IMF to Provide Grants for $100 Million in Debt Relief to Ebola-hit Countries

New Catastrophe Containment and Relief Trust will provide grants

$100 million in grants will be used to relieve debt burden caused by Ebola

IMF meets commitment to G-20, wider international community to provide more resources to Ebola countries

Guinea, Liberia, and Sierra Leone will use the funds to cover the cost of servicing their debt.

These grants come in addition to $130 million in emergency assistance the IMF disbursed in September under an existing loan program, as well as about $160 million in additional loans to the three countries proposed for IMF Executive Board approval later this month. The money for the grants comes from a newly created Catastrophe Containment and Relief Trust (CCR), replacing the trust fund that was established to help Haiti recover from the devastating earthquake in 2010.

The new trust will be a permanent feature and in the future will make available grants to provide debt relief to eligible low-income countries recovering from a catastrophic natural disaster or seeking to contain the potentially catastrophic spread of a life-threatening epidemic within and across international borders.

The debt relief initiative and additional lending to the Ebola-hit countries were outlined by IMF Managing Director Christine Lagarde to the G-20 heads of state in Brisbane, Australia. This is the first time that the Fund has provided grants to support a country in containing an evolving natural disaster with international spillover effects.

Speaking to IMF Survey shortly after the Executive Board’s decision to create the new trust, Sean Nolan, Deputy Director of the IMF’s Strategy, Policy, and Review Department, said the trust would help poor countries deal with a broader scope of natural disasters.

IMF Survey: How does the new Catastrophe Containment and Relief Trust work and what does it mean to those countries that are currently struggling with Ebola?

Nolan: The Fund has been providing significant financial support to the three countries through pre-existing loan arrangements with each country; it then augmented these planned disbursements with an additional $130 million in new loans in September. We expect another disbursement of about $160 million in such loan assistance later this month. This has been the immediate response of the Fund, to get money into the government's account where it can be used immediately for financing salaries of health workers, security forces, and so forth.

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