Mobilizing Innovative Sources of Finance: Lessons from the Resilience and Sustainability Trust

In April 2022, the International Monetary Fund (IMF) established the Resilience and Sustainability Trust (RST), its first lending facility to provide longer-term concessional financing to low- and middle-income countries to help tackle key structural challenges such as climate change and pandemic preparedness. 

The RST is resourced through voluntary re-channeling by Group of 20 (G20) countries as part of their 2021 historic allocation of Special Drawing Rights (SDRs), the Fund’s reserve asset. Costa Rica, Barbados, Rwanda, Bangladesh and Jamaica were the first five countries to access the Resilience and Sustainability Facility (RSF), the instrument under which RST loans are made. RSF programs have been in demand, with the number of RSF programs reaching 18 by the end of March 2024. 

In a new Think20 (T20) policy brief, Jwala Rambarran, Sara Jane Ahmed, Fahmida Khatun and Rishikesh Ram Bhandary present three actionable recommendations to the G20 to help make the RST an important, transformational part of the global financial architecture, particularly as the IMF undertakes a comprehensive review of the lending tool in 2026. 

Policy Recommendations: 

• Remove the qualifying requirement that countries must have a concurrent Fund program to access RST concessional funding. 
• Ensure the RSF can play a much stronger catalytic role in mobilizing private finance support by focusing on a few ambitious, high-depth reforms.
• Deploy RSF resources to help create fiscal space for climate action through debt relief solutions that are timely, fair and effective. 

Overall, the authors find that the RST’s design is limiting its transformational impact. The G20 has the opportunity to encourage design reforms, equip the trust with more resources, and use the RST as leverage to encourage timely and meaningful debt relief solutions. A new round of SDRs would help to address the immediate liquidity challenges while also increasing the capitalization of funds that need urgent scaling up.