italy, Korea, the Netherlands, Norway, Saudi Arabia, Spain, and Switzerland and through Note Purchase Agreements with China, Japan, and the United Kingdom.

D. Subsidy Resources

14. Available subsidy resources at end-June 2012 amounted to SDR 1.4 billion, excluding resources received or committed in the context of the current fund-raising effort.16 This amount includes all contributions pledged during the 2005 ESF fund-raising exercise, including those that are still expected to be received (Table 5). However, it excludes SDR 25.9 million pledged during earlier fund-raising that donors have not yet provided (Table 6). Given that about SDR 1.1 billion is estimated to be needed to subsidize existing PRGT commitments, about SDR 0.3 billion of these resources are currently available to subsidize new lending.

Table 5.

ESF Subsidy Contributions

(In millions of currency units; end-June 2012)

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To be generated from the concessional loan as an implicit subsidy.

Reflecting net investment income (in end-2005 NPV terms) to be generated from deposit/investment agreements.

Table 6.

PRG-HIPC Trust - Pending Contributions

(In millions of SDRs “as needed”; end-August 2012)

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Remaining balances.

15. Further progress has been made in securing bilateral subsidy resources under the 2009 LIC financing package for the PRGT. Since the last update paper, one additional member (Saudi Arabia) pledged SDR 16.7 million (estimated at SDR 11 million in end-2008 NPV terms) to be paid at the end of 2021. As at October 4, 2012, a total of twenty-six members have committed SDR 213.9 million in additional subsidies (Table 7). This is broadly in line with the lower end of the target range of SDR 0.2-0.4 billion (end-2008 NPV terms) envisaged under the 2009 financing reform package for such contributions. Contributors include traditional as well as non-traditional donors, several of whom are emerging market countries. The staff continues to explore possible bilateral contributions with other donors since these contributions remain important as part of the multilateral effort to strengthen the Fund’s concessional lending capacity.

Table 7.

New Subsidy Commitments to the PRGT

(In millions of currency units; as of October 4, 2012)

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Reflecting net investment income (in end-2008 NPV terms) to be generated from investment agreements.

Initial pledge of SDR 9.5 million has been changed to SDR 10.33 million to be paid in 8 tranches by January 2018.

A pledge of SDR 16,709,643 is to be received following expiry of existing investment agreement with the PRGT on 12/31/2021; estimated as SDR 11 million in end 2008 NPV terms at the time when the pledge was made.

Calculated using the exchange rates as of October 4, 2012.

16. Since the last update good progress has been made in securing members’ assurances for new subsidy resources related to the partial distribution of SDR 0.7 billion of the general reserves attributed to the gold sales profits. To make effective an important element of the subsidy resources in the 2009 financing package, in February 2012, the Executive Board approved a partial distribution of the general reserve equivalent to SDR 700 million attributed to part of the gold sales windfall profits.17 The distribution will be effected after members have provided satisfactory assurances that new amounts equivalent to at least 90 percent of the amount distributed, i.e., SDR 630 million, will be transferred or otherwise provided to the PRGT. Further progress has been made in securing these assurances—as of October 4, 131 members representing 87.82 percent (SDR 614.72 million) of the proposed distribution have confirmed they intend to direct the transfer of their shares of the distribution, or to contribute equivalent amounts, as PRGT subsidies (Table 8). It is important that additional assurances are secured promptly.

Table 8.

PRGT Subsidy Pledges Based on the Partial Distribution1

(As of October 4, 2012)2

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Pledges based on the partial distribution of SDR 0.7 billion of the general reserve attributed to part of the windfall profits from the recent gold sales. Pledges may be subject to domestic processes to enable members to make PRGT subsidy contributions.

Responses were initially requested by April 30, 2012 with later extension to September 30, 2012.

Partial contribution.

