Commentary

International Financial Institutions’ Covid-19 Approvals through Q1 2021 Surpass $260 Billion

May 4, 2021

The CSIS Economics Program is tracking commitments and approvals by major international financial institutions (IFIs) to meet the massive financing needs generated by the Covid-19 pandemic and its economic fallout. These IFIs include the International Monetary Fund (IMF), World Bank Group, and major regional development banks. We also include select regional financing arrangements (RFAs), which, together with the IFIs, central bank bilateral swap lines, and individual countries’ foreign reserve holdings, comprise the Global Financial Safety Net (GFSN).

Based on data updated through March 31, 2021:

We estimate IFIs have approved $262.4 billion in Covid-19-related support through Q1 2021. In total, the IMF has approved $108.6 billion, including emergency assistance and precautionary lines of credit, while the multilateral development banks (MDBs) have approved a combined $151.9 billion. MDB approvals are led by the European Investment Bank (EIB) and the World Bank, each of which has approved about $43 billion in Covid-19-related support since the start of the pandemic. We estimate RFAs have approved a combined $1.8 billion, with no additional funding announced in the first quarter of 2021.

The pace of approvals slowed across institutions in January and February of this year, with IFIs approving a collective $9.3 billion, down from $19.6 billion in December 2020. Approvals picked up in March, reaching $14.0 billion. The EIB led IFIs in Q1 2021 Covid-19-related financing with $6.3 billion in new approvals, followed by the IMF with $5.7 billion and the World Bank with $5.0 billion.

Regionally, the Americas remain the largest overall recipient of IFI approvals. To date, IFIs have approved roughly $103 billion in funding for the Americas; around $50 billion for Asia/Oceania, Africa, and Eurasia; and $7 billion for the Middle East. Of the $103 billion in approved support for the Americas, about half, or $54.6 billion, is associated with the IMF’s Flexible Credit Line approvals for Colombia, Chile, and Peru, and Precautionary and Liquidity Line approval for Panama.

Using income classifications from the World Bank, we estimate IFIs and RFAs in our dataset have collectively approved $11.8 billion for low-income countries, accounting for 4.5 percent of total approved pandemic support. Upper-middle-income countries have so far received the most approvals, totaling $94.1 billion. An additional $80.3 billion and $69.3 billion have been approved for lower-middle-income and high-income countries, respectively.

We estimate that IFIs have approved $48.5 billion for countries eligible for the Debt Service Suspension Initiative (DSSI), or 18.5 percent of total approved funding. IFIs have approved $27.1 billion for DSSI-recipient countries. This funding supplements the approximately $5 billion in debt-servicing relief granted under the DSSI to more than 40 countries since May 2020.

IFI commitments to fund the purchase and distribution of Covid-19 vaccines total at least $24 billion, and vaccine-related approvals reached $4.2 billion for 23 countries through Q1 2021. On March 2, the Development Bank of Latin America (CAF) committed $1 billion in additional funding to strengthen access to Covid-19 treatment and vaccines in Latin America, and on February 8, the Central American Bank for Economic Integration (CABEI) approved an increase of up to $400 million for the acquisition and application of vaccines to eight regional countries.

April saw additional efforts to channel resources to countries hit hard by the pandemic and its economic fallout. The IMF on April 1 approved a third tranche of grants for debt service relief for 28 member countries under the Catastrophe Containment and Relief Trust (CCRT). The approval enables the disbursement of grants from the CRRT for eligible debt service falling due to the IMF from its poorest members from April 14, 2021, to October 15, 2021, estimated at $238 million. Separately, G20 finance ministers and central bank governors announced a final extension by six months of the DSSI through December 2021. They also underscored their commitment to “strengthening health systems and facilitating equitable and swift access to safe, effective and affordable COVID-19 vaccines” and encouraged efforts to increase their production and distribution. However, support for World Health Organization (WHO) facilities remains well below fundraising targets, and as of April 21, the WHO’s Access to Covid-19 Tools Accelerator faced a $19 billion funding gap. Looking ahead, IMF managing director Kristalina Georgieva plans to present a formal proposal to the IMF’s Executive Board to consider a new special drawing rights allocation of $650 billion by June 2021 that would “add a substantial, direct liquidity boost to countries, without adding to debt burdens.”

This analysis is based on IFI press releases along with additional information as provided by the institutions; any corrections and/or clarifications will be included in future updates. Our dataset of IFI responses is available for download here. Our previous analyses of IFI responses are available here.

MDBs include the African Development Bank (AfDB), Asian Development Bank (AsDB), Asian Infrastructure Investment Bank (AIIB), Central American Bank for Economic Integration (CABEI), Development Bank of Latin America (CAF), European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Inter-American Development Bank Group (IADB), Islamic Development Bank (IsDB), New Development Bank (NDB), and the World Bank Group (WB). RFAs include the Arab Monetary Fund (AMF), Chiang Mai Initiative Multilateralization (CMIM), Eurasian Fund for Stabilization and Development (EFSD), European Stability Mechanism (ESM), and Latin American Reserve Fund (FLAR). Country income group classifications reflect World Bank categories.

Stephanie Segal is a senior fellow with the Economics Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Dylan Gerstel is a research associate with the CSIS Economics Program. Reid Fennerty is a research intern with the CSIS Economics Program. Isaac Robinson, CSIS Economics Research intern, assisted with data collection.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

Written By