Liberia Gets $36.5 Million From IMF’s New Trust for Disaster Recovery

IMF Executive Board releases first grant funding from new trust

Board also frees $45.6 million loan payout as urgent financing for Liberia

Ebola having deeper, stronger impact on Liberia than first anticipated

The IMF said the move aimed to enhance Liberia’s international reserves and meet urgent balance of payments and fiscal needs resulting from the Ebola crisis.

The Board also approved a $45.6 million loan to Liberia under the Rapid Credit Facility, a lending arrangement that provides rapid financial support in a single, up-front payout for low-income countries facing urgent financing needs.

The debt relief and the urgent financial support together are expected to improve Liberia’s reserve buildup to meet market demand for foreign exchange, and to act as a catalyst for additional grant financing for the country from other official and private sources.

The package of IMF financing for Liberia draws on $100 million in debt relief funded by IMF grants, announced earlier this month. The debt relief follows $130 million in emergency assistance the IMF disbursed in September 2014 to the African countries worst hit by the Ebola outbreak—Guinea, Liberia, and Sierra Leone.

On February 11 the IMF Board approved release of $25.9 million to Guinea under the West African country’s existing IMF-backed program, and boosted financing under the program by an extra $37.7 million, also to help combat Ebola.

Grants to fight disasters

The new Catastrophe Containment and Relief Trust is a permanent feature in the IMF tool kit. It makes 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 in November 2014 in Brisbane, Australia to heads of state of the G-20 group of advanced and emerging economies. This is the first time that the IMF has provided grants to...