E. PRGT Reserve Account

17. The PRGT Reserve Account will continue to provide adequate security to PRGT lenders and note purchasers. The Account has been financed by reflows of Trust Fund and Structural Adjustment Facility repayments, as well as investment returns on balances held in the Account. The PRGT can tap these resources temporarily to meet its obligations in the event of a delayed payment by a borrower to any loan account of the Trust. The balance in the Reserve Account amounted to SDR 3.9 billion at end-June 2012, representing a substantial multiple of the projected PRGT repayments falling due over the next twelve months and about 74 percent of total PRGT obligations (Appendix Table 4).18 It is expected that the Reserve Account will continue to provide a loan coverage ratio of about 40 percent in the medium term, in line with the historical average.

Appendix Table 4.

PRGT Reserve Account Coverage

(In millions of SDRs; end-period)

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The decline in total PRGT credit outstanding by about 40 percent from 2005 reflects early repayments arising from the delivery of HIPC and MDRI debt relief.

18. It has long been envisaged that the resources in the Reserve Account could generate income to support subsidization of PRGT in the longer term on a “self-sustained” basis. As mentioned earlier, staff projections indicate that the additional resources transferred or otherwise contributed by members in light of the approved distribution of reserves attributable to the remaining gold sale windfall profits would increase overall financing capacity of the PRGT to SDR 1.1 billion starting from 2015 or to SDR 1¼ billion starting from 2013.19 These projections incorporate revised estimates of the annual cost of reimbursement of the GRA by the PRGT, now assumed at SDR 65 million. The projections are subject to significant uncertainties, including: the rate of return on investment of the Reserve Account and Subsidy Accounts balances; the interest rate paid to lenders to the Trust; and the timing of repayment of overdue Trust Fund, SAF, and PRGT obligations by the protracted arrears cases.

IV. Subsidization of Emergency Assistance

19. The EPCA/ENDA Administered Subsidy Account is being maintained on an interim basis for the subsidization of EPCA/ENDA credits outstanding on January 7, 2010. Once these outstanding credits are fully repaid (expected by April 2013), the EPCA/ENDA Administered Subsidy Account will be terminated. Contributors will be encouraged at that time to transfer any balances in the account to the PRGT General Subsidy Account (GSA), or one of the special subsidy accounts of the PRGT (Appendix Table 5).

Appendix Table 5.

Subsidy Contributions for Emergency Assistance

(In millions; as of end-August 2012)

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The SDR equivalent is the actual SDR amount received using the exchange rate on the value date; all contributions have been fully received.

Reflecting investment income to be generated on a deposit agreement, effective May 2006.

To subsidize the rate of charge on purchases by Sri Lanka and Maldives under ENDA following the 2004 Tsunami.

Existing contribution, previously earmarked for ENDA.

Existing contribution, previously earmarked for EPCA.

20. Available resources in the EPCA/ENDA Administered Subsidy Account are estimated to be sufficient to subsidize the remaining EPCA/ENDA credits. At end-July 2012, two PRGT-eligible members had outstanding ENDA credits (Bangladesh and Dominica) amounting to SDR 50.8 million. There were no PRGT-eligible members with outstanding EPCA credits. Since the last update, Saudi Arabia has made its final disbursement of US$2 million (equivalent to SDR 1.3 million) towards its pledge to contribute US$4 million in subsidy resources for ENDA. At end-July 2012, available subsidy resources amounted to SDR 11 million. It is estimated that these resources are likely to be sufficient to subsidize the outstanding credits, including for the additional interest relief through January 2013. In the event that subsidy resources in the EPCA/ENDA subsidy account were depleted, the PRGT Instrument would allow for the subsidization of outstanding credits from the PRGT GSA.

V. Financing of Debt Relief

21. At end-September 2012, the Fund had provided a total of SDR 5.2 billion of debt relief to eligible countries. This includes HIPC debt relief of SDR 2.6 billion to 36 countries, MDRI debt relief of SDR 2.3 billion to 30 countries, “beyond-HIPC” debt relief to Liberia, and PCDR debt relief to Haiti (Appendix Tables 6 and 7). Côte d’Ivoire and Guinea reached completion point under the HIPC Initiative in June and September 2012, respectively, bringing the total number of completion point countries to 34. There remain two decision point countries (Chad and Comoros), one of which (Chad) at end-September 2012 had received HIPC interim assistance of about SDR 9 million from the Fund. No debt relief has been provided through the PCDR Trust since the last update, and the balance in the PCDR Trust was SDR 0.1 billion at end-September 2012.

Appendix Table 6.

Implementation of the HIPC Initiative

(In millions of SDRs; end-September 2012)

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Includes the commitment made in NPV terms plus interest earned on that commitment.

At the time of its decision point, Afghanistan did not have any outstanding eligible debt.

Includes commitment under the original HIPC Initiative.

Côte d’Ivoire reached its decision point under the original HIPC Initiative in 1998, but did not reach its completion point under the original HIPC Initiative. Debt relief of SDR 17 million, committed to Côte d’Ivoire under the original HIPC Initiative, was therefore not delivered.

Appendix Table 7.

Debt Relief Following Implementation of the MDRI

(In millions of SDRs; end-September 2012)

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Amount outstanding at the completion point (net of repayments between January 1, 2005 to the completion point date).

Balances available at the time of MDRI debt relief.

Afghanistan, Haiti, and Togo did not have MDRI-eligible credit and did not receive MDRI debt relief. Côte d’Ivoire and Guinea had fully repaid MDRI-eligible debt by completion point date.

Non-HIPCs but qualified for MDRI debt relief with a per capita income below the US$380 threshold.

Liberia received “MDRI-like” (beyond-HIPC) debt relief at end-June 2010, which was financed from the Liberia Administered Account. Its eligible credit outstanding corresponds to the amount of arrears clearance to the IMF in March 2008.

Including Liberia’s beyond HIPC debt-relief.

A. Remaining HIPCs

22. The Fund’s cost of debt relief for the remaining HIPCs (excluding the protracted arrears cases) is estimated at SDR 0.01 billion (end-September 2012 NPV terms, Table 9).20 This estimate excludes the arrears cases and is based on assumptions regarding the timing of HIPC completion point and the future path of interest rates, all of which are subject to uncertainty. Moreover, the estimate does not take into account potential needs for topping-up assistance.

Table 9.

Financing of Debt Relief to the Remaining HIPCs

(In billions of SDRs; end-September 2012 NPV terms)

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Since the HIPC sub-account is depleted, resources of SDR 0.01 billion are expected to be drawn from the PRG-HIPC sub-account to meet the estimated cost of the remaining HIPCs.

23. Available resources in the PRG-HIPC and MDRI Trusts are estimated to be sufficient to cover debt relief for the remaining eligible countries (excluding the protracted arrears cases). Since the HIPC sub-account of the PRG-HIPC Trust is depleted, resources of about SDR 0.01 billion from the PRG-HIPC sub-account are expected to be used to cover the projected HIPC needs. The two MDRI Trusts are expected to have surpluses totaling about SDR 0.05 billion (Table 9).

B. Pending Contributions to Liberia’s Debt Relief

24. Following Liberia’s HIPC completion point, there remain a number of countries that have yet to finalize their pledged contributions to the Fund’s debt relief for Liberia. Since the last update, no further contributions have been received from the remaining countries who had pledged contributions. Pledged contributions totaling SDR 17.7 million (March 2008 NPV terms) from eight members are yet to be received (Table 10). It remains important that these contributions be disbursed as soon as possible to replenish the PRG-HIPC Trust.

Table 10.

Pending Disbursements to Finance Debt Relief to Liberia as of end-August 2012

(In millions of SDRs; in March 14, 2008 NPV terms)

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25. The SCA-1/Deferred Charges Administered Account holds a balance from one member (Brazil). The Executive Board approved a decision to delay the termination date of the account to March 13, 2014, to allow completion of the procedures that would allow the disbursement of the pledged contribution for financing Liberia’s debt relief.21 It is expected that this amount would by that time be transferred to the PRG-HIPC Trust, which financed the shortfall in members’ contributions relative to their commitments for the financing of Liberia’s debt relief.

C. Protracted Arrears Cases

26. Providing debt relief to Somalia and Sudan would require substantial additional resources. At end-August 2012, the total amount of overdue financial obligations of these two countries to the IMF amounted to SDR 1.2 billion.22 As the cost to the Fund for providing debt relief to these countries was not included in the original costing estimates for the HIPC Initiative,23 additional financing would need to be secured when these members are ready to clear their arrears and embark on the HIPC Initiative and possible “beyond-HIPC” debt relief.24 The approach developed for Liberia’s debt relief, including the financing modalities, could provide a useful framework for Somalia and Sudan at the appropriate time.

27. Additional resources could potentially be required to provide debt relief to Zimbabwe, if it is assessed to be eligible. Zimbabwe is currently neither PRGT-eligible, nor is it included in the list of “ring-fenced” countries that could benefit from the HIPC Initiative. However, if Zimbabwe’s PRGT-eligibility is restored following clearance of its arrears to the PRGT (SDR 84.3 million at end-August 2012), an assessment of Zimbabwe’s eligibility for the HIPC Initiative would need to be made based on the relevant criteria, including whether the NPV of its external debt at end-2004 and end-2010 exceeded the HIPC thresholds. Additional resources may be needed to cover any such HIPC and “beyond-HIPC” debt relief for Zimbabwe.

Appendix Table 1.

Summary of Bilateral Commitments to the PRGF-ESF and PRG-HIPC Trusts

(In millions of SDRs; as of June 30, 2012)

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Less than SDR 5,000.

These are contributions originally pledged for the PRGF-ESF Trust which are now available for the PRGT. Excludes the G-8 commitment of SDR 100 million in end-2005 NPV terms, new ESF subsidy contributions, and any subsidy contribution made in the context of the LIC reform of 2009.

Estimated values of total contributions include forthcoming contributions that are not yet received. The term “as needed” refers to the nominal sum of concessional assistance taking into account the profile of subsidy needs associated with PRGF lending and the provision of HIPC assistance, respectively.

Including new borrowing agreement in support of 2009 reform of LIC facilities.

Including a borrowing agreement in support of the establishment of the ESF.

Appendix Table 2.

PRGT—Borrowing Agreements

(In millions of SDRs; as of end-August, 2012)

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Including additional loan commitments for interim PRGF operations.

Committed to the General Loan Account of the PRGT.

Committed to the ECF Loan Account of the PRGT.

Before April 17, 1998, known as Caisse Française de Développement.

The loan commitment, which became effective on August 20, 2009, was made in the context of establishment of the ESF.

In late 1999, the Bank of Italy replaced the Ufficio Italiano dei Cambi as lender to the PRGF Trust.

On October 1, 1999, the Export-Import Bank of Japan merged with the Overseas Economic Cooperation Fund and became the Japan Bank for International Cooperation.

Committed to the SCF Loan Account and RCF Loan Account of the PRGT in equal proportion.

The loan commitment is for the SDR equivalent of US$50 million.

The original loan commitment of the Bank of Spain was SDR 220 million; however, only SDR 216.4 million was drawn and disbursed by the expiration date for drawings.

The full loan commitment of SDR 200 million was drawn in January 1989; this amount was fully disbursed to borrowers by March 1994.

On August 26, 1998, the SFD indicated that it did not intend to make further loans in association with the PRGF.

Any mismatch of outstanding resources between the amount owed by PRGF borrowers and the amount owed to PRGF lenders arises because of mismatches in timing between drawdowns from lenders to the Trust and disbursements of PRGF loans to borrowers.